Blurring the Lines Between Trade and Consumer Marketing: Three Pillars for Success

Consumer packaged goods (CPG) businesses operate with finite resources to deploy on promoting their products, so what is the most effective and efficient way to allocate that budget?

Traditionally, the answer has been to keep trade and consumer marketing activities separate. Trade promotion teams worked with retail customers to secure mutually beneficial outcomes, aligning their brand, geographic and demographic strategies with promotion spending to hit targets such as increased footfall, greater basket size and improved margins. Meanwhile, consumer promotion teams focused on building brand, fostering loyalty and driving repeat business.

Separating the two activities worked well in the past, but the sector has changed in recent years. In an increasingly dynamic landscape, traditional brands are facing disruption from challenger brands, with no industry role models at scale to follow. As speed and agility is where the battle for growth will be lost or won, they need to evolve from incremental innovation and production to redesigning the industry through disruptive consumer relationship and channels.

And, with this in mind, the sector’s leaders regard the lines between trade and consumer marketing as ever more blurred – to a point where they are now beginning to disappear altogether.

Repelling the digital natives

Many of the most disruptive CPG challengers are digitally native, in that they launched their brands when digital shopping was already well-established. These firms are data-rich, harnessing crucial insight into who their customers are and what those customers think. They’re also relationship-focused, determined to build a personal rapport with the purchasers of their products.

Confronted by the rising threat from challenger brands, incumbent CPG firms might be tempted to dispense with trade promotion altogether – directing all their resources into an effort to build stronger consumer relationships via online shopping platforms. The smarter play, however, is to recognise the complementary nature of trade and consumer promotion and to adapt accordingly – to end the demarcation and focus on spending that simultaneously drives value from both retailers and consumers.

High stakes

The case for making this strategic decision is strong, but the stakes are high. CPG companies are facing unprecedented levels of disruption markets. As they reinvest 15% to 30% of revenues – and sometimes even more – to drive future growth through improving retailer performance and increasing consumer loyalty, they cannot afford a misstep. Greater alignment between trade and consumer promotion may be imperative, but it carries a risk of failure.

Towards holistic promotions

How, then, to mitigate this risk? How can CPG businesses bring together their trade and consumer marketing activities with the coherence and cut-through required to drive growth?

The answer lies in a multi-faceted approach to marketing and promotional strategy, supported by three main pillars:

Use technology to become a better listener

Today’s analytics technologies make it possible, for the first time, to understand in granular detail how consumers

and increased availability of data across channels and regions provides the inputs these tools require in order to deliver meaningful insight. And while rethinking people and process will inevitably be challenging, CPG companies that have been able to overcome cultural and organisational barriers are already reporting good results.

Moreover, CPG businesses that cannot move quickly in this direction risk being marginalised by the disruption sweeping through their industry. They will rapidly lose share of market to the digital natives now working so hard to build their own consumer relationships.

Conclusion: The time is nowAll is not lost for the incumbents. Those that can transform themselves into more connected and consumer-centred businesses, and to master omnichannel engagement, have time to re-energize their strategies. Those willing to invest in data-led technology will have access to the key enablers of stronger relationships with both retailers and consumers. And those determined to build agile organisations that balance the needs of the current marketplace with the likely demands of the future will harness innovation that drives growth.

Now, however, is the time to act. The twin-track approach to trade and consumer promotion is out of date. Instead, CPG businesses must develop systems, processes and teams that reflect the changing relationships between manufacturers, retailers and customers – and which can deliver a holistic strategy for driving growth.

think and what is driving their shopping behaviours. Such tools give CPG companies visibility of what individual consumers are saying about them on social media and enable far greater interaction with the buyers of their products. It is therefore possible to tailor product ranges accordingly and to fine-tune promotion activities to deliver more compelling and relevant campaigns.

Study the past to anticipate the future

Advances in technologies such as artificial intelligence and predictive analytics take much of the guess work out of promotional spending, offering clear insight on the likely future impact of specific activities and actions. Gathering data at point of sale, these tools identify key consumer shopping behaviours, analyse the effectiveness of promotions, merchandising and pricing, and assess the cannibalisation of related products. Used efficiently alongside trade promotion activities, they deliver more predictable results from marketing spending.

Reorganise teams and processes to underpin alignment

Trade and consumer marketing activities will remain separate unless the teams delivering those are taken out siloes and brought together. Integrated customer development teams that focus on all customers, rather than a narrow focus on retailers or consumers, will be able to deliver a more holistic approach to promotion, working together on the more integrated trade and consumer strategy that is now required.

The future is already hereThis new approach to trade and consumer promotion is not a vision of the distant future but an achievable reality right now for successful CPG companies.

The rise of platforms of capability enable businesses to plug in new tools as they need them. The greater depth

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Jason Murphy heads up the overall strategy for our software and product development within Consumer Goods & Services for our Accenture Cloud Solutions for Consumer Goods and Accenture CAS product lines, which include TPX and RE capabilities. In addition, Jason is leading Sales for Accenture Cloud Solutions for Consumer Goods in North America.

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Jason MurphySoftware Strategy & Development Lead Consumer Goods & Services