Over the past several years I have been involved with some rather sophisticated technologies around consumer goods and retail. One of the more exciting solution areas I have worked with is Clientelling – a software application that is typically deployed by a retailer, but can also serve the supplier’s objectives as well.
If you have ever walked into a store, car dealer, or service company and been approached by a sales associate holding an iPad®, you have interfaced with a Clientelling Application. This is a software application that typically contains information such as inventory, promotions, pricing, service and other critical data about the store that allows the associate to help improve the customer’s shopping experience. Most solutions also contain customer profile data taken from store loyalty program and even their online shopping activities.
If they ask you for your email address, they will know in a heartbeat everything you have looked at (on their corporate website for sure), purchased, or put into your shopping cart and did NOT purchase. If you are a loyalty member they will have all that information as well. In other words, they will most likely know what you are doing in their store and what you are interested in.
Whether you believe these new capabilities to be cool digital technology or creepy invasions of privacy, they represent an effective tool in the retailer’s efforts to enhance the customer’s shopping experience by showing how going to the store is the most fulfilling and enjoyable way to shop. This is clearly a consumer marketing tool; but, it also has an important role to play in support of the trade promotion as well.
By most metrics, trade promotion effectiveness is hovering around 60% for both retailers and suppliers. This is not all that great when you think about this being the second largest line item in the manufacturer’s corporate financial statement and nearly 40% of it is deemed ineffective or wasteful. Considering that the current processes and systems that predict, model, or optimize trade promotion plans are disappointingly inaccurate, and that there is little in the way of real consumer intelligence baked into those algorithms, then it is safe to say that trade promotion execution is in critical need of help. Clientelling solutions could go a long way to provide needed first aid.
This need not be an exclusive retail use case – it can also be a partnering tool for CPG suppliers to support trade promotion effectiveness.
As I mentioned earlier, many of the more sophisticated Clientelling applications include near real-time data on consumer shopping activity that can incorporate real-time alerts that the shopper is in the store. Artificial intelligence-driven promotion enhancement recommendations can alert store managers and associates to real-time shopping activity, purchases, and even provide referral products that are not on promotion which can be suggested to the shopper based on past purchases and/or online shopping history.
Imagine the scenario where the retailer creates promotional themes and builds specific product promotions around them with recipe ideas on the store website. Lets take an example of a promotion for a specific brand of pasta. Collaborating with their CPG suppliers, specific promotional offers are created and forwarded to individual consumers who have either purchased those products in the past or regularly consult recipe sites for meal ideas. The application sends coupons for the pasta directly to the customer with opt-in prompts that, once activated, alert the various department heads to prepare their respective areas to support the pasta promotion. The wine department prepares special tasting demos that are triggered to align with the themed recipes. The meat department offers special cuts and discounts on meats from the recipes and the store can use shelf tags in the promoted pasta product slot to prompt the shopper to visit each of those departments to complete their shopping experience and create a wonderful meal for their family. These referral products are not generally on promotion, enabling the store to generate higher margin retail sales and enhance the ROI for the trade promotion. With more intelligence showing us this is the way modern consumers tend to shop, you can easily see how adaptive this new technology can be and how it can accelerate the value of the promotion.
So, the Clientelling application not only provides direct customer assistance, but can, and should, be a smart tool that directs each department head, associate and stock clerk to focus on a truly leveraged promotion. Trade promotion is, by its very nature, an incentive that is a business-to-business use case deployed to increase the sales of product to the store. With the Clientelling solution, the potential to engage the store personnel in a deeper, more productive and satisfying shopping experience for the customer and, at the same time improve the ultimate ROI value of the promotion, the value proposition is a double plus.
In a time when trade promotions are under pressure for financial return and are viewed as lacking consumer focus, this is an excellent solution that a Clientelling application can provide to address an age-old problem of low promotion effectiveness. Because the retailers are typically the common users of these applications, there is a very strong use case developing for manufacturers to partner with and participate in individual promotions leveraging these functions.
If you think about it, it is also a great opportunity to engage in meaningful collaboration.
I am eager to hear from you about any scenarios where you are currently working with your retail customers to provide input to or sharing data with Clientelling applications. Let’s start a dialogue that can involve both manufacturers and retailers.