For many consumer goods companies, trade promotions are the second-largest item on the P&L behind cost of goods sold. Trade spending has tripled globally during the past two decades and some experts predict it will soon reach 40% of annual sales and for many companies, exceed the cost of goods sold.
Trade promotions are a high priority expenditure for CPG and FMCG companies, while retailers run a hybrid EDLP (Everyday Low Price) & promotional approach. In this complex landscape few companies understand what they get in return for their promotional spend and how to optimise their processes. Many businesses suffer from ineffective trade management with promotional campaigns failing to provide the desired ROI and turning into wasted efforts.
Adding to the complexity is the widespread use of home-grown spreadsheets and manual manipulation of data, making it difficult (if not impossible) to optimise promotional plans in a way that maximises category growth and product penetration.
Understandably, the common practice is to take last year's plan and tweak it, without identifying ways to improve or optimise, and at times trying to force last year's plan to solve new problems.
To address this situation, we see many companies looking for software to digitalise their workflows and optimise their promotions. There are two main components to that process, and (despite many vendors' claims) they are not the same, and are rarely executed by the same software:
- Trade Promotion Management (TPM) systems
- Trade Promotion Optimization (TPO) systems
Trade Promotion Management (TPM) systems
For companies wanting to replace the home-grown spreadsheets and automate the labour-intensive processes for data loading and handling, customer planning and budgeting, TPM is usually the starting point.
TPM systems are used by a broad range of users (e.g. merchandisers, category teams, trade marketing, strategy and customer finance) for the transactional workflows associated with planning, managing (funding, budgeting and reconciling promotions) and monitoring promotional activities in a more streamlined manner.
Being transactional at its core and including basic analytics, the key intent is not to completely address the challenge of missed returns and wasted efforts on bad promotions, although TPM does play a role in the workflow from the perspective of collating, reconciling and visualising past performance results.
Trade Promotion Optimisation (TPO) systems
Trade promotions have the best potential to increase sales with data-driven strategies. An IDG survey showed some large global manufacturers making a move beyond the basic trade promotion management tools towards achieving trade promotion optimisation (TPO), defined as the ability to run what-if scenarios when planning promotional campaigns was “now one of the strongest desires among larger companies.”
Trade Promotion Optimisation (TPO) systems are sophisticated applications capable of advanced analytics (e.g. advanced price elasticity and cannibalisation modeling capabilities). TPO enables users to automate the exploration of a large number of what-if scenarios, and run optimisation algorithms across those promotional programs, whilst considering various constraints and objectives (e.g. trading terms constraints, market share objectives, promotional guardrails, supplier constraints, category growth objectives, etc.)
The table below provides a quick overview of the main functionalities of TPM and TPO systems:
A successful TPO implementation can deliver a range of benefits including:
- Reduced time and labour required for creating new promotional plans
- Improved returns from optimised promotional plans
- Increased market share
- Stronger manufacturer-retailer relationship
To perform their optimisation workflow, TPO systems extract data (both transactional data as well as promotional slotting boards) from TPM applications and then push back optimised promotion plans that deliver the right mix of category growth and sustainable share. Given the complexity of the business problem and the algorithmic techniques involved, it's important to note that no two deployments are the same. The algorithmic techniques are trained on each client’s data, and the various constraints/objectives used by the optimiser (e.g. trading terms constraints, market share objectives, etc.) are configured to each client’s needs.
Complexica's Promotional Campaign Manager (PCM) application combines some of the essential features of both TPM and TPO. PCM, with its predictive and optimisation capabilities, provides both practical decision support as well as tactical and strategic management of trade spend.
To explore how our software can improve your promotional planning process and optimise your trade spend, please contact us
Learn why Lion Drinks selected Complexica's Promotional Campaign Manager for AI-driven Trade Promotion Optimisation
Discover why Metcash selected Complexica's Promotional Campaign Manager (PCM) to manage and optimise promotional planning for its 2,700 retail stores
Contact
To schedule a demo or learn more about our software products, please contact us:
"Larry will be our digital expert that will enable our sales team and add that technological advantage that our competitors don't have."
Kerry Smith
CEO, PFD Foods
$1.6 billion in revenue 
"Lion is one of Australasia’s largest food and beverage companies, supplying various alcohol products to wholesalers and retailers, and running multiple and frequent trade promotions throughout the year. The creation of promotional plans is a complicated task that requires considerable expertise and effort, and is an area where improved decision-making has the potential to positively impact the sales growth of various Lion products and product categories. Given Complexica’s world-class prediction and optimisation capabilities, award-winning software applications, and significant customer base in the food and alcohol industry, we have selected Complexica as our vendor of choice for trade promotion optimisation."
