Strategies for Effective Trade Promotion Optimization

Trade promotions represent one of the largest and most complex investments for CPG manufacturers. While promotions include any short-term activity designed to boost visibility or sales, trade promotions refer specifically to activities funded or co-funded with retailers to drive sales, as a consequence of discount, visibility, and distribution. They are a core lever for influencing retailer behavior and shaping category growth.

The importance of effective trade promotion optimization continues to grow. The Buynomics’ Future of RGM Report found that more than six in ten organizations (61%) have selected trade promotion effectiveness and optimization as their top area for increased investment in 2026. 

Promotions already make up a large portion of Consumer Package Goods (CPG) retail sales volume, up to 28-50% across CPG categories in Europe, yet less than half of trade promotion spend yields positive ROI. This gap between investment and return makes it clear that there’s a need to improve ROI measurement and planning discipline in trade promotions. 

In this article, we will cover the main struggles Revenue Growth Management (RGM) professionals face with trade promotion analytics and optimization, and how these challenges can be overcome with the right predictive toolset.

What Are the Main Challenges with Trade Promotion Optimization?

The main challenges with trade promotion optimization typically stem from:

• Limited data visibility
• Manual planning processes
• Execution misalignment
• Insufficient collaboration between manufacturers and retailers

All of these factors make it harder to connect promotional activity with measurable ROI. Without the right tools to track performance and understand what worked and why, manufacturers risk investing heavily in trade promotions that underperform or fail to execute as planned. Modern

trade promotion optimization shouldn’t just rely on historical data or spreadsheets; it should be driven by predictive insights that offer a real-time view of market conditions.

Below, we’ll dive deeper into some of the key challenges RGM teams face when aiming to optimize their trade promotions.

Analyzing Trade Promotion Effectiveness is Difficult

Promotion planning is only as strong as the data behind it. Many manufacturers still rely on incomplete or inconsistent data, which makes it challenging to accurately measure past promotion performance, understand the true drivers of uplift, or plan upcoming promotions with confidence. 

Because promotions rarely occur in isolation, it is tough to disentangle actual promotional impact from external factors like competitor activity, meaning many “successful” promotions may simply have benefited from contextual market conditions rather than strategy. Studies show that 40% of companies cite issues with data cleansing, harmonization, and staging as significant barriers to effective trade promotion optimization and analytics.

The difficulty in trade promotion analytics increases when considering the impact a promotion has on other products or the sales dips that often follow a promotion’s end. Without the right tools to measure these post-promotion effects, manufacturers struggle to account for stockpiling or reduced shopper demand in the weeks after. 

For RGM teams aiming to drive measurable ROI, this lack of precision, both during and after promotions, remains one of the most critical gaps in modern promotion analytics. Advanced tools that can simulate real shopper behavior allow manufacturers to accurately model and predict these effects, ensuring better forecasting and more effective promotional strategies.

Trade Promotion Execution Complexity

Another key challenge when it comes to trade promotions is the execution gap. In many cases, what is forecast to take place is not always what gets implemented. Research has found that 61% of organizations face difficulties executing promotions as planned.

Sub-optimal tools and software make it hard for RGM teams to demonstrate the value of their promotions. Spreadsheets cannot account for dynamic market and category changes that influence promotion outcomes, which can lead to inaccurate forecasting and an inability to model how a promotion will interact with broader portfolio or category plans. 

 As a result, retailers may choose to adjust or skip a planned promotion based on their own strategic or operational priorities. When this happens, it can lead to missed sales opportunities, as retailers may prioritize other brands or promotions that seem more aligned with their goals. This is why joint planning and flexibility on both sides are so important; it’s crucial to find ways to recover those missed opportunities together, something we cover later in the next section.

"There are times when a retailer may need to adjust or skip a planned promotion based on their own strategic or operational priorities;  that’s completely understandable. But when it happens, it can leave a gap between forecasted and actual volumes. That’s why joint planning and flexibility on both sides are so important, to find ways to recover those missed opportunities together.”

