Multiple automated capabilities are available to improve efficiency and effectiveness of trade: Trade Promotion Management (TPM=transactional), Trade Optimization (TPO=forward looking what-if scenarios), and post event analytics (TPE/ROI). Together these capabilities deliver total TPx functionality. Only recently have vendors been deploying these capabilities in one seamless holistic planning platform. POI survey respondents noted that 38% (+1) of their organizations will be deploying new TPM systems. Note that 70% of companies already have TPM systems and survey data doesn’t denote if these are Excel based teams moving to TPM for the first time or if this is a TPM to TPM redeployment. ROI capabilities are expected to grow 22%. The largest change year over year is 44% (+14) of companies will be implementing a seamless holistic planning tool that incorporates TPM, ROI, and TPO. In addition, 40% (-4) of respondents note they are looking to deploy standalone TPO capabilities. As you can see from the chart, TPx benefits to the organization are transformative. Eliminating poor performance (56%), process improvements (52%), and greater visibility to the business & opportunities/risks (50%) are top benefits realized. Improvement to the forecast is important (30%) as there is a high cost to over/understating the numbers, and most CPG companies are struggling in this area. 28% of respondents noted improved relationships with retail partners for insights generated. Again, usage of optimization tools by HQ has been lagging, yet 22% of respondents have realized improved go-to-market strategies. This is low hanging fruit for organizations to improve plans year over year. All other respondents noted a 5-10% improvement on promotion ROI. It is interesting that only 30% of respondents reflected a return of trade benefit. Some thoughts on this response: most companies are not “returning” the trade to the bottom line. In POI conversations with the manufacturers, the trade is optimized and then re-invested back into the business. While it is best practice to set project KPI’s to manage delivery value of a project to an organization, many companies struggle with setting, tracking, and managing actual % improvements. Respondents may know they have delivered a return, but don’t know the actual %. Trend- Funding is Expanding:When POI survey respondents were asked the % change of the three noted fund types, one can see traditional trade levels are not dropping substantially at most companies. Yet, with the enhanced focus on shopper marketing and digital, organizations are actualizing a total increase in funding support. This funding increase calls for efficiency evaluation, so companies improve total effectiveness and ensure every dollar spent is maximized and used against the tactics that will generate the best results for the total organization. As more organizations become profit, efficiency, and digitally focused with the consumer at the center of all decisions, the desire to optimize pricing, promotions, tactics, etc. leads organizations down the path of implementing capabilities, process, and enabling TPO – Trade Promotion Optimization. TPx Enablement Success Factors: Support manufacturer business case development, (LY 66.7 challenges justifying and building a business case for TPx) which will expedite decision making and deployment timelines. In addition, 24.1% of POI survey respondents note that they have not moved to a server-based TPM solution (they use Excel to manage promotions) due to a lack of standardized process, 20.7% due to cost, 17.2% due to integration issues, and 17.2% because the project hasn’t been internally prioritized. In addition, 67% (+3) of respondents noted that when they implemented their TPx solution, their vendor and/or services team provided best practices. Change management is critical to transformation and implementing new process and platforms. (See best practice section #6). Can you imagine the administrative burden eliminated? Can you visualize your teams transforming from tactical to strategic? If your company is looking to advance TPx capabilities please refer to the 2019 TPx Vendor Panorama to dive deeper on the topic and understand vendor capabilities. Per the current capabilities graph on page 19 (of the full report, 27% of surveyed organizations utilize TPO capabilities. The “work” of optimization and advanced analytics in most companies is completed by the RGM team (+25) and/or a centralized HQ team (+16). Only 3% of optimization work is completed by sales teams. Again, 25% of respondent companies haven’t put an RGM practice in place. Based on the latest POI State of the Industry Survey, 63% of respondents state that their HQ support teams do not have the necessary capabilities to optimize pricing, trade allocations, and go-to-market strategies. Historically, TPx HQ Capabilities have taken the back seat to sales planning capabilities. The panorama of vendor capabilities and what is available via TPx platforms has changed in the last few years. POI Members can review the POI 2019 TPx Vendor Panorama report to dive deeper into specific vendor capabilities http://bit.ly/POI_2019-TPx_Panorama). Based on the state of the industry and the need for greater optimization, HQ capabilities have been prioritized and delivered by the vendor community. Yet, many companies are on older technology platforms, which may not have robust HQ or RGM capabilities. Per the current capabilities graph on page 19, 27% of surveyed organizations utilize TPO capabilities. The “work” of optimization and advanced analytics in most companies is completed by the RGM team (+25) and/or a centralized HQ team (+16). Only 3% of optimization work is completed by sales teams. Again, 25% of respondent companies haven’t put an RGM practice in place. In addition, when asked if their HQ planning teams have the ability to monitor and manage go-to-market strategy compliance, 14% of companies have automated top down and bottom up planning & execution monitoring. 54% stated they monitor compliance in offline trackers and 27% are not monitoring compliance. Monitoring execution is critical to improving performance over time. Read the complete POI Best Practice report here Contact Joanie Hampton-Malin for questions on how to access POI Research and Reports at firstname.lastname@example.org
