The Consumer Packaged Goods (CPG) industry is one of the largest and most intensely competitive sectors in the world, covering everyday products like food, beverages, personal care, and household items. This industry is crowded with global powerhouses like Unilever, Procter and Gamble, and Nestle, who alongside local and regional players, vie for the consumer’s eye. Trade promotions play a key role for CPG companies.
Trade promotion activities are an important aspect of the retail ecosystem and they include the marketing activities undertaken by manufacturers to incentivize retailers, wholesalers or distributors to stock, promote, and sell their product. They help boost short-term demand, enhance product visibility, and strengthen the relationships with trade partners.
At its core, Trade Promotion Optimization (TPO) is a strategic aspect of trade promotions that helps companies use data to analyse the true ROI of trade promotions. With the CPG industry operating on razor thin margins and complex retailer relationships, maximising the value of trade-promotion budgets is not optional. It is absolutely critical.
the traditional way
Typically, trade promotions done the manual way can be extremely tedious and time-consuming. Teams often sift through umpteen data spreadsheets, analyse the data, and try to piece together trends and performance insights. This kind of approach is prone to errors.
Companies that still rely on basic legacy trade promotion management end up with investments in poorly targeted or underperforming promotions, slow reaction to market shifts or competitor moves, and weak forecasting accuracy. Over time, these gaps make it hard for such companies to stay afloat, let alone thrive, in an industry where speed and precision matter.
the Agentic AI way to TPO
Now picture this scenario.
What if your trade promotion could think for itself, analyze market data and recommend the exact price and product mix to increase the ROI. No, this is not science fiction — it is happening right now. Intelligent AI agents have the capability to optimize every dollar spent on promotions.
Agentic AI helps in TPO in the following ways:
demand prediction
During promotions, there is usually a surge in demand. Most automated systems just run a one-time prediction to forecast the increase or “lift” in demand. Agentic AI goes far beyond that. It continuously monitors real-time signals, such as sales velocity, competitor moves and inventory changes among other criteria, and then automatically adjusts its forecasting models. It refines its predictions as new data arrives, improving the accuracy by severalfold.
automatic allocation of budgets
Allocation budgets to the right promotions is a core component of TPO. Instead of humans deciding where to spend money for promotions, with Agentic AI, there is automatic distribution of budgets toward promotions that deliver the strongest ROI. Agentic AI evaluates thousands of possible promotion-budget scenarios, identifies the most profitable promotional events, runs simulations on lift, cost and potential cannibalization, and then allocates budgets without waiting for human instruction. It continuously reallocates funds to maximize value.
analysis of results and improvement of future campaigns
Once the promotion cycle ends, the Agentic AI automatically ingests the results of the promotions. It is able to grade and evaluate each promotion’s effectiveness and accordingly update strategies, segmentation logic, and promotional playbooks. It adjusts future recommendations without manual intervention, ensuring that future campaigns are smarter and more effective than the earlier ones.
automatic adjustment of offers
Promotions can be modified in real-time depending on supply levels or market shifts. Agentic AI watches critical signals continuously and if the stock is low, it reduces promotional push. If a competitor launches an aggressive deal, the offers provided are intensified. If demand spikes unexpectedly, it reshapes mechanics or timing. It autonomously replans promotions hour by hour, protecting margins and avoiding out-of-stocks.
detection of overlapping or cannibalizing promotions
Another ability of Agentic AI is its ability to detect cannibalization between promotions. In complex retail environments, multiple promotions may overlap, compete with one another, or unintentionally dilute profitability. Agentic AI scans the full promotional calendar and spots promotional conflicts across categories, brands, and regions. It detects patterns where one promotion unintentionally steals demand from another, and recommends fixes or automatically reschedules events. Acting as an intelligent watchdog, it ensures that the promotional portfolio works together instead of against itself.
delivery of personalized offers
With Agentic AI, promotions can be tailored and personalized to specific shopper segments, channels or individual stores. It builds micro-segments of shoppers, learns behaviors for each channel — ecommerce or physical stores — and customizes offers dynamically depending on the need of each of these channels. It autonomously shapes promotions that feel individualized, dramatically improving conversion, and strengthens overall ROI.
With all the advantages that Agentic AI brings, adoption of the technology for TPO is no longer a question of if, but how soon. The future of trade promotions belongs to companies that can move fast, learn continuously, and adapt in real time. Brands that adopt it won’t just run better promotions. They will build a smarter, more responsive commercial ecosystem that keeps them ahead of competitors and closer to shoppers.
how Infosys BPM can help
As the digital consumer revolution accelerates, the CPG industry is experiencing significant disruptions that require innovative responses. To remain competitive, CPG organizations must focus on efficiency and cash conservation. Infosys BPM stands out as a trusted partner, helping CPG companies achieve business outcomes such as improved efficiencies, higher productivity, better on-time delivery, and optimized inventory and freight costs.
