Blog: Unlocking the biggest profit growth opportunity in the CPG marketplace
Augmented decisions at scale with AI advanced analytics
Optimising promotional activity is the biggest profit growth opportunity for the CPG marketplace
• Promotions are part of the business environment, spend is huge but much of it is wasted and value-destroying — Nielsen estimate that 59% of global promotions do not break even.
• Companies should spend more on long term brand building but reducing promotional dependency is not easy — often quoted research from Les Binet and Peter Field says that companies should aim for 60/40 as the balance of brand building and activation, we know many companies where the ratio is more like 20/80. When you are on the promotional drug it’s difficult to get off.
- Retailers are changing their promotional strategies, with a greater focus on EDLP and cutting out multi-buys. This decreases promotional effectiveness and increases competition for the most valuable feature of real estate. This makes promotions even less profitable and leads to a race to the bottom on promotional discount.
The path to increasing promotional effectiveness and growing competitive advantage
• The good news is that data availability has increased dramatically, across the 3 v’s (volume, velocity, variety) — more data, provided more frequently and at a greater level of detail. This should enable the industry to optimise promotional performance at daily store-level granularity.
• The evolution of trade-spend decision making has shifted from what was once blind cheque writing and gut feel into agile analytics-driven decisions, which are often backed up by comprehensive econometric modelling.
• This evolution has the potential to empower manufacturers to take competitive advantage of data availability and advanced analytics.
• However, too often, we see companies not fully exploiting these opportunities because of lack of resource, limited decision-making time and promotional systems and processes that are not joined up.
AI has the key to making better promotional investment choices
• AI is rapidly emerging as the next level in improved commercial decision making, meeting the need for dynamic, always-on analytics, that continuously learn and grow in accuracy over time. Ensuring access to automated predictive analytics and scenario planning embedded into tools and processes to empower the right investment choices across your CPG or retail business.
• The technology removes the bias, limitations and reliance on personal experience that infect your decision making today — doing what you have always done is no longer an option.
- Leading companies that use this new technology will develop their customer relationships by providing analytics that help manage total category promotional strategy and grow category performance — these companies will become trusted category advisors.
An AI platform for augmented decisions considering all causal factors in real time
At Singular Intelligence, we believe that the adoption of AI techniques in promotional management and commercial decision making represents the biggest opportunity in the CPG marketplace. SI’s AI platform has been designed specifically for the Consumer Goods industry.
Offered as SaaS, our automated AI platform is already helping market leaders optimise their price and promotion strategy and in-flight execution, leading to significant performance improvements.
Steve Gladwell, Industry Director, Steve@singularintelligence.com
Nick Marr, Commercial Director, Nick@singularintelligence.com
Sarvesh Kumar, CEO & Founder, Sarvesh@singularintelligence.com
Singular Intelligence Limited, Level 39, One Canada Square, Canary Wharf London, E14 5AB, United Kingdom, www.singularintelligence.com, firstname.lastname@example.org