2016 Review & Outlook: Sales & Marketing Trends

This section is diverse, with suggested uses of data ranging from price management to product transparency, but the themes of integration and visibility are still the most prevalent. Many analytics initiatives began in sales or marketing, and this area is therefore slightly ahead of the game in adoption and sophistication.
 
Mary Antil
North America Pre-Sales Manager
 
Alan Miller
VP Sales North America
Kantar Retail XTEL
 
It could be argued that many consumer goods manufacturers have not taken full advantage of world-class analytics and the dramatic impacts which can be achieved. In many CG companies, improvements can be made by addressing the following areas:
 
•  Ensuring you have quality base data.
•  Ensuring trade applications provide actionable insights.
•  Improving the relationship with your retail partners with joint business planning in order to achieve the same goals using the same data.
• Ensuring the KAMs and analysts have adequate resources, tools and skillset to take action from analytics. 
 
There are many noted examples where companies through investments in resources and technology are changing the game. Every trade event can be analyzed for ROI rapidly and this allows CG companies to experiment with tactics that better answer to local shopper needs. Retail execution results can be examined to uncover operational challenges and improve the outcome of future promotional activities. Establishing the link between financial and sales results can provide complete answers to both tactical and strategic questions. And finally, adopting integrated systems with embedded analytics and standard metrics will enable repeatable processes and a cross-functional approach that speeds up decisions, ensures better execution and improves bottom-line results.
 
Joe Bellini
CEO
AFS Technologies
 
The CPG industry is evolving in order to satisfy consumers’ demands by providing a greater selection of products and channels. Technologies — such as mobile, GPS, voice/image recognition, social, and more — will provide the capability for retailers, distributors and manufacturers to react to shifts in consumer demand on a real-time basis. Companies are empowering their field sales personnel with advanced analytics that exploit data from point of sale, trade promotions, sell through, sell in, distribution, and manufacturing, as well as external industry sources like ACN and IRI. Analytical techniques such as management by exception — which will identify potential issues and recommend corrective actions such as a suggested product assortment versus actual ranged products or Share of Shelf versus competition and segment targets — will provide immediate competitive advantage. Strategies based on real-time analysis at retail which drive both trade spend adjustments as well as rapid replenishment at the shelf will separate the winners from the losers.
 
PV Boccasam
CEO
Orchestro
 
In our work with industry leading CPG companies and retailers, we are beginning to see the tipping point of analytics having a transformational impact on how they run their businesses. While the big data analytics market as a whole is still in its infancy, its impact is being seen across the ecosystem. Sales teams are able to have strategic conversations with their retailer buyers about shopper trends, identify specific areas for growth opportunities, and more accurately predict sales for a promotion, taking into account external factors such as weather. Analytics are now driving how field operation teams prioritize their time and which stores to visit based on the true dollar value being lost each hour by an out-of-stock event. With analytic tools that can capture field actions, CPG companies are now able to finally determine the ROI of the investments they make in purchased data and third-party broker partners. We at Orchestro fundamentally believe that it’s not the possession of data that makes you smart; it’s how you preemptively take actions that lead to profitable outcomes.
 
Todd Callen
Executive Vice President
Stibo Systems Inc.
 
Data and analytics for the CG industry have changed its strategies and capabilities across business functions in a variety of ways.
 
Shifts in social media, digital content, and consumer expectations have challenged CPG companies to rethink how they approach sourcing, sustainability, traceability, choice of ingredients, packaging, and how they go-to-market and compete.
 
CPG companies can no longer rely on their brand(s) or product(s) to achieve success; they must be able to deliver personalized customer experiences. In order to adapt, CPG companies must collect, aggregate and analyze data so that they can create better and more targeted experiences that will hopefully foster a following of loyal customers while creating a competitive advantage.
 
Get started:
• Collect data on consumer behaviors, brand and product performance, and your competition.
• Always keep your data clean and up-to-date.
•  Don’t let your data get siloed across your organization.
• Analyze your data and use the insight gained to determine how to create personalized experiences for your consumers and how to best engage with them across various touch points.
• Track your outcomes to determine their effectiveness and ask yourself which marketing campaigns are working or not working, are you improving customer experiences, and/or are you gaining loyal customers?
 
Michael Ferrara
Chief Marketing Officer
HAIRUWEAR, Inc.
 
Big data entered the mainstream in 2015 for marketers and decision makers. The availability of more data is opening up new opportunities for marketing analysis. It’s a huge challenge but at HAIRUWEAR, unlocking big data’s potential as a content and creative tool will be one of our biggest initiatives in the next year.
 
