Trade smart case studies
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What are you getting in return for "the cost of doing business" padding retailer margins with your Trade dollars? Let my team help you achieve WIN/WIN promotions between you and your retail partners.
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Trade smart case studies
- 1. Presented by Kristy Garrey kgarrey@relationalsolutions.com 440-899-3296 x231 TradeSmart Case Studies EPIC Returns aren’t just for the king!
- 2. Goals for Today 1. Define Data Repository Challenges of Current State Benefits of Ideal State 2. Review TradeSmart Architecture 3. Case Studies
- 3. Is this your data repository? “We’ve got that” Analysts can go get what they need Has anyone seen the Wal-Mart sales I saved from last year? Have you downloaded the item master lately? When is the latest IRI/AC Nielsen data through? Have the sales folks added any promotions? Have the shipments been reconciled in the system yet for last month? Has purchasing updated the costs since the last raw materials price increase? Did Kroger run that promotion as planned? I heard there may have been a truck delay getting the order to their DC. How many selling units of that item were on that display? Whose calendar should we use for this? (Corporate, retailers, syndicated data provider…) It’s on the “shared drive” How much time do you spend playing “data detective”? Who’s data/analysis is correct?
- 4. Gather all the pieces…. Are your Analysts bringing insights or delivering reports? How many pieces of information are required to put ONE report together? How long does it take to get each piece of information? What does the data tell you? When questions arise outside of regular reporting, can you answer them? How long does it take to answer one off questions? Does your sales team go “rogue” and make gut decisions because they data cannot be compiled in time? How much money does your company spend on data acquisition? What business decisions are you able to make with the data? How are you using data to drive sales growth or profitability for your company? What’s driving this? Can you get all the information before the “timer” goes off?
- 5. Military, Distributor Budget Nielsen, IRI, TD Linx, etc. Promotions Forecasts Reports Scheduled Shipments Sources Retailers WalMart Food Lion Costco Kroger/DunH Home Depot Sam’s Distributors POSmartIntegrate, Validate, Synchronize & Manage BlueSky Or Other BI Tool Can feed other systems POS Integrator BIS EDI, Text, Retail Link, POL, WorkBench SAP, JDE, DB2, Oracle, JDA Users access via web 3rd Party Data: AC Nielsen/IRI Spectra/NPD Forecast Shipments, Promo, Vendor TradeSmart POSmart An Enterprise Architecture
- 6. Incremental approach leads to overall data consistency A staging area is required to cross reference, integrate and synchronize data Star Schema’s are required for certain databases Architect before loading cubes Business rules are defined & agreed upon Single source of information – The truth database Knowing what a sound architecture is Architecture Fundamentals Property of Relational Solutions, Inc.
- 7. Automated Harmonization & Integration Dashboards & Analysis Plan Improvement Trade • Shipments • Products • Plans • Syndicated BlueSky & PromoPro • Planning Data • Shipments • Consumption • IRI • AC Nielsen • POS • Master Data • Forecast Data • COGS • Other Source Data Complex Source Data The Heavy Lifting is Done! Relational Solutions, Inc. Integration Engine TradeSmart • ROI • Lift • Margin & Contribution • Full Aligned & Accurate • Updated as data comes in – no latency • The TRUTH database!
- 8. Now that’s Trade Promotion Intelligence! The ability to leverage an enterprise architecture. Automation, integration and harmonization of various trade components The intersection of plans, shipments and consumption as it relates to trade promotions The ability to accurately analyze the outcomes of trade promotions and compare to planning expectations across all retail segments The ability to understand whether or not promotions were properly executed and the amount of retail compliance Leverages a common repository for all historical promotions which enables multi-year analysis/comparison of trade spend initiatives Offers the ability to feed results to other systems – planning, supply chain, predictive, merchandising, etc.
- 9. Rule-based system. Allows for a streamlined process where ROI calculation is consistent and accurate Process driven capabilities allowing visibility to non-compliant events Insight into planned spending to retail execution by event or product is visible up the hierarchy Use cost information to understand your true margins and contribution Provide visibility to historical pricing to protect against margin erosion Knowing “sell-through” and supply chain visibility by incorporating shipments How do you know if you have a Trade Intelligence system?
- 10. Fine Tune Your Promotions • Group Promo PG’s into Events • Create event at Retail • Realign Promo PG’s dates and Events • To align with sales • Override base and incremental by Event • Override base/incremental values when needed • Allocate Spend to Units • In order to not double count units sold, spend must assigned to units
- 11. TPI Accuracy Makes all the Difference Essential workflow interface to allow fine tuning of promotion alignment with shipments, plans and consumption.
