Are your TPM limitations preventing you from being competitive? Take advantage of AI-driven TPO and Insights capabilities without replacing your legacy TPM
The battle for market share is no longer fought on the retail shelf; it's fought in the cloud with data and algorithms. The most formidable weapon isn't a bigger budget—it's a smarter strategy. A promotional "arms race" is underway, and a gap is widening between CPGs that leverage advanced trade promotion optimization and those that fall behind. Companies that fail to adapt are not just missing opportunities; they are at a severe competitive disadvantage, risking profitability and market share.
Before diving deeper, it's crucial to understand the central investment at stake. So, what is trade spend?
This investment, often the second-largest expense after the cost of goods sold, covers everything from discounts and slotting fees to in-store displays, all designed to incentivize retailers and influence consumer purchasing decisions.
Effective trade spend optimization is the primary goal for any competitive CPG company.
Three powerful forces are accelerating this new competitive reality:
The Rise of the Data-Rich Retailer: Retailers are no longer passive partners. Armed with granular, first-party shopper data, they come to negotiations demanding proof of a promotion's value from your trade spend. They can challenge plans with their own SKU-level performance metrics, putting unprepared CPGs on the defensive. The largest monetize the rich and vast amounts of purchase data connecting products and promotions to the ultimate sale.
Your Competitors are Leveling Up: Large CPGs are investing heavily in AI-driven digital platforms and analytical talent to optimize every dollar of their trade spend. This creates a significant competitive moat, as they can fund data-driven promotions with a scale and precision that others struggle to match. Technology is the key to level the playing field here, enabling small and medium CPGs to take advantage of their own data in similar ways.
The Deal-Driven Consumer: With brand loyalty waning, the modern consumer is actively chasing deals. An Acosta Shopper Survey found that 61% of shoppers are most influenced by promotions, forcing brands into a constant cycle of discounts simply to defend their position on the shelf.
For companies that haven't adapted their trade promotion management strategy, the cost of inaction is steep:
Flying Blind with Spreadsheets: A surprising number of organizations still manage multi-million dollar trade budgets with manual, error-prone spreadsheets. This outdated approach to trade promotion management lacks the real-time visibility and predictive power needed to compete.
The Vicious Cycle of Reactive Promotions: Without predictive analytics, companies are forced to react to competitor moves or simply run the SALY (Same as Last Year) plan. This leads to a defensive posture of unprofitable, margin-eroding promotions and represents a failure of trade spend optimization.
Losing at the Negotiating Table: When a CPG cannot provide data-backed scenarios that demonstrate mutual benefits, they lose leverage in retailer negotiations. As retailers use their own data as a powerful argument, CPGs without similar insights are left at a significant disadvantage, resulting in higher fees and a lower return on investment. When you can’t add value, all you have is your checkbook!
Many CPGs have made significant investments in foundational trade promotion management software. While these platforms are effective for managing budgets and executing the transactional side of promotions, including clearing deductions, many legacy TPMs lack the AI-powered engine required for strategic trade promotion optimization.
This creates a difficult trap. Companies feel locked into their existing TPM, but this system has become a form of technical debt. This technical debt is more than an IT issue; it's a strategic liability that hinders agility, prevents effective trade spend optimization, and anchors the company to inefficient processes. You are stuck efficiently managing transactions while your competitors are busy optimizing strategy.
While many companies desire a fresh start to get out from under legacy systems, sometimes that is simply not an option. TPM solutions are wired into the core of a company’s business operations, primarily the ERP system but may also be linked to demand planning and other systems. CPG companies with other technical debt or other priorities sometimes simply aren’t ready to tackle replacing legacy TPMs.
When this is the case, CPGs must find ways to layer strategic intelligence on top of their existing transactional systems, paying down their technical debt without starting from scratch.
CPGvision has built standard integrations that work with competitive trade promotion management software. This allows companies to connect our powerful TPO, RGM, and AI-analytics engine directly to their legacy TPM, creating an immediate strategic advantage.
This smarter workflow looks like this:
Your team continues to use your existing TPM for its core execution and financial functions.
Data flows seamlessly into the CPGvision analytics engine, where revenue growth managers and sales planners can analyze go-to-market strategy options, create targets and budgets from historical data and collaborate with Key Account Managers to set the AOP (annual operation plan).
Next, your Key Account Managers can leverage AI-driven "what-if" scenario planning to build and compare multiple promotion plans for true trade promotion optimization. They can also use CPGvision’s prescriptive optimization engine to allow the data and AI to make recommendations and expose the results clearly and transparently, allowing the user to control which recommendations are implemented.
Once the most profitable, optimized plan is identified, it is exported directly back to your legacy TPM for execution and financial reconciliation.
This integration bridge allows you to unlock sophisticated, AI-powered trade spend optimization capabilities immediately, without the cost, time, and risk of a full system migration. You can start competing on an analytical level today.
The competitive landscape has been permanently altered. Relying on outdated processes legacy systems is a strategy for being left behind.
Winning the new retail arms race isn't about outspending the competition—it's about out-thinking them. Don't let a legacy system dictate your future.
Contact us to learn how you can augment your current capabilities with CPGvision's analytics engine and turn your trade spend into your most powerful competitive weapon.
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