Kellogg’s Partners with Amazon for Rewards Program Source: (Mktg Dive July 15, 2020) With the new rewards program, Cheez-It Snap’d looks to tap into the surge in streaming video viewership, while fortifying its brand position as a snack that compliments such viewing occasions. Launched last year, the thinner, crispier take on Cheez-It crackers was partially informed by data around binge-watching habits and has frequently leaned into those consumer insights to guide its marketing strategy. Learn more
PepsiCo Revenue Sees Q2 Boost in SnacksSource: (CNBC July 13, 2020) CEO Ramon Laguarta chalked it up to Pepsi’s investments, particularly last year, which range from rejuvenating some of its legacy brands to growing its e-commerce business. “Whoever wins in e-commerce now and is able to capture those families that are trying the grocery service for the first time, I think is going to win those families in the future, so we’re investing heavily to try to be the first in that channel”. Learn more
The POI Chicago Summit has been rescheduled to September 29-October 2, 2020- Register Today
Join executives already registered: Nestle, Coca-Cola, KIND Snacks, General Mills, Unilever, Kimberly-Clark, Campbell’s Soup, Colgate Palmolive,Conagra, Grupo Bimbo, Deloleo, Duracell, Keurig Dr Pepper, Kimberly Clark, Nestle Coffee Partners, Hostess Brands, Hormel, Johnsonville, Mars, Kraft Heinz, Mondelez, Kellogg, PepsiCo, Mondelez, Simply Good Foods , Perrigo, Apex Global, Mattel, Perfetti Van Melle, Mrs. T’s Pierogies, Iris Nova, Hershey, Melitta, Henkel, Reynolds Consumer Products, General Mills, Kao, Barilla, Land O’ Lakes, SC Johnson, Morton Salt, Eagle Foods, Walgreen’s, Dollar General, P&G, GSK Healthcare,, Pfizer, Ferrero USA, Casey’s General Stores, Tillamook, Schreiber Foods, Sargento, Interstate Batteries, Rich Products, Talking Rain, Ocean Spray, Riverside Naturals, AAFES, Palermo’s Pizza, Gortons, Clorox, Bel Brands, JM Smucker, Church & Dwight, Hometown Foods, Constellation Brands, J&J, Musco Family Olive, American Tire Distributors, Richardson International, and more
Danone Campaign Targets Millennials, Gen Z Source: (DSN July 2020) Sonika Patel, the vice president of marketing at Danone North America said, “Consumers know and love Activia as one of the original brands to bring probiotics to the mainstream,”. “Our goal is to connect with a younger audience and illuminate how the gut is the starting place for so much about how we feel. Bright, fun and musical, our new direction calls attention to how much of your daily life is affected by your gut. Learn more
If you missed this webinar, POI members can access the recording on-demand anytime here. Answers, approach, and action related to the pandemic, and impact on trade planning, promotions, and Revenue Management!
Conagra Attracting Younger Buyers Source: (Media Post July 13, 2020) In explaining the results to financial analysts, Conagra executives spent ample time showing how new buyers, particularly in the millennial and GenX age cohorts, became repeat customers. While millennials are 25% of the U.S. population, they represented 39% of new Conagra buyers in the 14 weeks ended May 31. Gen X was 29% of the population and accounted for 29% of new buyers. Learn more
U.S. E-Commerce Sales up 25% in June Source: (CSA July 14, 2020) Global online spending rose 28% in June compared to the year-ago period, making it the largest year-over-year increase in sales since COVID-19 restrictions were put in place in March, according to an analysis by ACI Worldwide of hundreds of millions of e-commerce transactions from global merchants. Learn more
POI Virtual Summit Available On-Demand Anytime! Missed it? Register Here to Access and view the world-class content now
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Ocado CEO: ‘The World Has Changed“ Source: (Grocery Biz July 14, 2020) Tim Steiner, Ocado CEO, asserted that the online shift-driven by a fundamental change in how consumers think about buying groceries-was sustainable, and boldly predicted that over time, online penetration could reach as high as 75% to 80%. Steiner said, “Here in the U.K., we’ve seen the market double in a few months. That’s 15 years of growth in less than 15 weeks, and it’s a global trend. In the U.S., the market year on year was up six times. In China, we saw triple-digit sales growth.” Learn more
The Rise of Female Entrepreneurship In CPG Source: (Forbes July 13, 2020) Indeed, while female entrepreneurship has been rising steadily over the years both in the U.S. and globally, the percentage of them who successfully gained VC support remains at the low single digits. That stands at odds with the fact that the majority of consumer purchases are made by women, according to consumer think tank Yankelovich Monitor. In the food sector particularly, women account for 93% of all purchases. Learn more
POI European Summit in Berlin – October 19-21, 2020
Join already registered from: Mondelez, Bonduelle, Heineken, Mars, Blue Buffalo, Nestle, Hovis, JM Smucker,Campari, Carlsberg, Henkel, Clorox, Coca Cola Hellenic, Nestlé UK, Nomad Foods, Beiersdorf, LEGO, SCJ, PepsiCo, Upfield, WN Pharmaceuticals, Essity, Friesland Campina, J & J, Premier Foods, Danone, P&G, Unilever, Orkla, Kimberly Clark, Camelot, Perfetti Van Melle, MolsonCoors,, Campbell Soup, Hormel, L’Oreal, Pladis, Beiersdorf, Arla Foods, Finlandia Cheese, Kellogg, Diageo, Delta Cafes, AB Inbev, Wells Enterprises, Pernod Ricard, Red Bull, SAB Miller and more!
Coca-Cola Adding Contactless Mobile TechnologySource: (Mobile Mktg July 13, 2020) While not strictly marketing-related, Coke’s integration of contactless technology into its self-service soda fountains shows how mobile innovation is playing a role for brands as they look to address pandemic-related consumer anxieties. Learn more