- 12. Case Study 1 The Marketing Team has completed aligning all events and want to see which ones had the best ROI. The post promotion template report is needed to easily compare aligned events against each other. Relational Solutions, Inc.
- 13. - Displays each event with all KPIs - Allows for total retailer promotion review across categories - Allows for total category promotion review across Retailers Relational Solutions, Inc. BlueSky Post Promotion Analysis Template KPIs & Measures: Consumed Cases, BB/WW Case Rate, OI Case Rate, Pallet Rate, Scan Case Rate, BB/WW Charge, OI Charge, Pallet Charge, Scan Charge, Lump Sum, Total Spend, ASM, Expected Spend, BB/WW Cases Charged, OI Cases Charged, Pallet Cases Charged, Scan Cases Charged, Actual Promo Weeks, Average Wkly Base Cases, Non EDLP Base, Incremental Cases, Spend per Incr Case, Expected Spend per Incr Case, % Lift, Actual Promo Retail, Profit Margin, ROI, Original Estimated Qty, Retailer Profit Margin Dollars, ROI Dollars, Breakeven, Dead Net Unit, Case Pack, List Price, Incremental Eus, Spend per Incr EU, Spend per Consumed Case…….
- 14. Case Study 2 The Marketing Team would like to see which events had the best lift and achieved the best ROI. A report charting those two measures is needed to quickly visualize how lift and ROI are related. Relational Solutions, Inc.
- 15. - Understand what lift is needed to achieve positive ROI - View which events achieved the best lift - Identify quickly which events need to be looked into further Relational Solutions, Inc. BlueSky Lift % vs. ROI % Report These 3 promotions had no lift and only 1 had positive ROI. It appears that the Family Love Chicken and Rice 8 oz. promotions are not performing well. Further analysis will be required to make adjustments for the future.
- 16. Case Study 3 The Marketing Team has been given additional trade funds to use this year. They need to determine which retailer and promoted group would bring the best return on investing additional funds. The ROI Ranking Report is used to review all promotions executed to date and which ones could be repeated to drive sales. Relational Solutions, Inc.
- 17. - Rank promotions across time, retailer, and promoted group to find the best ROI. - Focus where to spend incremental trade funds to drive volume. Relational Solutions, Inc. BlueSky Post Promotion Analysis Template
- 18. Case Study 4 The Category Team is presenting its trade promotion results to the retailer and needs understand which promotions are working best and which ones need adjustments. A report with traffic lighting is needed to easily highlight areas of importance. Relational Solutions, Inc.
- 19. - Understand ROI for Manufacturer and Retailer - Know that Events are working for BOTH you and the customer. - Create Win-Win during JBPS (Joint Business Planning Sessions) with Retailers Relational Solutions, Inc. Winner for Retailer but not Supplier Winner for Supplier but not Retailer Which are our Win-Win promotions?
- 20. Case Study 5 Marketing would like to determine whether having a product on promotion cannibalizes other products in its category. To do so, a Bump Chart is required that depicts both Volume and Price. Relational Solutions, Inc.
- 21. - Understand if cannibalization is happening across Brands. - How does price impact volume? Buns are cannibalized when Biscuits are promoted. BUSINESS OBJECTIVE Post Event Bump Chart Relational Solutions, Inc.
- 22. Case Study 6 A Trade Marketing team is spending days and days just to produce reports that show how a few of their promotions are performing. They cannot get an accurate number because they cannot group events. They have coverage of only 10% and have no idea how the other 90% of promotions are actually working. Relational Solutions, Inc.
- 23. Event Alignment Report quickly identifies which promotions are effective. • Base Volume Plan is consistently lower than Actual, forecast needs to be adjusted to reflect more realistic sales projections. • Event in W/E 2-Jun came closest to hitting plan targets despite incremental plan being off by 15k units. • Overall Events are generating sales gains and positive ROI.
- 24. Case Study 7 A Trade Marketing team wants to evaluate how their promotions impact the Retailers Category sales. Promotions that are a win for the manufacturer but do not grow the Category will not be considered a win for the Retailer. A weekly trend report is needed. Relational Solutions, Inc.
- 25. BlueSky Category Share Report Mfg. Share increased WE 1/21/12 but total Category sales declined , not a win for Retailer - Trend dollar and volume share over 52/53 week period to see what effect your events have on Retailers Category sales.
