Leveraging AI to Improve Trade Promotion Success

CPG companies are increasingly harnessing growing volumes of consumer data through online marketing and direct-to-consumer sales platforms. These companies can enhance their trade promotion activities through artificial intelligence and machine learning, but they must collaborate with retailers to do so. Together, the two can better identify ineffective promotions, forecast more accurately and optimize promotions to generate an optimal sales fit.

In this post, we’ll discuss how AI and ML can improve trade promotion when retailers and CPG companies work together.

AI inputs from all data sources

Today’s analytics tools use data from internal sources, including everything from point-of-sale data to prior marketing campaigns, but also external sources, which encompasses the third-party data that retailers have traditionally relied on like industry reports, weather data and competitor campaigns.

With the right tools CPG companies can also input data from social media sources, enabling them to stock shelves and rearrange front-aisle displays in step with trending products and brands. 

To predict the success of product sales and trade promotion spend, internal and external data sources are fed into an analytics solution with AI and ML capabilities. The resulting insights impart heightened confidence on trade promotion efforts for CPG companies, while retailers can more accurately stock their shelves with popular items.

AI enables more personalized offers

More and more, brands are moving to a “modern CPG” model, meaning customers interact with brands on their own terms, through personalized experiences that are accomplished with AI and ML, by way of data.

Retailers leveraging these tools are better equipped to offer their customers personalized offers, and discounts, coupons and recommended products are presented through modern digital marketing tactics, like email promotions and in-app offers.

Customers are more likely to act on offers tailored directly to them, thus increasing a retailer’s ROI. This information then feeds back to CPG companies, who can see how customers are interacting with (and purchasing) their products.

AI allows for real-time success measurement

Retailers and CPG companies can use advanced analytics platforms to analyze campaigns and advertising spending in real-time.

Companies can know if their campaigns are meeting customer expectations, and they can make adjustments as needed. This saves otherwise wasted money, and it enables them to redirect their spending to more lucrative efforts.

AI and ML can also help retailers and CPG companies understand potential outcomes for different scenarios. In the past, these companies had to rely on industry reports, which didn’t take into consideration their distinct data and unique circumstances. But today, companies can contextualize their singular performance in overarching trends.

Finding the right platform to leverage AI and ML

Retailers and CPG companies must work together to improve trade promotion success. It’s also important to note that not all advanced analytics platforms are the same, and their data source compatibility, forecast accuracy and demand signal capabilities can vary greatly. 

Consequently, retailers and CPG companies should work in tandem when selecting this mutually beneficial tool, and we recommend asking the following questions when choosing a platform:

  • What types of data sources does the platform accept?
  • Can the platform be used without relying on specialized personnel (e.g., data scientists)?
  • Can the platform run what-if scenarios and compare them against each other?

These companies should also work together when selling their leadership on the benefits of an advanced analytics platform.

Nowadays, there’s a common misconceptions that trade promotion activities are executed exclusively between retailers and CPG companies, meaning the customer has no say. In reality, the insights data affords—including consumer sales—are the true enablers of maximizing profits and sales. 

Coordination between a retailer and CPG company may seem difficult, but this is an effort worth undertaking. Properly leveraging AI and ML results in more effective trade promotion campaigns, and thus a better, more consistent ROI will ensue for the two. After all, it’s those that collaborate and improvise most effectively that prevail.


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