This has impacted every aspect of the sector, including manufacturing, sourcing, distribution, sales, and all the stakeholders in the value chain. Consumers, retailers, employees, and suppliers have shifted their expectations and demands.
Data-powered digital platforms have changed the typical consumer purchase journey from a linear path towards in-store purchases to a non-linear flow where every digital touchpoint is a potential point of pre-order or purchase, and every physical touchpoint a potential point of fulfilment.
In this new world, the point of engagement is the new moment of truth. However, most trade-promotion optimization (TPO) solutions do not extend that far up the funnel. This is seen in social media commerce platforms, quick commerce players, super apps, online marketplaces, and marquee retail events like Black Friday or Singles day. This is also shown in the fact that, depending on the product category, up to 50 percent of consumer journeys in the US start on Amazon. This includes checking out reviews and getting a benchmark on price and on how soon something can be delivered.
In today’s retail environment, debate is no longer needed on whether an investment goes above the line into an advertising campaign or below the line into a trade promotion. Instead, advertising and promotion spend needs to be joined up across the whole funnel. Marketing and sales and supply chain need to jointly own key metrics like customer acquisition, conversion, and availability.
Fortunately, a new breed of intelligent trade promotion and optimization tools may hold the answers suppliers need to survive and get ahead in the game.
Simplifying a complex ecosystem
TPO and traditional Trade Promotion Management (TPM) tools often struggle to provide the flexibility and access to data suppliers need to overcome the challenges of today’s connected commerce environment. This is due to their inherent shortcomings, like an inability to identify interrelated levers, relevant industry trends, external forces, and biased interpretation of historical data.
In contrast, new AI-driven tools are emerging that deliver powerful insights to front-line decision-makers, giving them a much-needed leg up to deal with complex non-linear consumer purchase journeys.
For example, generative AI can structure large amounts of data from different sources and combine it in a user-friendly way, solving the needle-in-a-haystack problem of “I know what data I need, I just can’t find it.” It also can connect information in novel ways across the whole funnel to present fresh insight or possibilities: “This is the data I didn’t know I needed.”
Such AI-driven tools can also codify best practices and expertise and deliver them to the point of need in real-time. This ability to empower frontline teams is potentially game-changing, helping less experienced sales and marketing professionals improve and organizations compensate for the decline in institutional knowledge following the “great resignation” of more experienced practitioners during or after the pandemic.
These new tools can generate promotion scenarios within the consumer journey, linking content with commerce and tracking acquisition costs to purchase behaviors. They excel at showing both positive and negative outcomes without bias, helping track the impact on customer lifetime value.
The benefits of such advanced AI-powered trade promotion management and optimization solutions include:
- Creation of clean customized promotional strategies for emerging retail channels based on unique data-powered advantages, rather than cut-and-paste untargeted promotional mechanics and norms from existing bricks-and-clicks channels
- Reduction in the numbers of little Excel “monsters” residing on the laptops of sales managers and marketers, allowing the sales teams to spend less time on manual data wrangling and more on testing creative scenarios and increasing strategy effectiveness
- Empowerment of younger account managers with expert-level guidance and training via AI models, reducing execution errors due to inexperience
- Greater consistency and impact, giving global suppliers standardized yet tailored solutions that will work across all trade structures and maturities cost effectively, thereby opening new regions for growth while adding trade investment discipline
- Greater cross-functional collaboration via an integrated single source of truth for promotional data and scenarios
- Elimination of “Red Sales,” those derived from promotions outside of revenue-management guidelines, at source, which preempt wasted investments on suboptimal or unprofitable promotions by surfacing unbiased best- and worst-case scenarios for decision-making
- Continuous learning from performance that makes the tool smarter over time, improving hit rates and constantly adapting to changing promotional environments.
Capgemini’s Solution
Capgemini developed a Microsoft cloud accelerated trade promotion management and optimization tool supercharged with Azure OpenAI, Azure Cognitive Services, Microsoft Data Platform, and various Azure enterprise integration technologies. This solution covers the entire marketing funnel, is user-friendly, provides insights for real-time decision-making, and can be applied across different channels and platforms.
A modern web interface assists sales and marketing professionals by integrating customer data provided by users, external data on market trends and consumer behavior, along with parameters such as specific retailers, regions, and products. This enables them to query the data and generate comprehensive analyses and insights, highlighting optimal promotion scenarios. Generative AI makes this solution accessible to a variety of roles, ranging from seasoned marketers to newer team members.
Connected commerce models and non-linear consumer journeys will remain a key dynamic for the foreseeable future, as retailers and suppliers seek the right mix of pricing, product offerings, and channels to bolster shrinking margins while delivering value to consumers with evolving demands. Please contact us to learn more about our connected commerce solutions or to understand how you can benefit from AI-powered trade promotion optimization in the cloud.