- 26. Case Study 8 Marketing believes competitive activity is eroding their promotional performance. To evaluate if competitors are running promotions at the same time your promotions are running a Category activity report is needed. Relational Solutions, Inc.
- 27. In this example it appears that for several Events a competitor was running a promotion concurrently with your promotion, negatively impacting the results of your promotion. Measures: ACV, Actual Total Consumption Volume Units, Actual Share Units, Actual ROI w/o CMG, Actual Pre-Trade Incremental Profit, Actual Incremental Profit w Fixed Trade Spend, Actual Net Revenue Competitor Promotions Your Promotions BlueSky Category Activity Report - Visually track where planned and actual Events occur over 52/53 week period. - What tactics are planned? - Do competitors run activity in parallel? - How profitable is each Event?
- 28. What do we do now? Evaluate Your Needs What is your annual trade spend budget? What is your company’s commitment to improving trade spend ROI? How much time is spent today evaluating trade spend? What is your coverage? Start with a Roadmap
- 29. Start With a Roadmap Understand current methods Reporting, Data gathering, Number of users Experience of users, Consistency among teams on metrix Total number of promotions, Annual trade spend Historical data available? Level of granularity for data (consumer units or cases) Type of data available (plan, consumption, shipment, COGS) Do all departments speak the same language (Category Management/Sales/Finance/IT)? Do you speak the same language as your retail partners? Current PPA metrics used today How are they calculated How are they sourced (ie. ERP, Nielsen, IRI, DW, etc.) Reverse engineer metrics (disassemble and analyze components) What is current coverage “Gap Analysis” between current method and “best practices” Evaluate IT infrastructure DW, Databases supported, BI Tools, Environmental needs (Dev, Prod, etc) Staff skills and ability to manage PPA application Lay out steps and milestones to get to an integrated best practices solution Expected timeframe, Level of difficulty, Resources needed Expected ROI and payback period of application
- 30. Follow our Relational Solutions Training Blog http://www.relationalsolutions.com/blog Join Demand Signal Repository Institute Group on Watch our Training & Video’s on Relational Solutions Channel Follow POSmartBlueSky on Follow Relational Solutions on Like Relational Solutions on Contact Kristy Garrey 440-899-3296 x231 KGarrey@relationalsolutions.com Connect with Kristy on Stay Connected & Informed!
Editor's Notes
- Many consumer goods companies invest in a lot of data. Often times they will buy data because it is available and their customers may ask them to use it some day. The data is there, you get it, based on the cost of data acquisition you may even believe you’re getting too much. The issue is having that data in a usable and reliable format. The data comes in from so many different sources that it’s impossible to get the full value out of it. Most companies are using it just to produce the reports they need. They just don’t have the time to create new insights even though the data is there. Each data source provides information and potentially reports. But analysts spend an average of 80-90% of their time gathering and pulling together data. Inevitably, there are discrepancies in the reports and analysts are then stuck spending more time trying to figure out where the numbers came from. Not only is this a very tedious task but when people’s numbers don’t match, there is a lack of confidence in the data and rightfully so. It not only wastes the analysts time but it can also lead to costly and incorrect business decisions. On top of that since 90% of an analysts time is spent gathering, cleaning, integrating and justifying their reports. This is time that keeps analysts away from actually getting to analyze the data and gain new insights.
- The idea behind implementing an enterprise solution is to provide a significant ROI to the business. The longer it takes for people to get answers to questions, the greater the risk involved. Risks include losing sales, a retailer dropping you, making a costly wrong decision, providing inaccurate information, compensating the wrong sales rep, negotiating the wrong discount from a vendor, etc. There are countless issues with having too little or inaccurate information. It all costs the company money. If a decision needs to be made and all the accurate information has not yet been gathered, that doesn’t stop from the decision being made. Rather than having all the information necessary to make an accurate decision, they have to rely on hunch. There is a great deal of risk involved in making hunch based decisions
- It is important in any case to have the proper data architecture in place that will provide you with a structure to easily add new data as well as provide you with accurate & reliable data from all the necessary data sources from the onset. Companies need to consider competitors, the economy, the challenges & benefits. Depending on the initiative selected first, your requirements will vary. However, there are certain measures we recommend that create very fast & measurable ROI for both the retailer & CPG manufacturers. With raw material costs increasing, most companies have already cut costs in that area. Additionally, most companies have cut employee costs. The next highest area of spend for companies is Marketing & most companies cannot clearly identify which promotions are working & which aren’t. They also can’t clearly identify at which retailers they are working. Coverage is very low today. The bandwidth simply doesn’t exist for analysts to manually pull together all the needed information to learn about how all the retailers are doing for every promotion. For this reason, investment in integrating the right data will streamline this process. But certain data sources are required in order to determine what is working for both the retailer & CPG manufacturers. Providing information to users faster will give decision makers “fact based” decision capability. Not only will it reduce the risks associated with guessing, it will improve the accuracy of their decision. It will also increase employee productivity. Time once spent gathering information will now be spent analyzing the information and providing MORE information to decision makers. Analysts can actually analyze information rather than spend time gathering it. There will be more information available than ever before and users will have the ability to discover trends and information never before available to them.
