How to drive profitable growth and relieve Revenue Growth Management (RGM) directors from decision fatigue

VIDEO

Consumer behavior has changed dramatically in recent years, making it increasingly complex to identify the right actions to capture their attention. Emotional engagement has become crucial, with shoppers favoring brands that reduce decision fatigue and enhance satisfaction. Consumer Products companies must rethink and recombine Revenue Growth Management (RGM) levers to meet these new expectations and reel in profitable growth.

Baiting the hook with price and perceived value

Ranking the variables that drive shopper choice is challenging, but identifying the correlation between product prices and perceived value is paramount. While overall market volumes are down, premium products are still making a splash. Why? When a product meets a shopper’s needs, there is still room to gain market share without resorting to competing primarily on value.

Casting smarter promotions

Fishing with the wrong bait won’t get results; the same goes for promotions. Promotions present a valuable opportunity to align with evolving shopper behaviors. It’s about capturing attention and influencing purchase decisions by tailoring promotional strategies to how consumers are now shopping. For example, shoppers buy less volume but make more store trips. This suggests two things:

1. Shoppers spend more time in stores, which provides more opportunities to communicate and explain products' value propositions. Linking the value-price balance with in-store activities can highlight this value.
2. Increased shopper presence in stores offers more opportunities to influence them with promotional tactics that enhance visibility, such as displays, hostesses, or gondola end caps.

Tightening the line on product assortment

Too many SKUs? That’s like tossing out too many lines and scaring off the fish. Streamline your product portfolio to highlight core products that meet shopper needs. With the right promotions and in-store communication, there’s no benefit in cluttering shelves with excess items just to fill white spaces-doing so can distract from the products that truly drive sales.

Avoiding decision fatigue in murky waters

Today’s RGM Directors are navigating stormy conditions—endless data points, constant market shifts and rising costs—not to mention trying to align pricing, promotions and assortment for online and in-store shoppers.

Creating value for shoppers and consumers means differentiating and personalizing products based on segmented needs, potentially down to the individual shopper. Revising promotional strategies involves understanding the new effectiveness of promotional tactics and renewing long-established promotional calendars. How can you position new tactics quickly and with optimal benefits for the entire category? 

Simplifying the product portfolio to focus on the highest-performing items means clearly understanding the incrementality of each item in the assortment to ensure no irreplaceable products are removed from the shopping lists of relevant shopper clusters.

AI helps you find the fish–better processes help you catch them

How can RGM Directors set strategies without falling into decision fatigue and making poor choices? Without the right tools, getting caught in the weeds is easy. That’s where predictive and generative AI becomes your sonar to achieve RGM:

• Online channel monitoring: Combining data crawling and AI capabilities allows you to capture important trends in prices and promotions on the online channel, anticipate competitor and retailer moves, and provide clarity on the best actions in that channel.
• Promotional effectiveness: AI helps combine data from heterogeneous sources related to sell-in, sell-out, and shopper behavior. Machine Learning identifies the ROI of different promotional tactics and suggests the best allocation of promotional budgets among clients, products, and time.
• Assortment optimization: Data harmonization and ML algorithms determine which products have transferable and non-transferable sales, helping to simplify the assortment and reduce costs without losing sales and margins, from both brand and category standpoints.
• Price optimization: Crawling capabilities enrich price optimization with competitor information and consumer sentiment, enabling scenario analysis based on competitive pricing and value-based strategies, not just a cost-plus strategy.
• AI assistants: Generative AI and AI assistants provide easy, quick, and efficient access to these capabilities, dramatically reducing time spent on manual activities and identifying the best use of trade funds.

The market may be choppy, but the companies that embrace technology today will be tomorrow’s top anglers – landing growth, loyalty and market share while others are still untangling their lines.