Enterprise Marketing & Promotions Management

Promotional Software & Vendor Portals Are Must-Haves for Successful Supermarkets

By / December 2015

Insights

During the National Retail Federation Big Show 2015, there was a lot of buzz about promotion and pricing optimization. In fact, one panel focused on “Taking the Emotion out of the Markdown Decisions.” A point of discussion was the ever-accelerating retail promotion cycle with holiday specials announced and decorations going up even before Halloween.

Promotional Software Solutions
How are grocers keeping up? For food retailers, the use of promotional software solutions is critical to defining and executing strategy, collaborating with internal departments – such as marketing, merchandising and finance – and communicating with creative teams, media partners and other external resources. Most supermarkets use various in-house or third-party software solutions to plan, execute, track and optimize their advertising strategies.

According to the “Advertising and Promotional Practices of U.S. Supermarket Retailers”report,  the top systems used are promotional planning software, vendor portals, sales planning, and ad planning and execution.

promo_software

Vendor Portals
One of the most commonly used solutions are vendor portals for tracking cost changes, new items and new vendors.

A recent Multichannel Merchant article spotlighted the fact that vendor portals are now more accessible – even for small grocers – because cloud-based platforms and advanced big data technologies can be implemented efficiently and inexpensively.

Here are some benefits of a vendor portal that includes a retail intelligence platform:

Infrastructure Cost Savings
For grocers using ad-hoc reports for vendors and internal teams, maintenance can cost 15-20 percent of up-front software licensing fees, while labor may require one to five full-time employees for a mid-sized grocery chain. These costs would be eliminated with a retail intelligence platform.

Improving Inventory Levels
Slow-moving inventory is an area for improvement for most supermarkets. Inventory issues can be easily identified with effective use of store-level and SKU-level data leading to increased capital efficiency.

Minimizing out-of-stocks
According to industry studies, the cost of out-of-stocks are four percent of total retail revenue. Sharing store-level inventory data with vendors may not eliminate out-of-stocks entirely; however, increased visibility will avoid potential problems at the store-level and reduce out-of-stocks. With the amount of lost revenue from out-of-stocks, it’s important to proactively draw attention to issues before they affect bottom line.

Raising Promotional Dollars
Vendor portals also allow food retailers to attract more vendor marketing dollars to boost sales. Increasingly, vendors are prioritizing promotional budgets to grocers that can provide the information they need to manage and measure the effectiveness of their programs.

Collaboration between grocers and vendors enabled by store-level visibility has contributed to the growth and success of major supermarkets. With more information shared, supermarkets and vendors can enhance relationships, leading to better planning, execution and performance.

* The information in this article was gathered and analyzed as part of a study sponsored by Aptaris and Topco. You can obtain the full report at: GoAptaris.com/AdStudy2015

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