The sector is currently facing tremendous pressures due to several crucial factors, such as changes in consumer behavior, a highly competitive business environment that’s reshaping the marketplace, and the emergence of a “digital era” fueled by analytics and Big Data. These issues expose the limited capabilities of the traditional retail processes and require retailers to relook at the existing strategies and operating models to overcome the market uncertainties.
In this light, driving a complete rethinking in Revenue Growth Management (RGM) strategies and practices is essential for creating new value in the retail industry. Following its principles, many enterprises can ensure considerable topline growth and bottom-line profitability, resulting in improved performance.
In this blog post, let us explore the key reasons to implement a retail RGM platform for shifting to the new paradigm and building core business capabilities to gain a competitive advantage.
Reasons to Implement Revenue Growth Management in Retail
There is no doubt that revenue growth management should be prioritized if retail businesses wish to keep pace with the changing marketplace. An efficient RGM program with retail analytics solutions strengthens business plans, builds confidence, and establishes a healthy topline. Here are five specific reasons why retail companies need to implement RGM:
- Business Risks
The need for organizations to sustain positive revenue growth cannot be underestimated because a sudden and long-lasting decline in revenue growth can result in dire consequences striking down even the most exemplary enterprise. Under such circumstances, if the management is unable turn around the situation, the odds are that the organization will never again witness a healthy top-line growth.
In this light, Retail analytics solutions provideholistic data visualization and use advanced analytics and AI-led decision intelligence to make prescriptive recommendations to help your businessesbuild new capabilities for sustained and positive revenue growth.
- Promotion Management
The advent of the internet era has led to customer access to vast data across several touchpoints such as social media, brand websites, online marketplaces, and so on. Traditional promotional approaches are failing, as they are unable to create customer-focused marketing campaigns.
RGM optimizes and manages traditional promotion activities by incorporating a myriad of digital data capabilities leveraging customer analytics solutions to put forward a holistic view of consumer behavior. Furthermore, analyzing this consumer behavior enables retailers to create personalized promotions depending on the preferences of the micro-segments resulting in higher conversion rates.
- Pricing Adaptation
Pricing is one of the crucial aspects of the retail sector. Final purchase decisions are based on the price of a product or service. The pricing strategy is instrumental in shaping the brand image and perception in the consumer’s mind. Therefore, deciding on the pricing strategy is not just math. Instead, it involves analyzing other factors such as the target customer pool and potential competitors.
An RGM platform uses data analytics to evaluate the product performance potential in a specific market and aligns the pricing strategy along the same line. Smart retail businesses can also collect data across retail distribution channels using trade promotion management algorithms to monitor the impact of pricing strategy on revenue growth and brand performance.
- Brand Positioning
Today’s customer-driven marketplace and dynamic business environment leave the customers with too many choices. Unfortunately, due to ineffective brand positioning, customers are confused between your brand and your competitors, resulting in a potential business loss for your business. Brand positioning is extremely critical for distinguishing a brand from its competitors in the customers’ minds.
A retail revenue growth management platform optimizes trade promotion operations and helps brands stand out from the competition by creating and executing the right promotions at the right time.
- Organizational Alignment
An efficient RGM process builds enterprise consensus. With adaptive pricing and optimized distribution and assortment strategies, RGM solutions are tailored to deliver topline results and drive organizational alignment.
Internally, the platform ensures the business teams, divisions, and functions are aligned along the same lines to drive impact at the last mile. Externally, an RGM connects companies, customers, and stakeholders to act on revenue opportunities for making a lasting impact.
The Bottom Line
Although this incremental journey towards the new paradigm may be slow, it is an unavoidable path for modern retail businesses to thrive in the hyper-competitive business world. Tredence ignites revenue growth at speed and scale in the retail sector with custom-built revenue growth management software powered by AI-driven prescriptive analytics to improve bottom-line savings and drive topline growth.