Mark Powell
National Sales Director, Lion
"At Liquor Barons we have an entrepreneurial mindset and are proud of being proactive rather than reactive in our approach to delivering the best possible customer service, which includes our premier liquor loyalty program and consumer-driven marketing. Given Complexica’s expertise in the Liquor industry, and significant customer base on both the retail and supplier side, we chose Complexica's Promotional Campaign Manager for digitalizing our spreadsheet-based approach for promotion planning, range management, and supplier portal access, which in turn will lift the sophistication of our key marketing processes."
Richard Verney
Marketing Manager
Liquor Barons
"Dulux is a leading marketer and manufacturer of some of Australia’s most recognised paint brands. The Dulux Retail sales team manage a diverse portfolio of products and the execution of our sales and marketing activity within both large, medium and small format home improvement retail stores. We consistently challenge ourselves to innovate and grow and to create greater value for our customers and the end consumer. Given the rise and application of Artificial Intelligence in recent times, we have partnered with Complexica to help us identify the right insight at the right time to improve our focus, decision making, execution, and value creation."
Jay Bedford
National Retail Sales Manager
Dulux
"Following a successful proof-of-concept earlier this year, we have selected Complexica as our vendor of choice for standardizing and optimising our promotional planning activities. Complexica’s Promotional Campaign Manager will provide us with a cloud-based platform for automating and optimising promotional planning for more than 2,700 stores, leading to improved decision-making, promotional effectiveness, and financial outcomes for our retail stores."
Rod Pritchard
Interim CEO, Metcash - Australian Liquor Marketers
$3.4 billion in revenue 
"After evaluating a number of software applications and vendors available on the market, we have decided to partner with Complexica for sales force optimisation and automation. We have found Complexica’s applications to be best suited for our extensive SKU range and large set of customers, being capable of generating recommendations and insights without burdening our sales staff with endless data analysis and interpretation.
Aemel Nordin
Managing Director, Polyaire
"DuluxGroup is pleased to expand its relationship with Complexica, a valued strategic partner and supplier to our business. Complexica’s software will enable DuluxGroup to reduce the amount of time required to generate usable insights, increase our campaign automation capability, personalise our communications based on core metrics, and close the loop on sales results to optimise ongoing digital marketing activity."
James Jones
Group Head of CRM, DuluxGroup
"Instead of hiring hundreds of data scientists to churn through endless sets of data to provide PFD with customer-specific insights and personalised recommendations, Larry, the Digital Analyst® will serve up the answers we need, when we need them, on a fully automated basis without the time and manual processes typically associated with complex analytical tasks.”
Richard Cohen
CIO, PFD Foods
$1.6 billion in revenue 
"As a global innovator in the wine industry, Pernod Ricard Winemakers is always seeking ways to gain efficiencies and best practices across our operational sites. Given the rise of Artificial Intelligence and big data analytics in recent times, we have engaged Complexica to explore how we can achieve a best-in-class wine supply chain using their cloud-based software applications. The engagement is focused on Australia & New Zealand, with a view to expand globally."
Brett McKinnon
Global Operations Director, Pernod Ricard Winemakers
"70% - 80% of what we do is about promotional activity, promotional pricing -- essentially what we take to the marketplace. This is one of the most comprehensive, most complex, one of the most difficult aspect of our business to get right. With Complexica, we will be best in class - there will not be anybody in the market that can perform this task more effectively or more efficiently than we can."
Doug Misener
CEO, Liquor Marketing Group
1,400+ retail stores 
"The key thing that makes such a difference in working with Complexica is their focus on delivering the business benefits and outcomes of the project."
Doug Misener
CEO, Liquor Marketing Group
1,400+ retail stores
"Australia needs smart technology and people, and it has been a great experience for me to observe Complexica co-founders Zbigniew and Matt Michalewicz assemble great teams of people using their mathematical, logic, programming, and business skills to create world-beating products. They are leaders in taking our bright graduates and forging them into the businesses of the future."
Lewis Owens
Chairman of the Board, SA Water 
"Having known the team behind Complexica for some years ago now, I am struck by their ability to make the complex simple - to use data and all its possibilities for useful purpose. They bring real intelligence to AI and have an commercial approach to its application."
Andrew McEvoy
Managing Director, Fairfax Media - Digital 
"I have worked with the team at Complexica for a number of years and have found them professional, innovative and have appreciated their partnership approach to delivering solutions to complex problems."
