Empowering CPGs: Becoming the Smartest in the Room During Joint Business Planning

Brands of all sizes are involved in some level of joint business planning with their retailer partners — the bigger the brand, the higher the stakes are at the meeting. But, each brand is given a chance to make a case for their items, swing shelf space in their favor, collaborate on promotions, introduce new product launches and more.

In a way, joint business planning is the lifeblood of a brand’s success at a retailer. So why not do it backed by precise, predictive and high-powered data? 

During these meetings, retailers are looking to CPGs to bring them deep insights and category stories. Retailers add their marketing, promotional, category and financial goals, and both parties come to agree on factors like product assortment decisions, space allocation, pricing and promotions.

For CPGs looking to truly lead joint business planning, there’s a real opportunity to be the smartest in the room. The right data can fuel that intelligence — replacing the days of spreadsheets, slide presentations and mountains of historical data.

Brands that come to these meetings armed with detailed predictive analytics can create more advantage for themselves and grow their positions in the category. Let’s review some scenarios.

Top-Level Brands Need Top-Level Insights

Not all retailers work this way, but some break down joint business planning meetings by revenue. A leading energy, isotonic, or snack brand, for example, will earn meetings with c-level executives in the room. A consumer brand in a tier below them might have in-person sessions with senior-level executives. Below that, a brand might have managers only meeting virtually to discuss planning, and below that would be an informal meeting, with very little to any negotiation.

What does this mean for a brand at the top of the pyramid backed by AI insights compared to the manufacturer at the bottom with predictive analytics? Honestly, nothing other than who’s in the room and the amount of dollars being discussed. 

The beauty of AI-powered forecasting is it can level the field. Retailers will be looking to see which brands are telling a story that invests toward total category growth. A small brand may have insights supporting a new product innovation that requires the existing shelf space of a leading brand’s core products. The leading brand may have insights supporting the resiliency of its core products during tough financial times, requesting its own additional space.

In these scenarios, with highly accurate forward-looking data, retailers, when provided an array of strategies to consider, can ask brands to run “what if” scenarios to test and see the impact with real-time results. This also lets brands and retailers pivot much quicker to respond to external factors. But this all happens through collaboration and rich data.

See also: Someone's Missing in Retailer-CPG Negotiations

Brands Can Offer Personalized Promotions 

Boston Consulting Group and the World Retail of Congress released an April 2023 study on the impact AI can have on retail as it battles financial uncertainty. The study found, outside of Asia, very few retailers are utilizing AI to power pricing, promotional or supply chain decisions. This opens a door for brands to bring intelligence to the table, especially when it comes to suggested promotions. 

The report and global survey included a case study of a North American retailer that tested an AI-powered personalization platform. The retailer used it to customize digital content to shoppers, run personalized promotions and improve its loyalty program. The retailer saw up to a 3% lift in revenue from the test.

Brands can similarly leverage AI to develop personalized promotions at each retailer they partner with and do so at localized levels. The brand can take that data to uncover trends among shopper groups and bring it to a joint business planning meeting, opening conversations around ways to target that retailer’s specific shoppers and demographics.

See also: How Kraft Heinz's Operating Reorientation is Unlocking Benefits

Joint Business Planning Then and Now

Before manufacturers could look to technology like machine learning, joint business planning required a lot of manpower to review legacy data and organize it across spreadsheets. 

Brands have been gathering past sales and customer panel data, looking back at old innovation launches, studying events that may have altered a supply chain for a period, and a lot more. They review the numbers and make highly educated guesses. But it’s all looking backward to attempt to plan performance going forward, and it's prone to human error and human bias. AI can simply detect patterns a human cannot.

As brands go through the stages of joint business planning today, AI can improve each meeting with intelligence that only gets smarter as more data is ingested and learned. CPGs can drive high-level meetings covering ideas such as:

• Will shopper frequency change and to what extent based on macroeconomic factors.
• What categories are most likely to increase a customer’s overall basket size.
• What is the optimal price based on product price elasticity that will maintain or grow volume.
• What promotions will work best for overall category growth.

The insights above greatly elevate joint business planning meetings. Brands should come to retailers with truly powerful insights that more accurately predict how categories will perform in the future, assist retailer partners to make intelligent decisions and advance the outcomes of joint business planning meetings. Machine learning, AI and predictive analytics can help CPGs ultimately create advantage for themselves and the retailer.

— Brooke Hodierne, EVP – strategy consulting, Insite AI