Home products company Fortune Brands is investing in its trade promotion planning and pricing capabilities in a bid to better navigate today’s retail volatility.
As consumer behavior shape-shifts into new patterns — and inflation and supply chain disruption persists — consumer goods companies are increasingly seeking the ability to not only identify the right price at the right time, but also have this information shared across the enterprise to predict and lessen the impact of out-of-stocks. Thirty-nine percent of respondents in CGT’s October Sales & Market Report said they were either in process of a major upgrade of their TPM/TPO technologies or intended to do so within the next 12 months.
Deerfield, Ill.-based Fortune Brands, which operates in the water innovation and outdoors and security markets, includes such brands as Moen, House of Rohl, Master Lock, and SentrySafe in its portfolio. The company recently separated from its cabinets business in December.
Through a partnership with Enterra, Fortune Brands expects to improve its ability to make faster and more intelligent pricing decisions, Chris Venditti, RGM leader at Fortune Brands, told CGT, to ultimately acquire market share as well as enhance its value proposition to consumers.
“Our ability to proactively take data trends and adjust our pricing strategies will provide us with a large first-mover advantage in the market,” noted Venditti, “[and] our intelligence on our pricing decisions will drastically improve to leverage our pricing execution to take market share.”
Enterra’s technology leverages artificial intelligence to automate pricing analysis and optimization, provide prescriptive recommendations, and predict results to identify optimal trade promotion and pricing schedules. Fortune will also leverage the tech to optimize list price changes across different distribution channels.
On track to begin utilizing the upgrades in early Q3, Fortune will then partner with its retail customers to implement strategic pricing and promotional adjustments with the goal of delivering mutual value. The company also expects to realize benefits internally within its S&OP process by leveraging the statistically generated baselines as well as intelligent promotional lift forecasts, according to Venditti.
“We have never been in a more volatile pricing market,” he said. “The pandemic’s impact to the market, the consumer, and pricing in general has completely changed. We have the unique ability to react just as quickly and take advantage of these new trends and consumer behaviors.”
“Externally, we anticipate having this intelligence will further validate Moen’s position as a thought leader within our category which will better our partnership with our retailers — including our ability to influence and service as category captains as well,” he added.
Kraft Heinz’s expansion of its Agile-based strategy across all business functions, which includes pods of teams hyper-focused on specific challenges and opportunities, is expected to help it manage increased promotions this year to better compete with private label.