POI Pulse August 6, 2018

Dale Hagemeyer, POI, and Pam Brown, Chief Commercial Officer, POI

The Promotion Optimization Institute (POI) continues to focus on improving the trade promotion process in all of its aspects. It continues to be an industry challenge, and from 2017 our annual POI Survey data showed an uptick in the satisfaction in the ability to manage trade promotions. This is significant after it had continuously declined during the previous two years. We attribute this to a continued focus and taking a pragmatic approach to the enabling the processes that includes not only the underlying technology but also securing support services and best practices where appropriate. Trade Promotion (or TPx so that it is inclusive of trade promotion management, trade promotion optimization, trade promotion effectiveness, trade promotion analytics, and acronyms yet to be created) is still highly relevant because brick and mortar experiences are still highly relevant. No doubt they are seeing pressure from eCommerce formats such as Amazon, but they will remain highly relevant into the future.

Therefore, this document is designed to highlight the technology and related service options that can help to improve promotional outcomes. In short, it is a guide to help consumer goods (CG) manufacturers as they seek to acquire, upgrade, or geographically expand their TPx capabilities.

Market requirements have accelerated over the last 5 years, as revenue management, eCommerce, AI, machine learning, plus data access and quality are driving the business case for improved capabilities with teams, and trading partners. Additionally, we note some signs of imminent change, including the following market trends:

–       More solution options exist than ever before. In this report, we have evaluated a total of 23 vendor solutions. We continue to see more “localized” solutions that focus on specific geographies such as Europe or North America. We have not seen any consolidation among vendors in the last year, which is largely a good thing for users of these solutions because of the tendency to force adoption due to unsetting of technologies or merging of platforms.

–       Deeper analytics, better user experience, and capabilities for optimizing promotions through predictive models are key differentiators that are highly sought after. We consistently see this in case studies of success. Many of the vendors have moved to Microsoft BI which has enabled better graphics, dashboards and reporting. We are also seeing increased capabilities from many of the vendors to manage customer level P&L’s.

–       Post event analysis is often overlooked or an afterthought when considering the entire trade promotion cycle. However, we have seen this addressed more and more recently as either something requiring a specialty tool or as having higher weight in the selection process. Because most CG companies are only able to evaluate the top 2-3 promotions at their key 5 retailers, you have an opportunity to engage them in the insights area by going deeper into your promotions. Multiple vendors have emerged this year that incorporate post event analytics (ROI/PEA) right into the planning process – whether in the optimization process or TPM planning process. Incorporation of post event analysis when sales teams are planning will drive efficiency in promotion effectiveness and returns.

The complete compendium will be available in 2 weeks.