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The Trade Spend Game
AI is taking over grocery stores, starting with trade spend.
Kieran Ryan
July 16, 2024
Good morning, Nerders.It’s Wednesday, July 17th. In today’s newsletter, we cover:
AI is taking over grocery stores, starting with trade spend
The rise of new art buyers
More service businesses are charging no-show fees than ever before
TODAY’S STORY
When you see something on sale at a grocery store (e.g., 2 for $5, $1 off, etc.), the brand pays for the discount, and most of the time, the retailer is just passing the savings on to you.
The industry refers to this as trade spend or trade promotion. Consumer-packaged goods (CPG) brands bake trade spend into their cost structure for free fills, display fees, sale markdowns, coupons, circulars, and digital ads.
CPG brands worldwide typically invest 20% of their revenue annually in trade spend. Best-in-class trade spend optimization can return more than 5x ROI, but brands often lose money on these promotions.
There is a huge opportunity ($150 billion U.S. market annually) to optimize trade spend.
Some CPG brands are starting to leverage AI to translate consumer-related data into insights that increase prediction accuracy and optimization times on their trade spend. Anecdotal evidence shows this can unlock more than a 10% increase in brand sales.
AI-optimized trade spend, the growth of private label brands, and smaller stores are some of the significant trends shaping the future of the grocery industry.
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DATA BYTES
While inherited art is largely legacy wealth, there is a lot of interest among all wealthy Americans in building a collection of art
83% of young adults (ages 21-43) say they currently own or are interested in owning art
Millennials are 2x as likely as Boomers to view art as a financial asset, blurring the lines between collectors and sellers
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OUR PICKS
Here are today’s recs to help you live a smarter life…
1. 21-piece classic granite set.
This reinforced die-cast aluminum kitchen pots and pans set ensures durability and reliability for long-term use while still maintaining a lightweight design. $100 off for Prime Day.*
2. Don’t make golf harder; play a softer ball.
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3. 8x longer freshness.
Prepare for your summer trips (e.g., hiking, fishing, camping) by vacuum-sealing your food to ensure maximum freshness.*
PREVIOUS STORIES
Top 25 Startups to Watch (and Work for) — Find out who makes the list for 2024.
🍎 Gen Z's Grocery Hack — Memberships for shoppers aged 27 and under represent the fastest-growing customer segment at Walmart-owned Sam’s Club.
Inflated Auto Loans: Dealerships Big Secret — An alarming amount of people get their auto loans from the dealership out of convenience and do not realize their rates are artificially high.
Why are Investment Firms Buying Farmland? — Investment firm farmland holdings increased 800% to $16.2 billion between 2008 and the second quarter of 2023.
True Religion’s Renaissance — True Religion's shift in customer demographics is leading to a major revival of the brand.
To read the web version of previous stories, click here
If you have any comments or feedback, just respond to this email.
Thanks for reading,
Kieran & Justin Ryan
