Consumer Panel Data in Trade Promotion Optimization

Role of Consumer Panel Data in TPO

• Consumer panel data offers detailed purchase information from a representative sample of households.
• It enriches trade promotion optimization (TPO) by revealing patterns such as brand switching and repeat purchase rates.
• Household panel data can quantify how promotions induce consumers to switch brands, aiding manufacturers in distinguishing incremental volume.
• TPO platforms that use panel data generate more accurate forecasts and lift estimates by accounting for consumer behavior nuances.
• Accenture's TPO solution incorporated consumption data to simulate promotions' net effect on volume, beyond just shipments.
• TPO simulations can predict the long-term outcomes of promotions better with panel data.
• Panel data helps estimate how many new shoppers a promotion recruits versus how many purchases just shifted timing or brand.
• Advanced CPGs analyze panel and loyalty data to assess promotion impacts on household penetration and shopper retention.
• One European CPG used shopper data to identify which promotions attracted new customers versus subsidizing existing ones.
• The company uses deep discounts for volume boosts and non-price promotions for long-term brand gains, based on panel data insights.
• Consumer panel data enhances TPO by grounding models in actual consumer responses.
• It answers who bought during a promotion and whether the promotion expanded the buyer base or just caused switching.
• This leads to more realistic scenario planning and optimization.

Case Example – Brand Switching Analysis

• A large portion of promotional volume comes from brand switching rather than category expansion.
• Panel-derived elasticities in TPO systems can forecast outcomes more accurately.
• If panel data shows 70% of coupon volume comes at the expense of future purchases or competing brands, an optimizer might simulate a lower ROI.
• Consumer panel metrics like household penetration, buy rate, purchase frequency, and share of requirements become key inputs in optimization.
• Companies obtain metrics from NielsenIQ or IRI panel services and feed them into TPO platforms.
• Techniques such as multivariate regression are applied to isolate promotion effects.
• Panel-based marketing mix models decompose a sales lift into baseline vs. incremental, with drivers like new buyers vs. increased spend per buyer.
• TPO planners can simulate how changes in promotion depth or frequency might impact repeat purchase rates or brand loyalty.
• Panel data moves TPO beyond just total sales to understanding who will drive those sales and how to retain them.

Successful Integrations

• Many CPG firms have found success by integrating TPO with consumer insights.
• Coca-Cola's TPO initiative leveraged retailer scanner data combined with panel data to understand cross-brand impacts.
• General Mills deployed a Trade Planning & Optimization service to understand consumer behavior at the store shelf and predict the impact of pricing and promo changes.
• Procter & Gamble (P&G) has used machine learning on years of household panel and sales data to fine-tune promotion response models.
• Incorporating consumer panel data into TPO boosts forecast accuracy and promotional ROI.

How Retail Execution Feeds into Optimization

• A frequent saying in CPG is “plan in headquarters, but win at the shelf.”
• Retail execution data – price and promotion compliance information – is a crucial feedback loop for TPO.
• In-store promotional compliance is often far lower than assumed.
• The Promotion Optimization Institute found that 75% of CPG brands struggle to execute in-store promotions effectively.
• A promotion that isn’t executed can't deliver the expected lift.
• End-cap displays have about 47% on-plan execution vs. 43% not executed as intended, whereas more complex displays see over 90% non-compliance.

Incorporating Execution Data

• Modern TPO approaches integrate execution metrics to adjust and improve plans.
• Promotional compliance tracking measures whether agreed prices, shelf displays, and features occurred on time and in full.
• Kimberly-Clark undertook a project to audit in-store promo execution, finding compliance rates as low as 15–50% in many cases.
• They equipped field teams with a mobile app to capture shelf conditions during promotions.
• These insights allowed a more realistic assessment of past promotion ROI and informed future trade plans.
• Companies are now baking expected compliance levels into their TPO simulations.

