At this point in the trade calendar, most CPG customer team leaders are in the thick of trying to manage the year. The events have been planned, the dollars are allocated, and we’re nearing an opportunity for a second half reset/adjustment to ensure the numbers will be hit. It’s the same thing every year… some years things go better and some years worse, but we’re always struck by a few surprises by this time in the calendar; promotions that we expected to work had underperformed, and we need to figure out what changes we need to make to the back half to keep on track.

It’s not just you… as an industry we keep “grandfathering” or “anniversary-ing” promotions year after year, and as shoppers habituate to them the relative impact of the offers simply don’t have the same punch they once did. It’s part of the reason why trade rates have gone up from 17% of revenue for most CPG sales teams in 2012 to nearly 25% by the end of the year, according to Gartner. For the most part, this growth has been led by driving more and more weeks on deal, without changing the promotional mechanics.

In years past, one could argue that reaching shoppers was simpler, as they cared primarily about retail location and price when making shopping decisions. Teams could be successful by running relatively basic promotions focused on price. However, today’s heterogeneous, hyper-connected, omni-channel shopper is influenced by far more when making decisions. Today we know from  Behavioral Economics research that shoppers make decisions in seemingly irrational ways, influenced heavily by a range of emotion, social, cognitive, and economic drivers; and perhaps most importantly, they are seeking an experience tailored to their specific needs and wants.

As retailers come to terms with the modern shopper, they are beginning to restructure everything from store layout to loyalty and marketing programs to assortment and checkout, and promotions haven’t escaped this scrutiny. Retailers are beginning to ask for more than just the same promotions found in most of their competitors’ stores. With shrinking margins under ever-increasing pressure, putting more trade dollars on the problem is throwing good money after bad. The result is an intense pressure to do more with less; resources are strained and funds are stretched.

So how can your promotions efficiently disrupt this cycle? What if you could refresh your planning and infuse it with new insight and BETTER offers that could help you and your retailers win? It’s not magic – just science and foresight.

Several leading CPGs like Unilever, Kimberly-Clark, BIC, and AB InBev have begun adding an Offer Innovation capability to their toolkits. Offer Innovation is a distinct departure from the world of backward-facing point-of-sale analysis and reflects a transition to a powerful test-first approach, combining the latest in predictive analytics, machine learning, and data science to conduct micro-testing with real shoppers via existing 0mni-channel shopping platforms (Facebook, email, retailer loyalty apps, etc.). Based on the actual purchase behavior of the shoppers exposed to these tests, the most effective in-store promotions can be reliably identified and integrated into the trade calendar.

Get started with Offer Innovation while there’s still time to impact the back half of 2015!