As a consumer products company, how effectively can you currently plan and execute mutually profitable trade promotions and customer plans with retailers? If there’s considerable room for improvement, you’re not alone.
SAP is taking its trade management solution to the next level by focusing on collaboration and joining forces with Ruum by SAP, the poster child of the SAP.iO Venture Studio, the company’s internal startup incubator.
The good news is the size of the prize is substantial: The typical consumer products company sees significant improvements across trade spend efficiency, lower deductions, and reduced inventory with a holistic trade solution.
According to a 2016 survey of consumer products companies conducted by the Promotion Optimization Institute (POI), 79 percent of companies are not satisfied with their ability to manage promotions — nor should they be. The typical trade promotion loses money, erodes baseline volume, and fails to account for the retailer’s own business objectives. And yet it is typically the No. 2 item in a P&L and consumes 25 percent or more of revenue.
Given their limitations, traditional trade management technologies are often used simply as a “checkbook” for tracking trade spend, not for collaborating as a team to improve business. As POI points out, the gaps in system functionality in areas such as collaboration, reporting, and analytics force consumer products companies to manage many core trade promotion activities using manual spreadsheets, e-mail, and other relics of the past.
Sound familiar? Then it’s time to rethink your entire trade management business process, with an eye toward:
- Owning the entire P&L for each customer, prioritizing investments and opportunities to help them unleash long-term growth, customer value, and profitability – not just short-term results.
- Transforming your relationship with retailers from a promotions manager to a trusted advisor who collaborates with them to build plans for customer-specific categories and KPIs that drive return on relationship.
- Expanding the conversation, for example, by considering marketing campaigns, finance, and supply chain as part of a holistic customer plan for all volume – to improve purchase consideration, frequency, loyalty, penetration, and more.
- Performing joint, post-event analysis to see what was profitable, what wasn’t, and how and what to change going forward to improve results.
The good news is that new trade management technologies are now available to support more holistic, collaborative trade management processes that are far more effective. These solutions enable new ways of working, collaborating, analyzing, and planning that truly revolutionize trade management.
The SAP Trade Management solution provides users with a system of records for the end-to-end business process for customer plans, trade promotions, funds, and claims. The product provides revolutionary capabilities, and still many topics and a lot of collaboration happens outside of the system. In SAP Trade Management processes, there is significant collaboration happening internally, where people are working on many smaller side projects to improve business.
There is equally a lot of collaboration between a consumer products company and their distribution channels. We have seen scary e-mail chains going back and forth 10 times and more between consumer products companies and retailers clarifying and debating about promotions, invoices, deductions, and many other topics that demand collaboration and communication.
Improved Collaboration with Ruum by SAP
There are a lot of little projects in people’s daily business, such as new products, pricing changes, listing changes, promotion opportunities, and many more occasions. All of them require a significant amount of collaboration, both internally and with others outside one’s own four company walls.
As essential as collaboration and side projects are, this can lead to a huge disconnect between the system of record and where the “work” happens during the process until the status to enter the record into the system is reached.
Trade management efficiency and people effectiveness benefit from this connection in multiple ways. For example, think about product replacements during the year, new item introductions, or any other assortment changes. These things happen all the time and they require collaboration between people that happens ad-hoc as something needs to be done. However, they actually follow a similar process, require similar information and data exchange with multiple dependencies that need to be managed – like a “real” project. In the daily business, these mini projects have friends that all come to the party at the same time.
Imagine you could leverage predefined templates for these side projects, taking the context of your customer plan and your assortment, have a structured activity plan and action list — aka cheat sheet — supported by a personal project manager. Ruum’s personal project manager leverages machine learning technology to collect, group, and prioritize notifications, so people do not need to permanently keep track of 20 side projects that they may be dealing with along with 100s of e-mails flooding their inbox.
With all the collaboration required for effective trade management, Ruum by SAP is the perfect addition to boost your team’s productivity. And users can complete tasks and keep the work rolling from any place via e-mail, SMS, Slack, and others.
SAP.iO was established to grow a generation of revolutionary software business in the SAP ecosystem. The program helps innovators inside and outside of SAP build products, find customers, and change industries. The SAP.iO Fund and SAP.iO Foundries invest in external early stage enterprise software startups that strategically expand the SAP ecosystem and create value for customers. The SAP.iO Venture Studio mines the extraordinary talent and unique assets internally to launch new ventures that tap into SAP data, technologies, and customer relationships to enable customers to solve massive business problems.
Timo Wagenblatt is global vice president of Product Management for SAP Innovative Business Solutions.
Michael Carr is chief product owner for SAP Trade Management.