Tools for Tracking & Optimization

• Many companies deploy Retail Execution (RetEx) software alongside TPO.
• RetEx systems enable field sales reps or merchandisers to capture store-level data on promotions.
• UpClear notes that linking TPM with Retail Execution is key.
• TPM handles planning, while Retail Execution systems confirm what happens in the store.
• Common metrics fed back into TPO include percentage of stores compliant, timing adherence, display compliance, and out-of-stock rates during promo.
• Machine vision technology is an emerging aid, using image recognition AI to scan shelf photos and automatically detect compliance issues.

Impact on Effectiveness

• Improving execution boosts promotion ROI.
• Roamler highlights that using on-demand field reps to ensure timely display setups, brands have achieved an average compliance rate of 91% on promotions.
• Those promotions then see higher lifts, validating the investment in execution monitoring.
• Companies that closely track execution can quantify the lost sales from non-compliance.
• Retailers also benefit, since a well-run promotion drives their sales too.
• Many manufacturers now include execution clauses in trade agreements and share compliance data with retail partners to collaboratively improve.
• Retail execution data feeds TPO by providing the ground truth of promotional reality.
• Forward-looking organizations treat TPO and retail execution as two sides of the same coin.

Case Studies and Industry Reports Integrating TPO, Panel Data & Execution

• General Mills deployed a Trade Planning & Optimization solution to analyze consumer behavior and predict the impact of price/promotional changes.
• Nestlé built analytics hubs to harness data for pricing and promo optimization in real time.
• Hershey implemented an SAP-based TPM/TPO platform integrated with S/4HANA.
• This transformation had striking results: ~99.5% accuracy in trade investment forecasts and a 730 basis point improvement in trade spend efficiency.
• Hershey is aggregating shopper data and field execution feedback into their models.
• Kenvue, the consumer health spinoff of J&J, is placing big bets on data-driven marketing and trade investment.
• Kenvue is setting up modern TPO capabilities that likely integrate syndicated sales data, consumer panel insights, and robust retail execution tracking.
• Numerous industry reports document companies tying together these elements.
• A Coca-Cola case study noted Coke implementing SAP’s TPO solution globally, achieving better forecast accuracy and promotion ROI through data consolidation.
• Unilever has spoken about using Nielsen panel data to understand promotion impacts across categories.
• Companies that integrate consumer panel insights and execution monitoring into TPO can find incremental growth and efficiency where others cannot.
• Siloed trade promotion management is giving way to integrated, analytics-driven optimization, with consumer and execution data as core inputs.

TPO and RGM Software

• The landscape of software for trade promotion optimization has matured, with solutions often bundled into broader Revenue Growth Management (RGM) suites.
• These tools ingest large volumes of data and apply advanced analytics to recommend optimal promotion plans.
• Many TPO tools provide "what-if" simulators and constraint-based optimization.
• A common thread is the ability to integrate external data like syndicated sales and consumer panel data. Consumer Panel Data Analysis Tools
• On the consumer insights side, the primary sources are NielsenIQ and IRI, which offer household panel services.
• NielsenIQ recently acquired Cornerstone Capabilities, aiming to integrate POS, panel, and financial data in one platform.
• Advanced analytics platforms and consultancies offer services to fuse panel data into marketing mix models that inform TPO.
• Novel approaches use AI to enrich retailer loyalty card data with panel data.

Retail Execution & Compliance Tech

• Retail Execution software and field force automation tools are abundant.
• These often use mobile apps for reps to report on promotions, plus dashboards for managers to track compliance by store/day/SKU.
• Some incorporate image recognition.
• Modern TPM/TPO suites can pull in these execution metrics via APIs.
• Some TPO systems even adjust their post-event analysis automatically by weighting results by compliance.

AI and Emerging Trends

• Machine learning models are being used to improve uplift predictions.
• Solvers and AI agents can crunch through millions of promotion calendar combinations to find the optimal mix.
• TPO tools are moving towards real-time or near-real-time data ingestion with the rise of cloud data warehouses.
• Collaborative TPO is where manufacturers and retailers share a platform to plan and evaluate promotions together.
• Emerging TPO software focuses on usability, intuitive UIs with scenario simulators, slider adjustments, and visualization of outcomes.
• Beyond sales uplift, tools now try to integrate multiple KPIs – profit, supply chain costs, and brand health metrics from consumer data.

