Analytics Driven Optimization Starts with a Hike Through the Data Weeds

Topics: Analytics, Optimization

Data. It’s everywhere. CPG companies collect it, pay for it, cleanse it and analyze it. But the question remains, how effectively are we using it?

There is a fine line between gaining visibility to data and harnessing the power of data to make a quantified difference to your company. CPG companies are in a position to take advantage of the unlimited opportunity that comes with data-driven practices, but need to have the business processes and systems in place to maximize the return.


According to Deloitte’s 2016 Tech Trends for Consumer Products Report, “Many data efforts are descriptive and diagnostic in nature, focusing primarily on what happened and why things happened the way they did.” In the world of trade promotions and trade marketing, the necessity of descriptive post-event analysis that can measure quantifiable ROI and KPIs for promotional events continues to evolve. As such, the performance, health and trend analysis that can be monitored plays a more significant role in trade departments abilideloitte1.jpgty to align with strategic initiatives.

However, the ability to see how trade promotion performance aligns with and is affecting business performance, is only part of the picture. “The way businesses should operate in today’s data-rich world is to acquire the data first, and then figure out what they may be able to do with it,” encourages the Deloitte report.

Data analytics without the ability to use insight as part of an analytics strategy driving change leaves companies short of achieving optimal results. In this way, many organizations can see the peak of the mountain, but lack the proper equipment to reach the summit.


“Predictive analytics broadens the approach by answering the next obvious question - “what is going to happen?” Likewise, prescriptive analytics takes it one step further by helping decision makers answer the ultimate strategic question: ‘What should I do?’”

The Delodeloitte2.jpgitte report points out an important distinction as companies shift from having data to using their data – predictive vs. prescriptive. Again, the difference comes in determining what you can and want to do with your data.

With predictive analytics the power to apply data insight to  empowers organizations to see projected revenue, profit and volume for both manufacturer and retailer is readily available eliminating much of the guess work of current planning practices. Furthermore, the ability to answer the question, “what if”, becomes a best practice encouraging trade marketing and sales to work collaboratively to build the best plans.


Taking this a step further, prescriptive analytics allows organizations to harness the power of technology to determine the optimal situation to get the desired results. This is true Trade Promotion Optimization as data insights inform user-defined constraint-based modeling to build an optimized event, mix of events, customer plan, annual plan and more. In doing so, organizations can not only optimize plans for revenue, volume and profit, but also begin to look at molding forward sustainable growth to promotions performance and the base. This powerful capability shifts trade promotions from a budgetary necessary evil to a revenue management catalyst.

On your marks…

There is no question that there is great emphasis on using data in CPG organizations. The Deloitte report indicates that “59 percent of [executive survey respondents] participants either included data and analytics among the top five issues or considered it the single most important way to achieve a competitive advantage.” However, the readiness that organizations have to implement these changes widely varies.big-data-1086802_960_720.jpg

“Where we should be seeing systemic capabilities, sustained programs, and focused innovation efforts, we see instead one-off studies, toe-in-the-water projects, and exploratory investments.”

This lack of commitment means that organizations will not see the measurable results from their analytics initiatives and as a result will become even more reluctant to adopt these changes. It is through relationships that bring together the technological functionality, industry expertise and respect for the change-management process that will ensure the greatest long-term success.

“By “industrializing” analytics in this way, companies can finally lay the foundation for an insight-driven organization that has the vision, underlying technology capabilities, and operating scale necessary to take advantage of data’s full potential.”

Or else, you become susceptible to trying to run before you crawl and will inevitably end up embarrassingly tripping on your own feet.

T-Pro Solutions, with its T-Pro Analytics predictive analytics and post promotion analysis solution, empowers CPG manufacturers to take control and maximize the return of their promotion investment.
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