Even though trade spend is the second largest expense item — after the cost of goods sold — 60% of trade promotions go unevaluated because employees don’t have the tools or enough time. At the same time, margin-pressured retailers are demanding more visibility. CG companies want to maximize their return on billions of dollars of spend: They need to quickly replicate and scale the most successful programs, change or stop the unprofitable ones, and ensure they all stay on budget and within promotion guardrails.
Joint business planning enables CG companies and retailers to target investments at the store and channel level. That sounds simple enough. But the challenge for retailers and CG companies is that omni-channel selling has made the route to market much more complicated. Suddenly, CG companies aren’t just building a relationship with one buyer — they’re working with multiple partners across virtual and in-person teams. Using a spreadsheet to keep track of promotions in real time across regions, locations, and selling channels isn’t just cumbersome and slow — it’s impossible. And manual processes keep promotions from being as effective as possible, because organizations are unable to identify what’s working (and what’s not) without real-time, dynamic data.
To meet heightened retailer expectations and get the most value from their trade spend investments, CG companies should reevaluate their trade promotion management (TPM) capabilities. Through digitization, CG companies and retailers can meet TPM’s challenges head-on and create win-win promotions that maximize ROI.