The ability to optimise pricing, promotions, and product offerings has become a critical differentiator for consumer gods companies. However, many of the RGM initiatives are focused on very tactical, price-hiking initiatives. Let us look beyond tactical optimisation and see how to elevate RGM practices to an expert level, leveraging sophisticated data analytics and advanced methodologies.
Value creation from a brand vs retailer point of view
Understanding the dynamics of value creation in retail categories is crucial for brands and retailers alike. While brand loyalty and unique product features can drive premium pricing, consumer behavior is often fluid, with shoppers frequently switching between brands and pack sizes. Promotions, new product launches, and price adjustments significantly influence purchasing decisions, causing shifts across packs, brands, and even stores. Accuris' Source of Business® model quantifies these complex interactions. The model is capable to quantify the value impact of every promotion, listing, and price change, providing a holistic view of how these factors affect not only the target SKU but also related products within the same brand, other brands from the same supplier, competitor brands, and the entire category. This granular analysis extends to understanding cross-retailer impacts and changes in purchase timing, such as stockpiling behavior. By leveraging historical data on category growth, consumer upgrading and downgrading patterns, and brand switching, Accuris empowers brands to identify optimal promotional strategies and price points. These insights enable companies to encourage shoppers to move up the value chain, ultimately increasing category spend and driving sustainable growth for both brands and retailers in an ever-evolving marketplace.
Source of Business® Methodology: A Closer Look
Accuris’ approach to RGM is grounded in a sophisticated analytical framework, called Source of Business®, that goes beyond surface-level metrics. Their methodology involves:
Holistic Impact Assessment: Accuris measures the value impact of every promotion, listing, and price change not just on individual SKUs but across the entire brand portfolio, competitive landscape, and retail ecosystem. This includes analysing how a price change for one SKU impacts other SKUs within the same brand, competitor brands, and even across different retailers.
Scenario Simulation and Sensitivity Analysis: Accuris’ platform allows businesses to simulate a wide range of scenarios, from minor price adjustments to significant promotional campaigns, to predict their impact on volume, profit, and market share. This scenario planning is crucial for understanding the potential outcomes of various strategies and for identifying the optimal mix of pricing and promotional activities.
Value Chain Optimisation: The insights generated by Accuris go beyond simple revenue calculations. By analysing historical data on category growth, brand switching, and consumer upgrading or downgrading, Accuris identifies which promotional campaigns and price points are most effective in driving consumers up the value chain. This means not just increasing sales, but increasing the profitability of each sale by encouraging consumers to spend more within the category.
Customised Strategic Recommendations: One of the standout features of Accuris’ methodology is its ability to provide tailored recommendations. These recommendations are based on a detailed understanding of how different brands interact within a category, how consumers perceive value, and how these perceptions can be influenced by targeted pricing and promotional strategies.
The Importance of Data Granularity
In advanced RGM, the devil is truly in the details. Broad strategies may drive some level of growth, but to achieve sustained, profitable growth, companies must engage in a level of analysis that considers every variable. Accuris’ platform excels in this regard by offering data granularity that allows businesses to pinpoint exactly where value is being created or destroyed.
For example, Accuris can help businesses understand how a promotion impacts not only immediate sales but also long-term brand loyalty, competitor dynamics, and even consumer stockpiling behaviour. By understanding these nuances, businesses can make more informed decisions that lead to sustainable growth rather than short-term spikes followed by declines.
Advanced RGM in Action: Strategic Differentiation
A critical component of Accuris’ methodology is the strategic differentiation of brands within a portfolio. This involves positioning each brand in a way that maximises its appeal to its target audience while minimising cannibalisation within the portfolio. For instance, a premium brand may be positioned with higher base prices and fewer promotions, while a value brand might focus on aggressive promotional pricing to capture market share from competitors.
Accuris’ platform provides the tools necessary to execute this strategy effectively, allowing businesses to model different pricing and promotional scenarios and see their potential impact in real-time. This enables companies to make strategic decisions with confidence, knowing they are backed by data-driven insights.
Summary
In an increasingly complex market, the ability to manage revenue growth effectively is what separates market leaders from followers. Accuris’ advanced RGM methodology provides the tools and insights needed to not only compete but to thrive. By leveraging their sophisticated analytics and tailored strategic recommendations, companies can ensure that every pricing, promotional, and packaging decision is optimised for maximum impact.
For businesses serious about elevating their RGM practices, Accuris offers a proven path to sustained profitability and market leadership. With their expert-level capabilities, companies can navigate the challenges of the modern market with precision and confidence, securing their place at the top of the value chain.
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