Over the last decade, the CPG industry has undergone a massive change, with businesses increasingly turning towards advanced technologies such as AI and ML for operational optimization, increasing brand awareness and enhancing product visibility. A survey conducted by the Promotion Optimization Institute (POI), detailed in the POI 2019 TPx and Retail Execution Report, revealed that 16.7 per cent (a 5.7 per cent increase as opposed to 2018) of consumer packaged goods (CPG) manufacturers have invested in artificial intelligence solutions to get an edge over their competitors. The fact that a majority of companies are actively working on incorporating AI-based tools indicates a growing cognizance of this technology’s transformative power.
However, a pertinent question still remains – how CPG players can run a profitable trade promotion given the industry’s complex and diverse nature by incorporating these technologies? While AI-based trade promotions are proven to be truly effective, companies may not achieve satisfactory results in the absence of a solid implementation strategy. Many enterprises tend to rely on AI solely, which is not always the way to go. AI, without a doubt, is a powerful technology that has higher cognitive as well as analytical capabilities than humans. But, the key is to combine AI with other AI-compatible tools and human knowledge to develop a comprehensive promotional strategy.
Harnessing the power of AI: How it is capable of changing the way CPG companies conduct trade promotions
The sales and marketing domains, for decades, have been entirely dependent on human efforts. However, with the influx of AI, companies can now leverage the vast amount of data generated from customers and utilize it to gain better insight into consumer behaviour, brand loyalty and current trends in the industry. Since CPG manufacturers often fail to make use of CRM data due to the lack of indispensable analytical tools, AI can enable businesses to not only integrate internal data sources but also make sense of raw, unstructured and real-time data. This is because AI has the ability to analyze data and churn out hidden information which a human salesperson won’t recognize.
Gathering and breakdown of consumer data
One of the key challenges faced by sales professionals and marketers in the CPG industry is the unavailability of data. As a result, they are forced to determine their promotional strategies based on the data gathered only from syndicated providers. This is where AI comes in; it provides business with access to unlimited sources of data. Moreover, artificial intelligence allows for data to be captured in a completely automated manner, taking the pressure off sales executives. Simultaneously, an AI-powered trade promotion software can retrieve data from the trade promotions conducted previously by the company to offer crucial insights.
Formulating effective trade promotions strategies
Apart from identifying the sales opportunities, artificial intelligence can also play a vital role in devising an effective trade promotion strategy that helps bring down the costs and increase profit margins. Additionally, CPG companies can make use of AI-driven predictive analytics tools to drive better outcomes and maximize the impact of their sales or marketing campaigns. This, in turn, can result in higher brand engagement and customer satisfaction.
Enhancing the performance of salespeople
Advanced AI platforms are not only capable of making trade promotion activities more efficient, but sales professionals as well. Be it during customer interactions when AI-based chatbots carry out a conversation or when providing valuable insights on how to execute a task effectually, sophisticated and intelligent software can augment the performance of sales personnel and marketing executives. Another major advantage is that AI platforms can work 24x7, adding to the value of an organization operating in a customer-centric industry like CPG.
The disruptive nature of AI has already been well-documented. When it comes to trade promotions, artificial intelligence solutions can truly help a business achieve its desired results. In fact, enterprises that combine human insights with AI-powered tools are more likely to differentiate themselves from their competitors in the future when complementary relationships between man and machines will be the norm.
-- Mr Imran Saeed, Director, Analytics at Absolutdata...