Next Tuesday (April 7) I will share the stage at the Grocery Manufacturers Association conference in Miami with two DemandTec customers — Kraft Foods and Safeway — to discuss the business benefits of collaborative deal management. We’re expecting more than 250 attendees including CPG manufacturers, a few grocery retailers and a smattering of technology vendors, consultants and media pundits to join us for this session.
So what is deal management? In a nutshell, it’s how manufacturers and retailers agree to which in-store promotions make the calendar, at what terms, for which products and during which time periods. The traditional deal management process is pretty inefficient involving a combination of paper deal sheets, spreadsheets, faxes, courier deliveries and phone calls…resulting in a lot of wasted time and energy. Each retailer uses a proprietary deal sheet and deal term nomenclature, forcing the vendor community to adapt to 20+ unique processes.
Online, collaborative deal management offers a more efficient way for big retailers (like Safeway) and their entire ecosystem of manufacturers (including Kraft Foods) to bring sanity to the process. Paper deal sheets are now a thing of the past. Deals are submitted and negotiated online with deal status and comments fully visible to both parties. No lost deals, and no anxious vendors. Meaningful efficiency gains are realized by both parties, allowing everyone to focus on more strategic activities. DemandTec’s Deal Management software service leads the industry, with retailers accounting for roughly 33% of US grocery ACV using (or deploying) the software service.
So collaborative deal management is definitely a good thing for the industry. As more retailers migrate to an online, collaborative process life gets a little easier for everyone. And this is ultimately a good thing for consumers. As trade plans are entered and negotiated more efficiently, more working dollars can flow to the shelf to support an incremental program or two.
If you plan to attend the GMA conference, we’ll see you in Miami!
Yesterday I appeared as a panelist in a “virtual brown bag forum” organized by Trade Promotion Management Associates (TPMA) and hosted on Second Life. The forum was structured like any real-life event would be with vendor exhibition booths, scheduled panel discussions, quality networking time…and, yes, even coffee was served. More than 160 CPG industry executives registered and the panel discussions were engaging and interactive. The forum went off without a hitch, and everyone seemed to have a lot of fun.
As I described to my colleagues after the event, virtual events combine the fluid interaction of a traditional conference call with the rich multimedia value of a Webex meeting. In fact, it felt about as close to a real-world event as you can get. While at first the idea seemed a little gimmicky, I think we all recognized the business value of this medium. Should virtual events replace real-life events? Definitely not. But they certainly have their role, especially in cash constrained times like now.
Congratulations to TPMA for trying something different and pulling off a great event!
From a CPG manufacturer perspective, Wegman’s has consistently held an open and progressive approach to working with the vendor community. Specifically in the area of pricing and promotion strategy, the upstate New York retailer has been a leader in adopting new approaches that eventually extend out to the mainstream retailers.
In 2007 Wegman’s shifted from a Hi/Lo (higher base price with frequent promoted price points) pricing model to EDLP (everyday low price) program throughout the store. Danny Wegman, CEO of the independent grocery chain, did a little preemptive damage control and had this video posted to YouTube outlining the strategy shift rationale.
His audience is clearly the consumer base and the script is somewhat forced, but I thought Mr. Wegman did a decent job of explaining why the shift is ultimately good for consumers. As added entertainment, pay attention to the Ross Perot-like charts that Wegman creates to drive his points home.
Lori Castle from Consumer Goods Technology recently asked me a few questions about win-win trade promotions in the CPG /Retail industry. While much has been discussed on this subject over the years, the majority of trade promotions benefit retailers and deliver marginal value to the manufacturer who has funded the activity.
But leading manufacturers are rethinking their approach to how they plan, package and present trade plans for their retail counterparts. Here is the Cliff Notes summary of the interview and customer case study that I shared with Lori:
1.Keep the consumer at the center of equation. In other words, build your analysis and measurement models off of consumption data vs. shipment data only.
2. Articulate how the trade plan will specifically benefit the retailer in terms of incremental category volume and profit. Quanitfy source of gain as it relates to private label and national brand competition.
3. Don’t underestimate the importance of the actual sell-in presentation. What the data says is just as important as how it is presented.
Next Tuesday (April 7) I will share the stage at the Grocery Manufacturers Association conference in Miami with two DemandTec customers — Kraft Foods and Safeway — to discuss the business benefits of collaborative deal management. We’re expecting more than 250 attendees including CPG manufacturers, a few grocery retailers and a smattering of technology vendors, consultants and media pundits to join us for this session.
Yesterday I appeared as a panelist in a “virtual brown bag forum” organized by 
Lori Castle from Consumer Goods Technology 