Ready-to-Wear Fashion Hair is one of the largest CG businesses that can be characterized as a niche. Effectively targeting potential buyers is critical for success. We add digital encrypted code (pixels) on all of our digital ads and promoted videos where we can. Information is captured such as gender, age, what they viewed, how long, and other online viewing habits. We also conduct ongoing A/B creative and copy testing to assess effectiveness. Our digital strategy and tactics is constantly tweaked as a result of these continuous assessments.
 
At HAIRUWEAR, we’re unveiling bold, dynamic, elevated lifestyle marketing that will connect with consumers on a whole new level. We’re debuting new products that are completely innovative, setting the trends for fashion hair. Marketing success will rely on superior data analysis, consumer and customer insights, digital expertise, and creative excellence. The challenge will be delivering all four in an integrated, holistic strategy. Better leveraging big data to drive insights and build more creative strategies will be the key to our success.
 
Michael Forhez
Global Vice President, Consumer Markets
1WorldSync
 
Of Transparency and Trust
The movement for product transparency, whether driven by government, industry associations or corporate dictum, has now become a part of our community lexicon. But unlike many industry initiatives that have been taken seriously in the past only to fade from common memory, this particular work is unlikely to disappear anytime soon. 
 
Because for whatever it is you make or sell, the consumer is no longer just reading the back panel to find out what’s inside. They are asking tough questions, actively searching the net for answers, and now making judgments — fair or not — about the brands they once gave their explicit and implicit trust to.
 
We must therefore acknowledge — and begin the hard work of preparing for — a world where product transparency, enabled through technology, could easily make or break the new brands we’re building today as well as the ones inherited a generation or more ago.
 
Supporting this shift will be an array of solutions and processes — linked to education and elaborated on in digital and analog circles — that will address not just product ingredients themselves, but also GMO’s, the issues of health and wellness, environmental sensitivity and sustainability, animal welfare and even fair wage practices.
 
Product and corporate transparency is already forcing marketplace changes not foreseen a few years ago, but in a few years hence could very well determine who’s up or down in the battle not just for share of wallet, but share of heart and mind.
Hail the Consumer!
 
Mike Gamage
Director Strategic Pricing and Customer
Management Solutions
Starbucks Coffee Company
 
Bringing the correct data together to enable sales and marketing to build the bridge to consumers continues to be a struggle within the industry. The majority of solutions are focused primarily on either one area or the other with very little common ground. Finding a solution that bridges the two data sets and brings holistic analytics to an organization will unlock a brand’s value beyond the use of price or traditional marketing tactics. Online marketing has yet to unlock significant value for either the manufacturer or the retailers as the focus continues to be on price incentives versus brand value. 
 
Focusing sales on the “right” price to meet consumers’ willingness to pay in each channel has proven to be a growth engine within Starbucks allowing us to leverage the brand’s strength. The discipline of price management has gone beyond price pack architecture and moved to a data rich environment where true value can be unlocked. There is a continued lack of true innovation and this will require additional focus within CPG on pricing principles. Without a well-defined pricing strategy a majority of CPG companies will be mired in low, single-digit growth. 
 
Dale Hagemeyer
Partner
Promotion Optimization Institute, LLC
 
Last year my comments focused on disruptors such as Amazon, and on data sharing as part of collaboration. But the focus hasn’t been there. The Promotion Optimization Institute (POI) 2015 TPx and Retail Execution Survey (and Report) from December showed that only 25 percent of CG manufacturers have concerns about doing business with Amazon and 37 percent are not concerned at all. The POI survey also showed that data sharing, the underlying current of collaboration, is still severely strained. Only 21 percent of CG manufacturer respondents are truly satisfied with their ability to manage promotions. Only 20 percent are satisfied with their ability to execute at the store level. Seventy-six percent of respondents have issues with data quality from external sources and only 16 percent of respondents say that their retailers share data freely with them. Small wonder that 85 percent said they have problems with their retailers executing what has been agreed upon.
 
Looking more deeply at manufacturers, 77 percent said they have difficulty finding qualified personnel to perform analysis and interpret the sales and marketing results. Only 10 percent say they have automated the post-event analysis process for promotions, and only 53 percent said they have analytical solutions required to make appropriate decisions while in the store. Thus, the insights required to be a good collaborative partner are often lacking. Hence, we must continue to foster an environment that promotes a change mindset for 2016.
 
Rick Hall
Global Lead, Sales Effectiveness
Nielsen
 
For at least a decade CG companies have been turning to analytics to respond to competitive pressure. Early efforts tended to be one-off solutions focused on a specific problem — price optimization or marketing mix. While these analytics produced improvements, the results required human intervention to implement and the gains in one area were often offset in other areas.
 
