AMG Strategic Advisors Releases Findings from Study Analyzing Trade Promotion Effectiveness

CPG companies shifting trade promotion strategies, retailers evolving pricing tactics to respond to fundamental changes in shopper behaviors

JACKSONVILLE, Fla.--(BUSINESS WIRE)--AMG Strategic Advisors, the growth strategy unit of Acosta Sales & Marketing, a leading full-service sales and marketing agency in the consumer packaged goods (CPG) industry, has released the results from its trade promotion study, A Shift in the Lift: A Study of Key Factors Influencing Trade Promotion Effectiveness. The report analyzed key issues impacting today’s retail environment, including key insights into shopper behaviors, trends in CPG and retailer marketing and actionable tips for creating an effective trade promotion strategy:

“buying less and sticking to a budget.”

• Shoppers are looking for everyday value
  • 67 percent of shoppers said they are “buying less and sticking to a budget.”
  • More than half (54 percent) of shoppers indicated they are buying fewer items on impulse – making it harder to get shoppers to purchase unplanned items.
  • 59 percent of shoppers indicated that more than half of their shopping basket is filled with items that are “on deal.”
  • Shoppers have become accustomed to buying products on promotion. In fact, 65 percent of shoppers said they “expect certain products to be on sale, and if they are not, they will wait until they are on sale to purchase.”
• Retailers continue to look for ways to drive profitability
  • It’s expected that over the next three years, nearly 75 percent of retailers will be either every day low price (EDLP) or some form of hybrid EDLP/high-low format.
  • 67 percent of retailers did more digital advertising in 2012 vs. 2011.
  • 46 percent of retailers are moving toward a more “clean floor” policy, limiting the available display space in stores for shippers and other displays.
• Manufacturers continue to seek strategies to maximize promotional spending
  • Shopper marketing is estimated to be 16 percent of total marketing spend.
  • 25 percent of manufacturers are shifting trade funds toward digital promotions.
  • 42 percent of manufacturers plan to spend more on long-term temporary price reductions (TPRs) to buy price down.

“Shopping behaviors have fundamentally changed and shoppers are making fewer impulse purchases – and often expecting to find their favorite items on promotion,” said Carrie Shea, President of AMG Strategic Advisors. “Because of this, trade promotion is no longer generating the same level of promotional lift as it has in the past, and manufacturers must shift their trade promotion strategies to become better aligned with the changing marketplace. We will see trade promotion strategy continue to evolve as manufacturers increasingly realize the benefits of shopper marketing programs, digital and social media investments across the path to purchase, and new behavioral economic strategies.”

This research was sourced from 35 retailers representing more than 80 percent all commodity volume (ACV) across the US. To access the full report, including best practices for how to implement a successful trade promotion strategy, visit www.acosta.com/hottopicreports.

About AMG Strategic Advisors

AMG Strategic Advisors is the growth strategy consulting unit of Acosta Sales & Marketing, assisting clients in accelerating profitable growth through insight-driven strategies and advanced analytics. Comprised of consultants with in-depth experience in marketing strategy, including experience at leading CPG manufacturers, AMG Strategic Advisors provides best-in-class strategy consulting, brand positioning, shopper and marketing insights, and data analysis. It collaborates with clients to drive multicultural and multigenerational growth on an individual project or on an outsourced services basis. For more information, visit www.acsota.com.