Kelvin McGrath
CIO, Asciano 
“Working with Complexica to deliver Project Automate has been a true partnership from the initial stages of analysis of LMG’s existing processes and data handling, through scoping and development phase and onto delivery and process change adoption. The Complexica team have delivered considerable value at each stage and will continue to be a valued partner to LMG."
Gavin Saunders
CFO, Liquor Marketing Group
“Complexica’s Order Management System and Larry, the Digital Analyst will provide more than 300 Bunzl account managers with real-time analytics and insights, to empower decision making and enhanced support. This will create more time for our teams to enable them to see more customers each day and provide the Bunzl personalised experience.”
Kim Hetherington
CEO, Bunzl Australasia 
"The team behind Complexica develops software products that are at the cutting edge of science and technology, always focused on the opportunities to deliver a decisive competitive edge to business. It has always been a great experience collaborating with Matthew, Zbigniew and Co."
Mike Lomman
GM Demand Chain, Roy Hill Iron Ore 
"The innovations that the Complexica team are capable of continue to amaze me. They look at problems from the client side and use a unique approach to collaborating with and deeply understanding their customers challenges. This uniquely differentiates what they bring to market and how they deliver value to customers."
John Ansley
CIO, Toll Group 
"Rather than building out an internal analytics team to investigate and analyse countless data sets, we have partnered with Complexica to provide our sales reps with the answers they need, when they need them, on a fully automated basis. We are excited about the benefits that Larry, the Digital Analyst will deliver to our business.”
Peter Caughey
CEO, Coventry Group 
“Complexica’s Order Management System and Larry, the Digital Analyst will provide more than 300 Bunzl account managers with real-time analytics and insights, to empower decision making and enhanced support. This will create more time for our teams to enable them to see more customers each day and provide the Bunzl personalised experience.”
Kim Hetherington
CEO, Bunzl Australasia
"After an evaluation process and successful proof-of-concept in 2016, we have chosen to partner with Complexica to upgrade the technological capability of our in-field sales force. The next-generation Customer Opportunity Profiler provided by Complexica will serve as a key tool for sales staff to optimise their daily activities, personalise conversations and interactions with customers, and analyse data to generate actionable insights."
Stephen Mooney
Group Sales Capability Manager, DuluxGroup
$1.7 billion in revenue
"After evaluating a number of software systems available in the marketplace, we have ultimately selected Complexica as our vendor of choice for sales force automation and CRM. Given the large SKU range we carry and very long tail of customers we serve, Complexica’s applications are best suited to deal with this inherent complexity without burdening our staff with endless data entry."
Nick Carr
CEO, Haircaire Australia
Australia's largest distributor of haircare products
“Asahi Beverages is Australia’s largest brewer, supplying a leading portfolio to wholesalers and retailers, including some of Australia’s most iconic brands. Last year Asahi Beverages acquired Carlton & United Breweries, which is its Australian alcohol business division. To harness the strength of our expanded portfolio, we partner with our customers to run multiple and frequent trade promotions throughout the year, delivering long-term growth for both our business and theirs. Given the inherent complexity in optimising promotional plans and our continued focus on revenue and growth management, we have selected Complexica as our vendor of choice after a successful Proof-of-Concept of its world-class optimisation capabilities.”
Kellie Barnes
Group Chief Information Officer
Asahi Beverages
"Dulux is a leading marketer and manufacturer of some of Australia’s most recognised paint brands. The Dulux Retail sales team manage a diverse portfolio of products and the execution of our sales and marketing activity within both large, medium and small format home improvement retail stores. We consistently challenge ourselves to innovate and grow and to create greater value for our customers and the end consumer. Given the rise and application of Artificial Intelligence in recent times, we have partnered with Complexica to help us identify the right insight at the right time to improve our focus, decision making, execution, and value creation."
Jay Bedford
National Retail Sales Manager, DuluxGroup
"At Liquor Barons we have an entrepreneurial mindset and are proud of being proactive rather than reactive in our approach to delivering the best possible customer service, which includes our premier liquor loyalty program and consumer-driven marketing. Given Complexica’s expertise in the Liquor industry, and significant customer base on both the retail and supplier side, we chose Complexica's Promotional Campaign Manager for digitalizing our spreadsheet-based approach for promotion planning, range management, and supplier portal access, which in turn will lift the sophistication of our key marketing processes."
Richard Verney
Marketing Manager, Liquor Barons
