TABS Analytics Blog

What is Trade Promotion Optimization and the Problems it Faces?


Editor's Note: this post was originally published in August 2014 and was updated in December 2015 to include additional trade promotion optimization content links. 

The concept behind a trade promotion is simple: spend money with a retailer with the expectation of deriving a tangible benefit such as increased sales, increased profits or higher market share. The mechanics, however, are more involved: in order to ensure that you're taking the right steps to drive more sales, optimizing your promotional plans is key. And, with trade promotion spending accounting for 15-20% of sales revenues[1], it’s even more critical to get this process right.

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The New Realities of the Vitamin Market

TABS Group conducts an annual study to collect data about consumers' purchases of vitamins, minerals, and supplements across both food, drug, mass, club, and dollar (FDMCD) outlets and non-FDMCD, including online, natural food, nutrition supply, catalogue, and MLM outlets.

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Loyalty Card Programs May Be Hurting Your Sales

Loyalty cards seem like a good deal on the surface: you can gather a wealth of information about shoppers, as well as hand them an incentive to come back to your store again and again.

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2012 Consumer Packaged Goods Year In Review: Tier Two Manufacturers

Last month I review how Tier I companies (the Top 15 in CPG) saw zero growth, and in fact, very little change in sales at all. Of the 15, only one (Mondelez at +6%) had growth equal to or greater than the category average of +2%. Conversely, only two of the 15 had any meaningful declines, both at -2%. This month we look at the 60 Tier II companies in CPG, which I will define as non-Top 15, but greater than $1B in US-AOC sales for 2012. The story of these companies, that account for 28% of CPG sales, start to tell an interesting story about the ability of companies to drive meaningful sales in their business.

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Snap Shot: Top Consumer Package Goods Business Challenges for 2013

Recently we asked our clients for their top business challenges in 2013. By far the top 2 issues were Promotional Effectiveness (74%) and Product Innovation (72%). Also receiving sizable mention was Retailer SKU Reduction (55%). TABS Group has solutions to address all of these and many other important business needs.
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2012 Consumer Packaged Goods Year In Review: Tier One Manufacturers

In 2012 Consumer Package Goods, according to Nielsen, generated annual retail sales of $630B sales, up a modest +2% vs. the prior year1. Interestingly, of the more than 15,000 manufacturers, the Top 15 CPG Manufacturers, who each did in excess of $5.5B in sales and accounted for 30% of CPG retail revenue1, were flat vs. prior year. In fact only one, Mondelez (+6%), had growth that was equal to or greater than the industry overall.

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