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!
This is a great presentation on digital promotions and the role they play in the marketing mix for CPG brands. The key takeaways here that I have also observed from own experience include:
1. Now more than ever, consumers are responsive to online promotions. All the data I have seen supports this reality.
2. Integration, integration, integration — into the broader media plan, into mobile, via social media, onto packaging. The digital promotion carries the conversation beyond the initial dialog.
3. Online promotions can be messy and wrought with legal complications. Hire a good promotion attorney to keep you out of hot water.
Thanks to Team Digital for posting this to SlideShare.
Well, it was over before it really even started. This week’s announcement that Nielsen has suspended the PRISM in-store data program was unexpected, but not terribly shocking. The goal of PRISM was to define generally accepted metrics for in-store marketing and merchandising along with syndicated data from a network of participating retailers. This program would have set the stage for a massive reallocation of marketing dollars from traditional media to in-store activities. CPG marketers, including Procter & Gamble were very excited about the prospects for PRISM and the in-store visibility it would finally provide to the industry.
That was until Walmart unceremoniously backed out of the program last month. This single move took the wind out of the sails for Nielsen’s ambitious plans. Getting this program off the ground without Walmart will be difficult at best, given that many manufacturers source up to 25% or more of volume through this single retailer.
So where does this leave an industry that desperately needs deeper in-store marketing and merchandising visibility? Continuing to throw dollars at legions of in-store merchandising audit teams doesn’t scale and isn’t cheap. Inferring in-store compliance from the patchwork of retail POS and syndicated market data won’t deliver a consistent, comprehensive set of causals to rely on.
Ultimately innovation will prevail and save the day. Perhaps an idea like Store Eyes, which I blogged about recently, will provide that right balance of rich store-level data in an affordable and scalable fashion. I sure hope someone capitalizes on this opportunity, and real soon.
On Feb 3, I will appear on a virtual panel hosted on Second Life titled “Positioning Your Trade Promotion Program for Economic Challenges” . The event and panel is organized by TPMA (Trade Promotion Management Associates) and will feature many of my industry peers from Oracle, SAP, Booz & Company, Information Resources and more.
This should be interesting and fun on many levels. TPMA is touting this as the first virtual event of its kind in the industry, so it’s a bit unclear right now how many folks will take the time to register and attend. But with corporate belt tightening and travel restrictions in full force, events like this make it easy for industry professionals to stay connected without ever leaving the office.
On a related note, Second Life and related virtual worlds have started to attract marketing investment from big brand advertisers including Coca Cola and Procter & Gamble. Use cases range from product concept testing, virtual focus groups and more. I’ll explore this marketing vehicle in a separate blog post as I learn more.
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.
