Improve Trade Analytics, Retailer Collaboration and Business Performance
Every consumer packaged goods (CPG) executive is focused on driving better business performance and margin improvement. Those that understand the value of trade analytics and have discovered how to unlock that value for their company are ahead of the game. The month, CGT sits down with Chris Rice, vice president Sales & Marketing, North America for Exceedra Inc., to further explore the opportunities around improving trade analytics and more.
1. Where do you see opportunity for CPG companies to improve trade analytics?
RICE: Many CPG companies are seeking to better manage trade spend while at the same time try to improve retailer collaboration. These objectives are inherently linked and relate directly to a manufacturer’s trade planning perspective, especially in the area of customer business planning. Traditionally trade planning has been an internally focused process based on shipments, while the retailers are focused on category consumption. Making the shift in planning perspective to consumption based, will allow customer managers to better understand the impact of their trade activity on the large retailers. This shift can be a difficult one to navigate, but when it’s done the right way it will begin to unlock the value of trade analytics and trade promotion optimization.
2. How will shifting the customer business planning focus help unlock the value of trade analytics?
RICE: In order to make changes in the way trade is being spent, companies can tweak trade strategy dictated from the top down which only goes as far as the customer managers’ ability to effect that change with the key retailers. The other approach is to help customer managers to change the conversation they are having with retailers. Shifting the focus from the impact of a promotion on the manufacturer’s products or portfolio to the impact on the retailer’s P&L and category will get the customer manager speaking in the retailer’s language. Armed with the ability to predict scenario options that include the impact on the retailer, the customer manager will have better tools to change the conversation on promotions and strategy to that retailers will embrace. This is the foundation for retailer collaboration.
3. How can a manufacturer get started on the path to improving trade analytics through customer business planning?
RICE: This evolution is most effective when driven by executives supported by training and systems to support this process. Provide the right KPI’s, train the field how to use the info, start to measure them against the improvement, and finally incent the right behaviors to make the change a sustainable process. As simple as this sounds, there is real work and effort here that will pay off as the sales team embraces the new approach and changes the dialog with the retailer. The reality is some retailers and category buyers are going to be more receptive to this information than others. That’s where the people element of the process really makes a big difference.
1. Where do you see opportunity for CPG companies to improve trade analytics?
RICE: Many CPG companies are seeking to better manage trade spend while at the same time try to improve retailer collaboration. These objectives are inherently linked and relate directly to a manufacturer’s trade planning perspective, especially in the area of customer business planning. Traditionally trade planning has been an internally focused process based on shipments, while the retailers are focused on category consumption. Making the shift in planning perspective to consumption based, will allow customer managers to better understand the impact of their trade activity on the large retailers. This shift can be a difficult one to navigate, but when it’s done the right way it will begin to unlock the value of trade analytics and trade promotion optimization.
2. How will shifting the customer business planning focus help unlock the value of trade analytics?
RICE: In order to make changes in the way trade is being spent, companies can tweak trade strategy dictated from the top down which only goes as far as the customer managers’ ability to effect that change with the key retailers. The other approach is to help customer managers to change the conversation they are having with retailers. Shifting the focus from the impact of a promotion on the manufacturer’s products or portfolio to the impact on the retailer’s P&L and category will get the customer manager speaking in the retailer’s language. Armed with the ability to predict scenario options that include the impact on the retailer, the customer manager will have better tools to change the conversation on promotions and strategy to that retailers will embrace. This is the foundation for retailer collaboration.
3. How can a manufacturer get started on the path to improving trade analytics through customer business planning?
RICE: This evolution is most effective when driven by executives supported by training and systems to support this process. Provide the right KPI’s, train the field how to use the info, start to measure them against the improvement, and finally incent the right behaviors to make the change a sustainable process. As simple as this sounds, there is real work and effort here that will pay off as the sales team embraces the new approach and changes the dialog with the retailer. The reality is some retailers and category buyers are going to be more receptive to this information than others. That’s where the people element of the process really makes a big difference.