While the call for transformation is loud and clear, the process is still going slowly.
New Tools for the Trade
Yes, many CPGs continue to use spreadsheets. But others are on the forefront of innovation by exploring — and even investing in — some emerging technologies.
Artificial intelligence and machine learning are gaining the most attention as the panacea for just about every business need. But what about utilizing these new tools for TPM?
Machine learning is an important component powering Eversight’s experimentation algorithms, explains Moran. “Without ML, we wouldn’t be able to efficiently automate everything, from what new promotions to test, how to design experiments, test-stopping criteria and winner selection, etc.”
There even have been some early efforts to move trade planning to something that’s more “programmatic” in determining investments, similar to what’s taken place in the world of digital media buying. “This trend is mirrored by Amazon’s ‘Hands Off the Wheel’ initiatives [a move toward automated price negotiation and demand forecasting] and shows promise for a future world of integrated trade spending and loyalty that could be profoundly more effective,” he suggests.
Machine learning automatically analyzes large amounts of data using rule-based algorithms in order to find trends and patterns. If the underlying data points are messy, the results will also be messy. So it’s important for CPGs to first build a solid foundation of basic data and analytics best practices.
To date, a lot of AI activity has involved the use of ML in e-commerce, particularly for search analysis, product recommendations, promotions and analyzing consumer sentiment — actions that ultimately will enhance trade planning but don’t directly impact TPM.
When AI is applied directly to trade promotion activities, it could help improve timing, tracking and other aspects of the investment.What’s more, AI and analytics can also provide promotion-related insights for channel managers, category/brand managers and financial teams to allocate trade fund dollars more accurately.