TradeInsight Predicts Key Forces to Shape 2012

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Everything from the consumer’s “Smart Living” shopping behavior and growth in the natural and organic space to new best practices in trade promotions will be key forces in shaping the Consumer Packaged Goods industry and the world of Trade Promotion Management.

Sell More. Spend Smarter.

As a global provider and thought leader in Trade Promotion Management (TPM) solutions, TradeInsight reveals its Consumer Packaged Goods (CPG) industry predictions for 2012 and recaps the top trends that emerged in 2011. In this New Year, everything from the consumer’s “Smart Living” shopping behavior and growth in the natural and organic space to new best practices in trade promotions will be key forces in shaping the industry and the world of TPM.

Experts from TradeInsight hosted an educational webinar for CPG professionals to recap the current state of the industry and share insights on what’s to come. According to TradeInsight, the core trends of 2011 will play a role in the 2012 planning strategies and buying tactics for each member of the supply chain in order to gain shelf space, profits, trade spend visibility and more value at the checkout. The Trade Promotion Insights: 2011 Trends and 2012 Predictions webinar presentation is now available for download, along with a complimentary Whitepaper on the topic.

The following are key highlights, trends and predictions discussed during the presentation.

TOP TRENDS of 2011
Consumers have adopted “Smart Living.” Consumers are well groomed by the 2007 recession and 90 percent will continue to spend cautiously in 2012. Many of today's consumers have changed their approach to shopping and adopted a lifestyle of “smart living.” Consumers are making better, more informed choices based upon health, sustainability and the environment. Given the current economic conditions, the consumer is constantly evaluating options, making trade-offs and showing less loyalty to a single brand. With the growth of social media, digital marketing and smartphones, consumers have access to a surplus of information allowing purchases to be planned in advance to obtain the best value.

Retailers want to “own” the relationship with consumers. Due to the change in buying and shopping habits, retailers are focused on improving their understanding of today’s consumer. Retailers are trying to establish a better relationship with its customers by improving the in-store experience and meeting the consumer’s changing needs. This includes stocking higher-quality private label products, more natural and organic items and a greater number of local offerings. Loyalty programs will remain an important technique to maintain a 1:1 marketing relationship with consumers and gain in-depth shopper insights on Baby Boomers and the younger generations.

Manufacturers need better tools to deal with the complex “trade off” environment. Many Manufacturers spent much of 2011 focused on improving productivity and Trade Promotion Management efficiencies across the supply chain. The biggest impediment is the tools being utilized to manage trade spend, which for most CPG companies is the second largest expense behind the cost of goods sold. Software-as-a-Service (SaaS) trade spend solutions did gain traction for its quick implementation, low-cost and high ROI capabilities. However, homegrown tools to track trade spend and promotion effectiveness are still being utilized despite the fact that many manufacturers are dissatisfied with the accuracy of data and the ability to plan and forecast. Manufacturers will continue to seek solutions that provide better visibility from the warehouse dock to the consumer’s basket in order to determine if a promotion is truly working or not.

PREDICTIONS FOR 2012
Ways to strike a balance between private label and national brand products. Private label is an important strategy for Retailers and most are trying to determine its optimum level by keeping both manufacturer and consumer needs in mind. Expect retailers to work diligently to find the “right” balance between private label offerings and national brands. As of November 2011, store brands accounted for 31.4 percent of the 14,400 new food and beverage items introduced in the U.S. last year. That's double the share in 2010 and up from just 8.7 percent in 2009.

Natural and organic products will grow in conventional grocery stores. Natural and organic products have gone mainstream. An aging population means that grocery store shelves will be increasingly lined with foods that come with added health claims, while younger consumers with food intolerances will drive demand for gluten and dairy-free foods. The natural and organic product category is expected to immerse itself into conventional grocery outlets in 2012, while offerings will continue to grow online and in specialty stores.

Adoption of trade promotion management best practices will increase as budgets remain flat. For Retailers and Manufacturers to gain a competitive advantage in 2012, marketing and trade promotion must become integrated. Each player must find a way to become very visible throughout the consumer’s new process of planning ahead and real-time shopping research. Timely and accurate information about production, sales and promotion effectiveness will be more critical. Determining how to take TPM efforts to the next level and obtaining a true understanding of the profitability of trade promotion activity will be important.

About TradeInsight
TradeInsight, a global provider and thought leader in Trade Promotion Management (TPM) solutions, is the only TPM software application in the marketplace that provides visibility of spending from the warehouse dock to the consumer. Founded in 1983, the company gives Consumer Packaged Goods manufacturers the power to integrate TPM into existing sales and marketing accounting systems to better track trade spend performance across the entire supply chain. TradeInsight’s low cost Software-as-a-Service (SaaS) application can be deployed in a matter of weeks not months with no upfront fees and a proven return on investment within the first year. To learn how to sell more and spend smarter, visit http://www.TradeInsight.com, call 800.463.6634 or browse TradeInsight’s online resource library of whitepapers, webinars and industry-related articles. Connect with TradeInsight on LinkedIn, follow the company on Twitter and become a fan on Facebook.

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Jamie Maier
TradeInsight
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