- Adam Hartnell, Principal Sales Engineer at Buynomics (ex-Pernod Ricard & Unilever)

How RGM Leaders Can Future-Proof Joint Business Planning with Pernod Ricard

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Collaborative planning, backed by predictive data, ensures that both manufacturers and retailers can align on goals in advance, minimizing execution gaps and allowing for quick course corrections when necessary.

Faster predictive insights on SKU, portfolio, and category levels are invaluable, as they can mimic actual shopper behavior. With these insights, RGM teams can effectively negotiate with retailers, ensuring that all parties are aligned and that promotional investments deliver measurable and sustainable value.

The Need for Better Joint Business Planning

Given that many organizations plan to increase investment in trade promotion effectiveness and optimization in 2026, it’s clear the focus is shifting from volume to value. But for real progress, better tools and clearer visibility are needed.

The effectiveness of trade promotions depends on aligning the objectives of all three stakeholders: manufacturers, retailers, and shoppers. While manufacturers must ensure that promotions support brand and financial goals, retailers are focused on driving category performance, store traffic, and shopper satisfaction, while the shopper aims to get the right products for the right price. 

As retailers are navigating their own pressures, from balancing promotional calendars across categories, to meeting shopper expectations, close collaborative Joint Business Planning (JBP) offers a structured path forward. With the right tools and collaborative preparation, manufacturers and retailers can model multiple promotional scenarios, quantify ROI in advance, and align on goals before activation. Our Buynomics webinar on collaborative JBP goes into detail here:

“A really big part of a joint business plan is understanding, for the amount that you're paying for visibility and promotion space, what are you getting in return? RGM teams can really help here, by modeling outcomes with precision so you’re not just negotiating on assumptions, but on financial clarity.”
– Adam Hartnell, Principal Sales Engineer at Buynomics (ex-Pernod Ricard & Unilever)
Moving from Negotiation to Collaboration: How RGM Leaders Can Future-Proof Joint Business Planning with Pernod Ricard

In practice, multiple promotions often compete within the same category in a given week, and shopper response is influenced not only by price but by execution timing, visibility, and assortment context. To optimize trade promotions, integrated joint planning is essential. When promotional design, funding, and forecasting are developed collaboratively and grounded in data, manufacturers can accurately model and forecast outcomes and share them with retailers. This approach ensures that both sides are aligned, reducing execution gaps and maximizing ROI.

By moving beyond spreadsheets and manual tools, predictive and prescriptive tools enable teams to simulate real market conditions and accurately assess the impact of each promotional strategy. With these insights, manufacturers and retailers can confidently plan, execute, and measure promotions that drive growth while meeting both commercial and shopper objectives.

It’s also important to remember that while promotions are a key driver, they are just one of five RGM levers alongside pricing, price pack architecture, mix, and trade terms. To realize the full value of RGM, these levers must be evaluated holistically and interdependently using transparent tools that align internal stakeholders and external partners. This enables negotiations to become more informed, forward-looking, and grounded in shared insights, creating the basis for more collaborative conversations and joint growth.

Take the First Step to Better Trade Promotion Optimization

AI-powered tools such as Buynomics’ Virtual Shoppers AI empower teams to simulate how real shoppers will respond to different promotional strategies under real-world market circumstances. This level of clarity allows both sides to predict revenue on the category, portfolio, or individual SKU level, and design promotions that drive category growth without margin erosion.

Critically, these insights are grounded in clean, structured data reflective of true shopper behavior, not just historical averages. With this foundation, JBP evolves from static calendars into dynamic, scenario-based planning, enabling fact-based decisions that meet commercial objectives and shopper expectations.

Buynomics helps RGM leaders turn trade promotions into a strategic growth lever, with agent-based simulations that predict real shopper behavior and help to design promotion plans that drive revenue. 

Start by filling out our RGM Maturity Assessment, a short survey to receive personalized, actionable next steps to accelerate your shift from descriptive to prescriptive RGM.

For even deeper insight into how Buynomics can help you optimize promotions and all five RGM levers, request a tailored demo with our team today.