How to Use Data to Execute and Maintain Brand Promotions
CPG brands have a huge possibility to succeed if they can master the retail channel, but those who have already participated in the market are aware that success requires a dedicated investment. To maximise that investment, CPG sales and marketing teams are putting data at the centre of their retail promotion – execution efforts. By prioritising and maximising high-opportunity projects, they are able to gain the intelligence they need to execute and maintain brand promotions.
Promotions are the second-largest line item on a CPG company’s P&L after cost of goods sold and can represent up to 25% of revenue. However, many of these in-store promotions fail to significantly increase sales or, worse yet, have the opposite effect. One estimate states that 20 to 30 percent of trade promotion execution reduces margins since they don’t increase sales by enough to cover their costs.
How can businesses get past obstacles like out-of-date analytics and a lack of comprehension of the effectiveness of promotions so they can not only plan better promotions but also carry them out better? Answers may come from granular and current data on store circumstances.
Data-driven approach to execute and maintain brand promotions
Activity Data
It is the responsibility of the field representatives to correctly set up and maintain those promotions, regardless of the size of a business. That entails being prompt, consistent, and on-brand. Brands should frequently monitor the field team’s activities, including indicators like visit frequency, territory coverage overall, time spent in-store, and more. Activity data is the name given to this category of data.
See how the most dependable companies use activity data tracking to carry out and manage promotions:
- By planning each of their salespeople’ account visits, assigning specified duties for them to complete when they arrive, and then reporting on the data to spot any gaps, they can ensure a synchronised promotional rollout.
- Using a rep’s in-store time against the time necessary to properly put up a display might help you spot possible issues or spot super-productive reps.
- Keeping note of when each rep last provided service for each of their accounts can help maintain the increase in revenue brought on by more displays.
Observational Data
Big consumer brand branding professionals’ worst nightmares include twisted price tags, broken shelf talkers, and damaged displays. Promotions cannot reach their full potential or have a reliable impact on sales if they are not properly managed and conducted. Observational data can be used to quantify the in-store presence, including stock levels, the number of facings, ongoing promotions, and anything else that might be harmful to the success of promotions.
Here are some strategies used by leading companies to ensure that promotions are treated fairly:
- By asking representatives to take pictures and respond to brief questionnaires on key areas of a promotion, you can ensure that displays maintain their best appearance and follow brand rules.
- Improving existing and upcoming campaigns by gathering data on things like foot traffic and shopper response.
- When it is the retailer’s responsibility to maintain a promotion or display, periodically checking in to make sure everything is in working order helps to verify that both sides are upholding their obligations.
Sales Data
There are many reasons why brands run promotions, but the goal of these campaigns is almost always to boost sales. Large brands continuously run “successful” promotions through dramatically different merchants because they have an understanding of the effect a particular campaign has on sales. Brands may measure important metrics, such as how much of each SKU sold over a specific time frame and how their product performs to other accounts and SKUs, by measuring sales data. Check out these strategies these companies are using to improve their promotion execution:
Choosing which promotions to run at particular merchants will depend on the sales boost from previous promotions. It has become simple for brands to be prescriptive in their promotional approach by combining sales data with observational data.
When a promotion is about to start, look for an immediate change in sales trends; if there isn’t one, the promotion may not have been properly set up.
Using the results of prior promotions’ sales to support the implementation of those promotions in further retail locations of the same chain.
Why do more CPGs need store-level data?
Traditional mass media channels like TV are losing market share to stores. Why? Because the “first moment of truth,” the purchase decision at the shelf, is influenced by in-store marketing tools. But the real query is whether CPG firms even track their campaigns’ success. If so, are they applying sufficient analytical rigour?
The effects of a few promotions are being studied by whole teams of analysts at some major manufacturers. However, a study by Booz & Co. found that only one in five businesses can track their trade spending down to the individual event level. According to a more current POI report, a consumer goods company has been able to evaluate a maximum of roughly 40% of promotions.
Planning for promotions is the area most impacted by this. The promotional process cannot effectively capture cause and effect insights due to the lack of objective store-by-store data. Because of this, the majority of manufacturers choose a “grandfathered” strategy for promotions, reusing the same initiatives year after year. Additionally, they are forced to work with retailers using “pay for performance” strategies that are average-based and fail to account for the many complexity and interdependencies of performance that enable store segmentation and analysis.
Using crowdsourced data from a wide number of businesses to assure display compliance and continuously track campaign success is a quickly emerging solution to this tricky situation.
Crowdsourcing in retail quickly and accurately delivers huge data to CPGs. CPGs may easily get solid, accurate data on a large scale by utilising consumer auditors who do in-store display and shelf audits. Through direct insight into in-store execution provided by this data, bias and room for error are greatly reduced.
The “crowd” is most frequently used to conduct survey-based audits, which are frequently supported with store photos. With image-recognition based smartphone apps, more advanced manufacturers also empower this consumer field force, entirely digitising the store and delivering more data for analysis.
Crowdsourced data collection at the shop level has the capacity to impact promotional outcomes in the short term and insights in the long term.