Consumer Goods Technology - October 2018 - 14

CONSUMER GOODS TECHNOLOGY

TRADE

PROMOTION
MANAGEMENT

REPORT 2018

FIG U RE 4 : Keys to ROI Forecasting
Which components are most critical to "optimizing"
the ROI forecasting process (select two)?

Historical trade promotion data

56%

POS data

56%
31%

DTC promotions and event data

28%

Sell-in data

22%

Syndicated data
Store inventory data

8%

FI G U RE 5 : The State of Promotion Alignment
How often are your trade promotions aligned with
your corporate marketing events, direct-to-consumer
promotions or e-commerce promotions?

Sometimes

69%

Always

14%

Rarely

14%

Don't know
Never

3%
0%

basic metrics (sell-in volume, revenue, profitability, POS)
"very well" and 24% stating that they do the job "poorly"
(Figure 10).
With such low opinions of measurement capabilities, it's
at least reassuring that most companies feel their promotions
typically achieve the planned objectives - if one's standards
aren't terribly high: only 27% of respondents say they hit
their goals with better than 75% of promotions; 27% claim
to still be in the dark about results (Figure 11).
Of course, it goes without saying that addressing all these
issues is critically important for CPGs, since the practice is
expected to remain just as vital to success in the future: 49%
of respondents expect trade spending to increase over the
next five years, and only 17% believe allocations will decline.
(The rest expect funding to remain the same).
The more things change in the consumer goods industry,
the more they may very well stay the same.

14

CGT | OCTOBER 2018 | CONSUMERGOODS.COM

Positive Steps to
TPO Transformation
C P G S A R E H E A D I N G T O WA R D A FA R MO RE
I N F O R ME D F U T U R E

Executive focus on trade promotion has grown
substantially over the past decade. The recent
burst of technology, social media, e-commerce
and consumer online purchasing collectively
have had this impact. Financially, the huge
spending levels at consumer packaged goods
companies - it's typically the second highest
BY ROB HAND
line item on the corporate balance sheet - have
TRADE PROMOTION brought trade promotion into the top tier of
DOMAIN LEAD
digital transformation priorities.
CAPGEMINI
In the survey, 59% of respondents report that
their company's attitude toward trade promotion is now extremely
important; 67% believe that promotion planning and optimization is
their single most important issue, and another 17% believe that retail
execution is most critical - higher than in previous surveys of past years.

Data and Analytics
Only 14% of survey respondents say that data and insights are the most
important single area of focus, which is not consistent with the responses
provided for all of the survey's other related questions (Figure 1).
Given the expanding number of initiatives around big data and the
growing use of advanced artificial intelligence and machine learning
technology in trade promotion, demand planning, and consumer
marketing, we are able to determine that data and insights clearly
play a critical role.
There is a great deal of work to be done to improve levels of
satisfaction with current analytics tools and results, however. No
respondents said they were completely satisfied with the quality of
performance analytics to which they have daily access; 63% professed
to be "somewhat satisfied" and 37% said they were unsatisfied. This is
a trend that must change, especially considering the staggering amount
of money and resources being invested in big data and analytics tools.
The survey showed that the most critical data for trade promotion is
historical performance results (Figure 2). Evaluating responses from just
marketers (see Survey Demographics), we find that 25% feel consumer
demand and shopper intelligence is most important. The trend toward
greater integration between trade promotion and corporate direct-toconsumer marketing is gaining strength. We therefore expect this figure
to climb over the next few years as companies begin combining and
aligning trade promotion with corporate marketing planning.
The typical cadence for trade promotion performance metrics has
been on a weekly basis. However, the marketplace is beginning to
demand higher frequency of performance intelligence, and this was
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