- The TradeSmart Architectue leverages the Smart Solution Architecture. It brings in data from your trade planning along with shipments, consumption, master data, forecasts and cost of goods sold. It transforms all those sources into a common data type, aligns the data for internal reporting and retailer reporting and presents you with reports that show you how your promotions are performing. In addition, you’re able to create ad hoc queries and even compare promotions with historical programs.
- TradeSmart leverages the Smart Solution Architecture. It leverages the automation, integration and harmonization of various trade components required to accurately measure trade spend ROI It is a promotion automation and analytics solution that actually lets you start measuring promotion performance as the promotion is going on. It brings together promotion plans, shipments and consumption as it relates to trade promotions. The promotion plans may be in Excel or they may be coming from applications like SAP TPM or Demantra or even Siebel or Prescient. The ability to bring together plans with shipments and consumption is what gives TradeSmart the ability to accurately measure ROI for both the manufacturer as well as the retailer. It offers the ability to not only accurately, analyze the trade promotions but it also lets you compare planning expectations across all retail segments Users can understand whether promotions were properly executed along with retail compliance TradeSmart provides a common repository for all historical promotions, enabling multi-year analysis and comparison of trade spend initiatives In addition results from TradeSpend can be fed into other systems such as planning, supply chain, merchandising, and so on.
- Our TradeSmart application also offers an optional component called PromoPro. PromoPro offers event details like event start and end dates, products at the brand, sub-brand or item level, store banners and tactics. It basically lets you do things like group promoted product groups into events to create a single event at the retailer. It lets you realign promoted product group dates and event with sales. Users can override base and incremental values by event when they need to. They can also allocate spend to units in order to not double count units sold.
- Our PromoPro application allows the Marketing Analyst the ability to group and align promotional records into consumer facing events. This tool takes the heavy lifting off an analysts plate by visually bringing together sales, shipments, promotional records, and competitive activity into one screen. This enables the analyst to quickly make adjustments to promotional events like adjusting shipment and/or consumption window dates based on what happened as well as tweaking base volume where needed. Once promotional events have been aligned and managers have signed off on any adjustments, the data is committed and available in TradeSmart reporting.
- Once the Marketing team has aligned and committed promotional records the Post Promotion Analysis Report allows them to view all the KPIs for all committed events across time. All retailers and product groups can be viewed in one place and each event record will be marked as either EDLP or HiLo.
- This report shows an example of the type of information you would want to review for each event. Multiple years, promoted groups and events can be viewed in the same report. This can aide the analyst in identifying trends in product categories or retailers. Channels of trade can also be reviewed together to see if an offer worked better in the Drug Channel vs. Mass or Grocery. This report is the first step in the evaluation process to see if promotions worth repeating.
- This report shows lift vs ROI. There were three promotions that did not achieve any lift, two of those also did not have any ROI (one actually was negative), one had positive ROI however you most likely will not want to repeat these.
- This report shows all retailers and all promotions. Equivalized units are used to evaluate products of varying sizes fairly. The marketing analyst can select a promotion to run based on lift targets or ROI % desired. Another helpful metric is spend per incremental EU, the lower the value the less it cost to get volume lifts.
- This report shows an example of the type of information you would want to present at a joint business planning session with your retailers. The second column shows promotions that were positive for the manufacturer. The 4th column show performance of the promotions for the retailer. The first column shows KPI’s with up arrows that show the promotions that were both successful for the retailer as well as the manufacturer. These are obviously promotions worth repeating.
- We would like to thank you all for joining us today. We invite you to follow our Relational Solutions training blog by going to our website at relationalsolutions.com. We also suggest you join the Demand Signal Repository Institute on LinkedIn. You can also see more training video’s on our Relational Solutions, YouTube channel. We ask that you follow Relational Solutions and Janet on Twitter, LinkedIn and Facebook and connect with us on LinkedIN. You are also free to contact us via phone and email. Thanks again for joining us and we look forward to your participation next Wednesday!