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Retail, CPG and Logistics

Optimising Trade Promotions with AI-Powered Solutions

Effective promotions today are more than attention-grabbers; they’re powerful tools for lasting profitability. Imagine designing promotions that not only capture immediate attention but also create a lasting positive impact on your bottom line. This is the transformative power of Artificial Intelligence (AI) in Trade Promotion Optimisation (TPO), harnessing advanced analytics and data-driven insights to craft innovative and effective promotions.

This article explores how AI is reshaping trade promotion strategies, driving greater value from trade promotion management solutions, and revolutionising practices across the retail industry.


AI as a disrupter in trade promotion management

AI is transforming Trade Promotion Management (TPM) by addressing its complexities—such as managing multiple strategies, partner negotiations, and vast data sets—essential for retail and CPG sectors, where trade promotions drive up to half of CPG sales.

Traditional methods struggle to keep up with fast-evolving consumer habits, but AI-driven solutions overcome these challenges through predictive insights that tailor promotions to customer behaviour, optimise timing, and refine discount strategies. AI enhances decision-making speed by up to 20%, reduces manual costs, and enables rapid adjustments to promotions, making it invaluable in today’s fast-paced, data-driven retail landscape.   Companies investing in AI are experiencing revenue growth of 3% to 15% and a sales ROI of 10% to 20%.


Key benefits of AI-powered trade promotions

AI in retail markets is transforming trade promotions by providing data-driven insights and automation tools to optimise strategies and drive growth. Key benefits include:


Streamlined operations

Automation enhances TPM by streamlining repetitive tasks, allowing employees to focus on strategic planning. AI can replicate successful past promotions and recommend improvements based on factors like volume, budget, and duration. An AI assistant equips key account managers with seamless access to analytics, enabling agile adjustments to promotions. This data-driven approach reduces labour costs and optimises resource allocation, which is crucial for CPG companies where trade spending often exceeds 20% of revenue.


Enhanced predictive analytics

AI-powered TPM optimises trade spend for maximum ROI through real-time analysis of market trends, consumer behaviour, and sales patterns. Predictive insights allow companies to schedule promotions effectively, automate inventory management, and use dynamic pricing to adjust based on demand and competition. Even a 1% price improvement can enhance profits by around 8.7%, highlighting the financial potential of predictive analytics.


Personalised campaigns

Unlock the Future of AI-Powered Trade Promotions Today!

Unlock the Future of AI-Powered Trade Promotions Today! 

AI empowers retailers to create personalised promotions by analysing customer data, such as purchase history and preferences, transforming generic campaigns into targeted marketing. By leveraging sentiment analysis from social media and online feedback, retailers can refine their strategies to engage micro-segments. Such customisation strategies can significantly boost conversion rates, reduce promotional waste, and enhance customer loyalty.  A well-executed, hyper-personalised marketing strategy can deliver eight times the return on investment (ROI) and lift sales by 10% or more.


Increased ROI through optimisation

By optimising trade promotions with AI, companies can reduce wasteful spending and allocate budgets more strategically. AI algorithms can assess which promotions are yielding the highest returns and adjust resource allocation accordingly. This allows for a continuous cycle of improvement, where each campaign becomes more effective than the last. Additionally, AI-powered solutions can simulate various scenarios, allowing companies to test the potential impact of different promotion strategies before implementation.


Real-time performance monitoring

AI-powered trade promotion management solutions offer real-time insights into the effectiveness of promotions. Rather than waiting until the end of a campaign to evaluate its success, companies can monitor performance as it unfolds and adjust in real-time. For example, if a promotion is underperforming in certain regions, AI can suggest alternative strategies or reallocate resources to areas with higher engagement. This flexibility is invaluable in a fast-paced retail environment, where consumer behaviours can change overnight.


The future of AI-powered trade promotions

The retail, consumer packaged goods (CPG), and logistics sectors are rapidly evolving as businesses adopt new tools to meet competitive market demands with shifting consumer preferences. With advancements in AI technology, optimising trade promotions will become increasingly feasible, leveraging refined predictive models to uncover specific customer preferences and triggers.

The focus on sustainability in 2024 and beyond places additional pressure on companies to reduce waste and optimise resources. AI-driven trade promotions aid in reducing waste by aligning inventory with demand, minimising markdowns, and enhancing profitability while promoting more responsible resource management.

Additionally, AI will enhance omnichannel promotions, enabling engagement across multiple platforms. Companies that implement AI in trade promotion management early will gain a competitive edge, better responding to evolving consumer demands and market conditions.


How can Infosys BPM help implement ai-powered trade promotions?

For businesses aiming to elevate their trade promotion strategies, Infosys BPM presents AI-powered solutions that drive growth and innovation. These solutions not only improve operational efficiency but also empower companies to create more meaningful and impactful consumer interactions. With the retail and CPG industries becoming increasingly data-driven, the adoption of AI-driven trade promotion management solutions will be essential for staying competitive in the modern market.


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