Convert shopper and market trend insight into strategic planning in Consumer Goods for Retail

There is an old saying in the Consumer Goods Industry: "Just run the SALY plan.” SALY is an acronym for Same As Last Year. But with everything that’s happened in the last few years, including the pandemic, supply chain disruptions, inflation and the omnichannel surge, the shopper has become savvier and thriftier. So, along with SALY, the old way of promoting products, must also evolve to create “shoppertunities.”

Shoppertunity involves maximizing shopper trends and converting these to sales at the specific moment where a purchase is likely to happen in both physical and virtual channels. CPGs must evolve to win the evolved shopper and market. Let's explore 3 key areas to focus on — joint business, omnichannel and promotions planning — and discuss strategies for success.

Call the paramedics to resuscitate the plan

1. Joint Business Planning (JBP). This is where “collaboration” replaces “negotiation” between manufacturers and retailers. Retailers, except for a few manufacturers who are category captains, have been monopolizing price and promotion strategies for decades. The idea of collaboration and splitting the cost of inflation along the price and promotion plan has always been one-sided. Now, the evolved shopper has threatened retail foot traffic creating new paths to other outlets. As inflationary pressures maintain their hold, it’s time to shift focus. Collaborative growth should be the retailer and the manufacturer's priority.
   
   
2. Omnichannel Planning & The Shopper Evolution. The extraordinary growth of online shopping was happening prior to the pandemic. The pandemic simply accelerated it. As the ecommerce channel continues to grow, it is becoming the hub for the “savvy shopper” because it provides an easier way to compare products. These shoppers traditionally looked for products of value and convenience, and now they are looking for products that align with their personality and morals – sustainability, organic ingredients and traceability. This shift creates a shoppertunity in the competitive arena for manufacturers where incremental volume is dramatically complex to build. The savvy shopper cannot be ignored by any manufacturers.
   
   
3. Promotion Planning & Shopper-centric Promotions. The shopper’s expectations of product marketing have created promotional pressure for retailers and manufacturers alike to deliver shopper-centric promotional strategies. A common belief in the industry is that manufacturers and retailers need to take advantage of technology and data to evolve their promotional strategy and address shopper-centric promotional planning – turning promotional spending into something more strategic than the same old types of shopper promotions is necessary. Manufacturers must address this and devote considerable resources to fund this and better understand how to proceed in a more profitable way.

So, what actions should be taken? 

The rescue plan 

1. Collaborate to define a Retailer-Specific Marketing and Joint Business Plan. Create analysis in your category to align marketing and business objectives for both the manufacturer and the retailer through a defined collaborative process. This analysis needs to include tailored marketing strategies and long-term plans that meet both parties’ goals, such as increasing sales, market share and profitability. This engagement will help CPG companies secure stronger partnerships, gain better shelf visibility and leverage co-branded marketing initiatives to drive mutual growth.
   
   
2. Realize that the shopper has evolved. You may not realize that some younger consumers are deprioritizing sustainability in their purchase decisions and have become less willing to pay a premium for sustainable products. In Europe and in the U.S., the percentage of young consumers willing to pay a premium for products with sustainability claims declined significantly across product categories. Among these consumers, only a very small percentage were willing to pay a premium for personal care and apparel products with sustainability claims.
   
   
3. Stop putting consumers in predefined — and often outdated — boxes. The industry needs to focus on and add non-traditional shopper data points to build a richer understanding of consumer preferences. This will require a drastic evolution, whereby consumer businesses use their consumer data to target specific microsegments of consumers who may demonstrate particular shopping behaviors or preferences.
   
   
4. Know how to influence consumers during their shopping journey. It’s about creating a compelling promotional experience that gets their attention, nurtures brand loyalty and ultimately, drives them to choose your product over your competitors’. This approach begins with implementing digital transformation that encompasses a large amount of data and analysis of a variety of tactics, both in-store and online, that work in tandem to influence purchase decisions. This helps brands stand out from the crowd and creates a connection at the precise moment consumers are making buying decisions.
   
   Digital transformation is often not handled with the same discipline as other areas in the organization due to the prevailing complacent theme, “If it’s not broken, don’t fix it.” This thinking can prevent needed change.  

To deliver this tall order, CPG manufacturers will have to complete a robust digital transformation. Historically, the CPG industry has fallen behind most major industries in digitalization. This comes as no surprise, since without direct data sources, it hasn’t experienced as much digital disruption as industries like financial services, high tech, medical and telecommunications. 

To create shoppertunities in 2025, manufacturers and retailers should start building organizational and technological capabilities to execute:

• Retailer-specific and joint business planning
• Omnichannel planning
• Shopper-centric promotional planning

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