Today companies are attempting to respond to these pressures in a more integrated way. They are implementing big data environments. They are integrating analytics and sophisticated models right into the data, and linking the results of these analytics directly into their business. We see clients building sophisticated demand models right into their sales planning tools. This enables rapid simulation and impact assessment directly in the business process. The most sophisticated companies are not doing this in isolation but introducing predictive planning in an integrated manner across all their selling levers — Marketing, Assortment, Price, Promotion and Distribution.
 
These “integrated analytics” are still in their infancy, but companies are already finding they need to re-align resources to adjust.
 
Jon Harding
Global CIO
Conair/Cuisinart Corporation
 
As we kick-off a New Year, one of my resolutions is to focus more on data and technology solutions which will better enable all the interactions between the CONSUMER and our brands. I see no letup in the challenge of finding new ways to engage the consumer with our products throughout the lifecycle of “path to purchase” and then consumer service post-purchase. Data and analytics are going to be critical to these interactions to ensure that we use data to better inform product and marketing decisions, and to ensure we have a good understanding of those consumers who purchase one of our valued products. Plus we need to ensure consistent and easy access to data sources and analyses for our team members in sales who interact with our retail partners and directly with consumers. Examples we are working on include: Better integration of consumer data from registration for warranty purposes with our consumer service call centers; better systems for feedback from product demonstrators/educators; better use of social media analytics to drive design and post-analysis of digital marketing campaigns, etc., etc. Ultimately, we aim for an “omnichannel” consumer experience with our brands and products where the critical success factor is convenience for the consumer. All of this requires a lot of seamless data integration and analytics behind the scenes … It is going to be a fun year!
 
Justin Honaman
SVP Digital Solutions
Moxie USA (Publicis Groupe)
 
Direct-to-Consumer (DTC): With new consumer data sources now available, CPG companies are able to more effectively track consumer behavior and product and promotion performance. As P&G demonstrates via their 1, Consumer Place program, DTC relationships enable a broader relationship with the CPG manufacturer across brands, products, packages, and geographies while providing detailed consumer insights to P&G brand leaders.
 
Mobility: Retailer and CPG manufacturers are taking a “mobile first” approach to consumer engagement in 2016. From a consumer perspective, the camera and scanning capabilities of smartphones and tablets allows consumers to scan product codes to get detailed product information, and in 2016, “augmented reality” will become increasingly available in-app to provide life-application demos of consumer products. These capabilities yield data that the CPG manufacturer can use in planning future consumer engagement channel investments.
Predictive Analytics: CPG manufacturers have significantly ramped-up their analytics resources to support data-driven initiatives across the enterprise. CPG manufacturers have traditionally used historical performance (note: many are still stuck in “reporting and dashboarding” versus analytics) and retailer experience to make decisions on price, package, promotions, and assortment. As Coca-Cola demonstrates through the integration of Retailer POS, Shipment, Weather, and other outlet-level daily data, they are able to model daily demand by outlet, optimize orders, reduce out-of-stocks, and begin to affect sales and profitability using a data-driven approach.
 
Kurt Jetta, Ph.D.
Chief Executive Officer
TABS Analytics
 
I question whether “world-class analytics” is occurring in our industry. Too often the industry chases what is trendy or tech-savvy versus what consumers actually prefer. The preferences could easily be uncovered with even “marginally competent analytics.” There are two issues in particular. First, the CPG industry is chasing e-commerce when the data is clear that online sales are well under 2 percent of industry sales and stagnant. The bigger trend in CPG retail is the emergence of small format stores such as Aldi, Target Express, and Dollar Stores. The other misguided march towards technology is the pursuit of more “tech-savvy” promotional tactics such as loyalty card and digital offers. Consumer surveys as well as analysis of POS data demonstrates that in the vast majority of CPG categories, traditional promotional tactics such as circulars and Sunday coupons (FSI’s) are still more preferred and effective than the offers that try to leverage technology.
 
Kevin Klock
President and CEO
Talking Rain Beverage Company
 
Today we’re able to have real-time sales data by account on specific days, which allows us to more effectively utilize our sales team by identifying accounts that are over performing, underperforming or have zero transactions. We also have a better understanding of product that is sold on deal, versus product that is not sold on deal, which allows us to more accurately know the costs that are being absorbed. Knowing daily sales numbers and aligning that with distribution inventories and shipments allows us to operate with less inventory and have inventory positioned correctly. We now have a better sense of how specific marketing and sales programming is affective by retailer, region, and channel of trade.
 
