The $500B Elephant in the Room – Trade Promo Dollars

How to Make Your Trade Promotion Dollars Work Again

Manufacturers are spending $500 billion (Source: Nielsen) per year in trade promotional spending. According to a recent Nielsen study, 71% of trade promotions in the U.S. don’t return any positive ROI. That’s a lot of money. It’s the elephant in the room manufacturers keep ignoring.

Yet, this spending is declining in efficiency as consumer shopping patterns shift from traditional media to online shopping. Unfortunately, the trade promotion programs have not followed suit. Most are not digital. Most don’t address the shifting shopping habits either. As a result, manufacturers are losing a critical tool in building and keeping their brand in the forefront of millennial shoppers.

So, what can be done about it?

There needs to be a modern online trade promotions tool to deal with the shifting behavior. This tool needs to bring the brand engagement, the brand storytelling that manufacturers want to deliver – but in a native format that works for the way consumers behave today.

There are three essential elements:

  1. Promote where the shoppers shop. The pre-store (and in-store) shopping is now done online. That means an increasing portion of the trade promotion budget needs to go to online merchandising programs and not just physical retail. Any manufacturer who understands that pre-store shopping (called webrooming) has become more critical to even the in-store purchase and changes their promotional investments will quickly benefit from increasing effectiveness.
  1. Location. Location. Location. In the real-estate business, there is a central mantra about the importance of location in the value of piece of real estate. The same is true for ecommerce real estate. The premium real estate in ecommerce sits above the fold (before the first scroll of the browser window). This real estate exists at least in two critical locations – the product category/listing page and the product detail page. Both are critical to getting your message across and both should be used extensively to promote your products.
  1. Tell the full brand story. Enable your impactful story – at the zero moment of truth (ZMOT) – right where the shopper is shopping. This means bringing the emotional messaging to the pre-sales and point of sale experience.

New tools are emerging to equip marketers with the ability to market at the ZMOT. One example is SYNQY, which allows digital marketers to deliver the right message to the right shopper – at a time and place that is relevant and convenient. SYNQY enables manufacturers to deliver interactive product marketing content to resellers in a scalable and highly effective way (view examples here). Brands are creating hours of additional brand engagement per month and building up their revenue streams. SYNQY has seen add-to-cart rates grow by almost 300% and deliver real ROI.