Godrej Consumer Products Ltd. (GCPL) is a leading FMCG company which operates in India and in several other emerging markets. It’s products reach millions of consumers globally. In India, its popular brands like Good Knight, Cinthol, No.1, Expert & Aer are available on the shelves of more than 3.5 million retail stores. Like any other FMCG company, GCPL also spends significant amount in trade promotion.
The company wanted to track the impact of these trade promotions & manage it optimally to ensure better ROI for the business.
GCPL chose Oracle Demantra Predictive Trade Planning solution which provides the business insights based on data analytics. The company has implemented the solution successfully to bring transformation in their trade promotion management & planning process.
In an exclusive interaction with Milind Korgaonkar, Head of IT (India and SAARC Cluster), Godrej Consumer Products Ltd further shed light on how GCPL is benefitted with Oracle solution.
Retailers are struggling to get attention from the customers today, because there are so many companies and so many brands. How are retailers in your opinion using technology to get noticed, to make their brand and their presence felt in the market today? What are your thoughts on this?
India is a heterogeneous country in terms of retail environment and in my mind each format requires a different lens and a different treatment as the challenges are different too. It cannot be one size fits all kind of approach. If we look at the general trade/ kirana store format, they will have different store sizes and the footfalls would vary. The nature of a kirana store in a small town vs. a city like Mumbai would also require different merchandize as the way they would sell and what they sell would again vary. These retailers would have limited real estate to maintain the right stock. They cannot have big inventories sitting with them and they need to rotate the cash fast. Similarly, when we talk about the modern trade format, it requires a lot of innovative offers and merchandize assortment, as the consumer’s shopping behavior is different there.
For a consumer products company like ours, we need to plan the most relevant promotions and ensure right assortment at shelves to win at this diverse retail environment. A solution like Oracle Demantra in our case, for example, helps us plan trade promotions which are very effective, and unique, right down to specific retail outlet. This is also how we are trying to facilitate our trade planners & sales force to win the minds of consumers and shelf space at retail points.
Can you elaborate on the challenges that you faced that led you to implement the Oracle solution?
In our industry, the monies spent on trade promotions by manufacturers is significant. One of the biggest challenges we faced was to monitor and track the ROI that we were getting from these promotions, which was a herculean task for us to manage. For us specifically, this challenge grew multifold as the number of consumers of these promotions i.e. the retailers in our case, was a very large base.
With Oracle Demantra today, we are not just able to look at the historical impact of the various kinds of promotions that we've run in the past, but at the same time we are also able to predict the future impact that a promotion will create for our product category. It is not so simple as it sounds because when we talk of a promotion, the construct of the promotion is very diverse, and it requires a lot of predictive capability integrated in the application. This gives us varied and complex insights into what behavior would a retailer display when introduced to a specific promotion, what should be offered to him and much more. So, the entire trade promotion modeling is something that we do using Oracle Demantra which has started to help us plan our promotions in a far better way backed by analytical insights and not assumptions alone.
The other challenge initially was to not be able to measure the effectiveness of our promotions. So whatever promotions we were rolling out and spending on, we were spending basis the historical patterns. However, now with Oracle Demantra, we can measure the return on trade investment for every promotion & market thereby making informed decisions.
What kind of benefits has Godrej witnessed post the Oracle implementation?
One of the greatest benefits is that we can measure the performance of our trade spend and that too at a very granular assessment, which is made possible today with Oracle Demantra. It goes down all the way to the retailer level. We are also able to measure the historical as well as the future impact. The benefits that we are trying to drive through these insights is to reduce our trade spend yet maintain the level of sales. We are seeing huge advantages and in future we would be able to share some quantifiable data too. However, what stands out is the analytics led approach, which is helping our business growth and driving productivity for us.
We can proudly say that as a consumer products company, GCPL is one of the first organizations within this industry to have implemented a technology solution like this in both traditional trade market as well as modern trade. We went through a lot of planning and today, we are ready to take it to next level, where we are looking at trade promotion optimization as the next focus area.
The retail sector is adopting technology in a big way. What are your thoughts on this trend? Do you think the industry at large would benefit from it?
Technology is an obvious answer to the challenges our ecosystem faces today and it’s undebatable. Consumers stand to gain the most from this technology led transformation that is sweeping the industry as this would ensure that consumers have access to the right product, anytime that they want. The benefit for the retailer would be the operational efficiencies. That would mean that the retailer would also be able to connect better with their end consumers and would be able to understand them better. The third place in the ecosystem is for the manufacturers like Godrej. It is inevitable for us to embrace technology, because unless we do that, we will not be able to understand our consumers which includes our partners and retail partners. We have made a good start with our technology partner Oracle and we see this relationship evolving into bigger better benefits for our business growth in future.