Ram Krishnan
Senior Vice President & Chief Marketing Officer
Frito-Lay North America
 
Data enables communications understanding, not stated consumer research. The way marketers have gathered consumer insights has changed dramatically. We, at Frito-Lay, track conversations across all channels by brand so we can react to a real-time dashboard of consumer sentiment. This has enabled us to have conversations with consumers versus at them. This has led to personalized communication: Communication that’s time- and location-relevant. 
 
Driving all of these changes are venture consumers — consumers willing to invest their time and money while co-creating and engaging with brands. These two-way conversations, combined with an abundance of data and sophisticated data-rich technology platforms offering marketers predictive analytics, have resulted in the evolution of the role of marketers. Marketers are increasingly becoming marketing technologists and their job scope/description/skill set is fast evolving.
 
Technology has a role throughout Frito-Lay beyond marketing. Thanks to advancements in data and analysis, our front-line sales force has access to data on their mobile devices at all times. They know the shape of consumer demand at their store level. That helps us make sure we deliver consistent quantity and allows data analysts to unlock deeper demand signals that will dictate future supply chain reach. 
 
Jonathan Phillips
Principal US Advisory, Consumer Goods
Ernst & Young
 
Many areas of the CPG industry have been positively impacted by advances in data and analytics, but Shopper Marketing, outside a few leading practitioners, remains relatively under developed. While the discipline has evolved extensively in the last 10 years, much of the focus has been on building tools, process, roles and integrated agency/supplier teams. Much less effort has gone into micro targeting and true program measurement — a miss given the relentless and continued focus on cost cutting and ROI that is pervasive in our industry today. We see winners focusing in three areas:
 
Actionable Insight — using technology to connect insight across the path to purchase, allowing better targeted briefs by their shopper agencies.
 
Fine Tuning Fast — using predictive analytics to test campaigns and POS before full scale launches.
 
Measurement — creating short and long-term effectiveness measures that capture ROI as well as ongoing impact on shopper loyalty and conversion.
 
Jeffrey Sampson
CEO
Upside Commerce, Inc.
 
The advent of digital technologies over the last decade have enabled brands to build large followings of consumers online. The digital tools used to engage with consumers were based on frequency, reach, impressions and a lot of guesswork.  The missing piece of the puzzle has been the availability of data delivered in real time. Without data, the brands’ ability to deliver a return on investment is nearly impossible. However, affinity-based engagement combined with data for context/location and attribution prove to be a powerful combination. These three data attributes form the foundation for utility.

The next era will be defined by how brands utilize data to execute utility marketing. Utility marketing is defined as the level of personal information that a consumer will share in exchange for convenience or economic benefit. Brands who do this very well include Starbucks and Amazon.com online.  Data is even more critical when a brand sells their products in physical stores. Real-time POS and consumer-level data enable brand marketers to know top retailers, geographies, stock levels, optimal price, shopping times and individual consumer behavior.
 
Brand marketing leaders should take every opportunity to explore emerging capabilities, which enable them to reach their consumers at the right moment, drive purchases in-store and provide profitable growth with repeatable success through data.
 
Amitava Sengupta
Vice President, Retail & CPG Industry Solutions
HCL Technologies
 
In the past, only a few large retailers and their suppliers had the capability to share data and build collaborative platforms to enable joint planning and execution. With the progress in technology it has become possible for much smaller organizations, both retailers and suppliers to drive a meaningful ROI from such programs. And we have seen companies either adopt a big bang re-haul or incremental approach to drive such programs. 
 
While a mid-size CPG manufacturer has significantly utilized Advanced Analytics and Visualization techniques to create a new transformative platform that drives key KPIs like out of stocks, identify and reduce phantom inventory and fine tune forecast accuracy, in a near real-time basis, another FMCG conglomerate, however, took a staggered approach to analytics — one-piece-at-a-time. Results were closely monitored; if ROI was positive, they added the next bit. Their analytics program achieved strategic objectives — win back market share and improve sales in areas previously not contemplated.
 
Ashish Srivastava
Vice President, Global Head
Wipro Promax
 
Today, it is harder for CPG companies to use brand equity alone to maintain marketplace leverage with top retailers. It is also harder for the established, “uber” retailers to maintain their consumer market share against the presence of “e-tailers,” and other competitive channels to market.
 
The real power in the marketplace has shifted to the “digitally-enabled” consumers who will reward CPG companies, and retailers that can best tailor their product offerings, and value proposition to meet their preferences. To achieve competitive differentiation, trade promotion optimization capabilities, with the ability to incorporate customer loyalty, and affinity marketing data will become “mission-critical” requirements for CPG companies.  
   
CPG companies and their retail trade partners must continue to adapt to this new marketplace dynamic by continuing their efforts to advance core competencies in capturing, processing and analyzing consumer data, in addition to predicting the effectiveness of various pricing and promotional tactics.