Consumer Panel Data Enhancing TPO Predictions

• CPG companies are increasingly integrating consumer panel and loyalty data into their trade promotion optimization (TPO) processes.
• By combining household panel insights with point-of-sale (POS) and internal data, firms can better predict promotion outcomes and simulate scenarios with greater accuracy.
• Advanced analytics (AI/ML) make it possible to mine these rich datasets for patterns in shopper behavior, leading to more precise and data-driven promotion planning.

Leading CPGs Use Panel Data

• Top manufacturers have invested in accessing household panel and retailer loyalty-card data alongside traditional sales data.
• This has enabled more sophisticated promotional campaigns that drive both short-term sales lifts and long-term brand health.
• Analytics-driven TPO models can simulate promotion impacts on household penetration and even basket size at retailers.

Shopper-Level Insights in Action

• One European CPG company overhauled its promotions by analyzing millions of anonymized shopper transactions from panel/loyalty data.
• This granular approach uncovered surprising truths.
• Armed with insights, the company adjusted strategy to better target that segment and boost penetration.
• The analysis also quantified which promotions had lasting effects.
• Merging panel data with AI helped challenge old assumptions and identify win-win promotions that grow both the category and the brand.

Hershey’s Data-Driven TPO

• Hershey built a proprietary TPO system that blends shopping behavior data, promotion feedback, and other consumer insights to optimize trade spend.
• This in-house platform covered ~40% of Hershey’s product portfolio, guiding promotion decisions with machine learning.

Technology Enablers

• Recent advances in cloud analytics and automation facilitate these uses of consumer panel data in TPO.
• Modern TPO software emphasizes seamless data integration – pulling in POS, shipments, and panel/consumer data into a unified model.
• AI/ML algorithms then crunch these diverse inputs to detect non-obvious drivers of lift and to generate predictive models.
• According to industry experts, the best TPO platforms now offer one-click scenario simulations and automated what-if analyses that incorporate panel insights on how different shopper segments might respond.
• The result is more accurate promotion forecasts and smarter allocation of trade dollars.
• Leveraging consumer panel data and analyzing it with AI has become a critical best practice for CPGs aiming to elevate their trade promotion ROI.

Retail Execution & Promotion Compliance Tracking

• Ensuring that promotions are executed correctly at the store level is just as important as planning the right deals.
• In the 2020s, companies have turned to technology to monitor retail execution and compliance in real time.
• These innovations help bridge the last mile of trade promotions, making sure that agreed prices, displays, and product availability actually materialize in stores.
• Several firms have reported improved promotion compliance rates and more consistent retail execution thanks to such solutions.

Kenvue’s “Perfect Store” AI Program

• Kenvue launched a data-driven Perfect Store initiative to help retail partners eliminate out-of-stocks and execution gaps.
• Using AI, Kenvue analyzes each retailer’s daily store-level sales data to spot anomalies that suggest a promotion isn’t being executed properly.
• This proactive alerting has led to great results in preventing empty shelves during promotions and ensuring promotion compliance at the store level.

Image Recognition for Shelf Compliance

• A major trend in the 2020s is deploying AI-powered image recognition to track in-store conditions.
• CPG companies and retailers use smartphone apps or shelf cameras to photograph displays, then algorithms identify products, pricing, and placement instantly.
• Store employees went from spending an hour checking shelf layouts to just 15 minutes with the app guiding them on exactly what to fix
• Automation and AI can dramatically improve promotion compliance and reduce manual auditing effort.
• The next phase is adding price tag monitoring.

Real-Time Field Execution Apps

• Many CPG sales teams now equip their field reps and merchandisers with mobile apps to audit promotions, backed by analytics.
• These apps can tell a rep which high-value stores or displays to prioritize on a given day and can instantly analyze a photo of a shelf to detect missing promo tags or products.
• Companies using such tools report faster issue resolution and higher consistency.
• Technology-driven retail execution is helping CPGs and retailers maintain price and promo compliance, thereby protecting the intended ROI of trade promotions.
• Compliance and ROI Impact
• The payoff from improved retail execution is measurable.
• Industry surveys historically found that actual display compliance in stores was far lower than managers assumed.