Tracking ROI From Promotions Was One Of The Biggest Challenge: Milind Korgaonkar, Godrej Consumer Products

Interacting with BW Businessworld, Milind Korgaonkar, Head of IT (India and SAARC Cluster), Godrej Consumer Products, spoke about how machine learning and artificial intelligence to support decision-making and be able to connect with our channel partners and consumers in a more effective way.

Within this entire manufacturing and retail ecosystem, how would you define the go to market model for Godrej Consumer Products? 

When it comes to retail, India is one of the most diverse and complex markets. Every market and business model require a different lens and a different treatment given the challenges are varied too. It cannot be a one size fits all kind of approach. At Godrej, we sell through all possible channels available in the country but largely we operate in a distributorship model where we sell to distributors and they, in turn, sell to retailers. We work with our channel partners to ensure our products reach every consumer in best quality, at the right price, in the easiest way. The other growing formats are organized retail and ecommerce retailers. 

What were key challenges that you were facing before you implemented the Oracle solution? 

In our industry, the money 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 we wanted to create promotions specific to every retail store based upon their elasticity to promotion discounts.  

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 as 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 cloud 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 point of purchase 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 not only measure the promotions which we are putting into the market, but also measure the corresponding return on trade investment thereby making informed decisions.

What are the tangible benefits that you have observed post Oracle implementation? 

One of the greatest benefits is that we can measure the performance of our trade size and that too at a very granular assessment, which is made possible today with Oracle. 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, Godrej is one of the first organizations within this industry to have implemented a technology solution to understand the impact of the promotions in traditional trade market at such granularity. 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. Currently, we are using Oracle Demantra for trade promotion management but by the end of this year, we will be looking at Oracle technology to take it to the next level to optimize this further.

There has been a lot of conversation around emerging technologies, like artificial intelligence, automation, blockchain. How do you see these technologies impacting you and impacting your industry as a manufacturer?

We are investing significantly in these technologies and Oracle Demantra is just one of those steps where we are using machine learning and artificial intelligence to support decision-making and be able to connect with our channel partners and consumers in a more effective way. The whole paradigm is undergoing change because the consumers are evolving very fast and demanding more. A lot of shopping happens on mobile today, a lot of retailers are becoming very tech savvy, government is taking a lot of steps in transforming the entire ecosystem, a lot of initiatives are happening within the realm of the Digital India space in India. From this perspective, Godrej wants to stay ahead of the curve and be the early adopter, reap the business benefits and lead the way for the industry.