Over 300 FMCG professionals joined our webinar on impactful trade promotions
Our keynote speakers were Pekka Ajanto, Sales Director at retail marketing agency Johdin and Juhani Åström, Customer Marketing Manager at Lejos. Lejos is a marketing, sales and distribution company that represents some of the world’s best-known brands in Finland. Teemu Tikkala, an experienced K-food retailer within the K group took part in the panel discussion, and represented retailer’s point of view.
Digitalization, brick and mortar & trade promotions
Digital technologies are everywhere and impacting each individual, business and industry. The pandemic hasn’t slowed down the digital transformation of grocery industry but the opposite. Only e-grocery in Finland has been demonstrating phenomenal growth during the past couple of years and retailers have done all they can to keep their e-commerce capabilities up to speed. Even for some FMCG brands direct-to-consumer channel has become a relevant part of the strategy.
Today's brick and mortar grocery stores are geared up with modern digital displays that provide several opportunities for tactic or cross promotions. For example, on Fridays displays at the entrance could stimulate shoppers to try new pizza toppings in the theme of Pizza Friday, or a digital display that is placed on top of an end cap filled with finest chocolate could be great spot for promoting coffee.
In his keynote, Pekka Ajanto highlighted the importance of mobile as means for delivering personalized promotions especially in the future. The opportunities that have been typical to e-commerce, like recognizing individuals through insight, are expanding also to brick and mortar. This allows personalized promotions to be pushed to recognized individuals right at the shelf through applications. In the future, triggered shoppers could be guided from product to another using beacons and successful cross-promotions executed without close proximity of complementing products.
Digitalization enables many new ways to do promotions and that emphasizes the importance of measurability. With the help of technology and analytics retailers and suppliers can gain good understanding of the impact of different activities, and are able to invest in those activities that bring the desired return.
Unleashing the potential of data and AI
The shared goal of retailers and suppliers is to develop and expand the right product categories and offering to continuously serve the shoppers better. Trade promotions play an essential role in this. The traditional way of measuring the impact of trade promotions is to look at the sales figures. But there can be more than one target when doing trade promotions and as such there are also other metrics that can and should be used.
Often retail and suppliers have plenty of data in their hands and the most challenging task is to identify the most relevant figures and turn them into actionable insights that help plan the future activities on chain and store level.
The closer you can get to the interaction between the shopper and the trade promotion on a store level, the better you can analyze its effectiveness and profitability. The ability to measure the overall performance of different actions, compare relevant KPIs and gain actionable insight is valuable when discussing future promotions within retail.
However, due to the level of details needed, it’s easy to find the benefits of AI in analyzing and planning trade promotions. When you are able combine historical sales and promotional data with AI capabilities you have all it takes to be able to forecast promotional impact of future promotions or for calculating baseline sales.
Juhani Åström highlighted also the importance of planning and analyzing tools when making chain level plans. “Being able to simulate the impact of different campaigns helps identify the campaign types that bring supplier the best return. Another important aspect is to get campaign forecasts integrated with demand planning tools, such as Relex, without additional manual work.”
Without an intelligent tool, the opportunities of data are rarely fully exploited.
Without an intelligent tool, the opportunities of data are rarely fully exploited. Although suppliers seek to stay in regular contact with retailers and share their insights on category performance, the days on the store floor are often busy and limited in time. Insights that are based on shared data will add transparency and improve the collaboration. In the end, both parties want to ensure the demand is met and the right products can be found on the shelves and are included in the promotions.
Agility is an asset
Seasonality is typical for grocery industry and annual planning is not going to disappear. Regarding annual planning, panelists highlighted the importance of open discussion between retail, suppliers and marketing partner. However, in order to succeed and stay ahead of the competition being agile in decision making, testing new ideas and learning fast is vital.
In order to succeed and stay ahead of the competition being agile in decision making, testing new ideas and learning fast is vital.
In addition to retail, also for brands social media is a tool that allows them to react quickly and provides the possibility for a direct business to consumer dialogue. Executing locally targeted campaigns in social media is easy and it’s also a good platform for promoting novelty products and campaigns effectively. When linked directly to e-commerce, measurable results are gained easily.
As in all promotional activities, also in social media campaigns it’s important that increased demand can be met. Successful campaign planning ensures shelves are stocked in line with demand and shoppers will not find empty shelves.
Even outside of planned activations and campaigns, consumer trends and phenomena can spark abruptly through social media platforms. Agility and having the capability to act quickly on a store level is essential in order to catch the opportunities. It also allows brick and mortar retail to try out new concepts. When a trial turns out to be successful, it’s safe to scale it wider.
Digital, data-driven future
The pandemic has accelerated many digital advancements in the retail industry. It has also demonstrated that creating velocity around organizational decision making is needed as things can change quickly and you need to be ready to catch the moment. To keep up with the pace of evolving needs of today’s shoppers, seamless collaboration is needed from brands, retailers and their marketing partners.
The future is full of opportunities for brands and retailers that are prepared to move quickly, understand the power of data driven decision making and are ready to leverage new digital tools.
If you missed the webinar, the recording is available here. The webinar was held in Finnish.