Trade Promotion Excellence: CPGs Must Embrace Change Now

Read the full "Journey to Trade Promotion Excellence" Roadmap

Q: In what key ways has the practice of trade promotion management changed in the last five years?

Trade promotion management has actually changed very little in the last five years, and that’s the essence of the problem! While we have certainly seen an increased demand to address rising trade spend, there has been a very low uptake of tech solutions. Rather than a visionary approach with an openness to process-led transformation, we see most CPG companies fixed in the transactional mode: still dependent on spreadsheets, stuck in conversations focused on efficiencies, and searching reactively for functionalities they hope might improve their existing legacy solutions. 

For instance, research confirms that CPG significantly lags behind in its uptake of solutions enhanced by artificial intelligence. According to Gartner, there has been a low 15-20% uptake in digital solutions — and these are still dependent on process, so deliver very little change. 

When it comes to improving trade promotion profitability, most companies are not yet asking different questions or looking for totally different solutions. What is sorely lacking is the vision of what it takes to be a future-fit CPG company managing trade promotions in a sustainable way.

Q: How would you scorecard the industry right now? How many companies have addressed the need for change to improve their revenue management practices?

The majority of CPG companies are still operating in the old paradigm with legacy solutions combined with spreadsheets. Of course, everyone wants to improve their revenue management and organizations do try. 

There are many CPG companies paying way too much money, and taking way too much time, to implement solutions that don’t deliver their business cases. There’s low awareness and understanding of the latest tech and what it can do right now for businesses. There’s a lack of vision among leadership, a lack of willingness to embrace new tech and a lack of ownership of the processes that are needed to get a CPG company to today’s technological frontier. 

This, of course, has far-reaching impact, such as creating a serious disconnect between young Millennial workers and the tools the business provides for them to do their work. After all, you can’t expect the Millennial Generation to go well together with spreadsheets. 

Q: What have solution providers been doing to facilitate the transformations needed to address these changes? Do they have the authority to lead the way?

At visualfabriq, we have brought our solutions to market in a responsible way. We are engaged on an ongoing basis with leading global analysts such as Gartner, Promotion Optimization Institute and Forrester so that CPG companies can easily access independent evaluations of our solutions and our company. 

As the first provider to bring an applied AI solution to the market, we also recognized that we have a role to play in creating awareness and promoting understanding of AI. Our leading AI thought leader, Carst Vaartjes, engages, presents and publishes to help the CPG industry better understand applied AI and what it can do for them right now. 

Our authority, though, doesn’t just come from the perspective of our leading tech innovation. As the founders of visualfabriq, Carst and I were previously CPG professionals. We created the visualfabriq platform and solutions because we had first-hand experience with not having the tools we really needed and wanted. We built the platform to integrate any volume, velocity and variety of both internal and external data, in a matter of minutes, with a single version of the truth because we deeply understand what the CPG industry needs in order to plan, manage and optimize trade promotions that do increase revenue and profits.