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Brett Goffin from Google spent some time with Bob Houk, Executive Director of Trade Promotion Management Associates (TPMA), discussing how and when the trade promotion discipline will adapt to the digital world.  Some very interesting opportunities for sure.

As Bob and Brett discuss, the trade promotion discipline is deeply rooted around driving value for both trading partners — manufacturers gain more prominent placement for their products, while retailers monetize lucrative in-store marketing vehicles.  This fair trade has taken place for at least the last century, and even more recently both parties have doubled down their investments to scale shopper marketing initiatives.

But taking this a step further, how do multi-channel retailers monetize available trade dollars in their online storefronts?  Will manufacturers realize the same value from a “virtual” end cap as they do for a physical end cap?  The industry consensus points to a resounding “yes”, and this model is starting to take shape.  Don’t be surprised to see a case study or two on this subject at an upcoming TPMA event.

For a primer on trade promotion marketing, an overview of  Bob Houk and the TPMA, and a quick history lesson on the Robinson-Patman Act, check out Part I of the video series.

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!

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.

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.