By Marcy Selva, Mike Tolkowsky & Eric Vanderschueren
Over the past 15 years, Revenue Growth Management, Net Price Realization, and Trade Investment Optimization have become top priorities for CPG businesses. In many cases Trade growth rates have surpassed top line growth while the benefits from Supply Chain transformations have not kept pace with omni-channel routes to market or genuine cost inflation. This has continued to squeeze P&Ls for profitable growth every year. In our fast-evolving omni-channel world, the need has never been greater for RGM skills & expertise to assess interdependent factors, develop strategic & tactical plans, and build sustainable capabilities.
Portfolio Assortment, Mix and Pricing: It is no longer good enough to simply model out an optimal assortment with the highest net prices to build a portfolio plan. The best retailer and CPG partnerships seek joint business plans with mutual value creation, solving for category growth, attractive margins, ease of execution and brand differentiation. Today’s omni-channel technologies with automated retailer price-matching bots have added a new dimension to pricing sensitivity, further complicating the need for retailer-specific selection. This now requires greater channel and retailer understanding with a more sophisticated approach to set cross-channel pricing strategy, pricing corridors and price-pack architecture.
Co-Shipping Requirements, Omni-Channel Fulfillment and Retailer Logistic Fines: Omni-channel supply chain capabilities, customer expectations and costs continue to change at a fast rate. Best practice RGM strategies and plans will evolve to meet agile retailer supply chain requirements. This includes addressing eCommerce packaging demands, minimizing logistics penalties for inefficient service, and anticipating cost impacts from expected shifts in omni-channel fulfillment approaches & innovation.
Promotion Management: Current retailer promotional price-matching policies coupled with evolving shopper behaviors require higher level analyses for promotion optimization to better understand consumer, customer, brand, and competitive impacts. This is especially relevant as retailers continue to expand their own promotional programs, suggesting a comprehensive promotion framework and evaluation approach with deep retailer insights.
Retailer Media Investments and Data Packages: Investment in sponsored ads has become a base requirement to play on most sites. Budgets have escalated as bids and traffic continue to accelerate with retailers exploring new ways to further monetize shopper data. Retailers such as Amazon and Walmart are also looking to tap into much larger brand awareness budgets with an increasing array of Display and Video ad offerings powered by their targeting data. These costs and benefits did not exist when RGM emerged but are now a required element of any RGM plan.
A solid Revenue Growth Management (RGM) strategy and well-executed plan can generate a multitude of retailer partnership benefits for category value and profit pool growth in the fast-changing omni-channel world.
Simpactful is a CPG and retail consultancy comprised not only of multi-functional brand experts, but world class retail practitioners who work together shoulder to shoulder with our clients to solve today’s business problems using best practices and insider insights from both sides of the desk. Our practitioners provide proven, intuitive and impactful omni channel solutions and capabilities to our clients. Our RGM team is staffed with Finance, Commercial, Trade Architecture, Planning, Supply Chain, Retailer, Media, Marketing and Omni-Channel experts with experience in benchmarking dozens of CPG companies and using modeling to building solutions for today’s realities. Interested in learning more about our RGM capabilities and team? Contact us today at firstname.lastname@example.org or 925-234-6394.