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the interest of brand protection has increasingly become a taboo exercise within a society that prioritises corporate social responsibility. The added challenge Marketing budgets are often the first to be cut as leaders seek to yield noticeable bottom line returns quickly. In the short term, this can help. However, economist and “the godfather of effectiveness” Peter Field (backed by numerous studies) has warned that while cutting advertising budgets is a temporary fix to a short-term deficit, it could put brands at a significant competitive disadvantage during the recovery period. Innovate while you operate: marketing and supply chain partnership Within every challenge awaits opportunity. Forward-thinking business leaders view disruption as an opportunity to innovate and untether from stale and unchallenged ways of working. One such emerging innovation is the partnership between marketing and supply chain in a strategic corporate trade transaction. In such a transaction, a business essentially trades the excess inventory collecting dust in their warehouse in exchange for a higher value in media. Paying for what you need with cash alternatives is a powerful way to uncover untapped value. We’ve seen it make headline news at the consumer level in the form of bartering. The commercial level adaptation of barter, known as corporate trade, is soaring in popularity among business leaders around the world. In Canada, Hubert Wat, former VP marketing for Rocky Mountaineer rail tours, spoke to CPA magazine about corporate trade in 2014. “It’s a win-win for everyone,” he was quoted as saying. “We got something we needed – visibility and ratings – by leveraging our own assets and inventory. I could have liquidated assets and got less than retail price. Instead I got full retail value and used media credits to buy what I wanted to anyway.” Here in Australia, Henkel has successfully leveraged corporate trade to derive more value from excess inventory. “This has provided a unique opportunity for our business to manage excess stock while providing a value outside of traditional sales,” the company said. “In an aggressive promotional environment, it allowed us to continue long-term brand support via the trade credit offer while also countering a challenging stock problem and opening the door for a new- found value to the product.” Since this type of trading transaction is more complex than barter or a direct swap of goods, companies enlist the help of corporate trade organisations, such as Active International, which has a unique mix of product liquidation and media planning and buying expertise. In the UK, 02 Telefonica, a telco organisation, has worked with Active International for more than seven years. “Over this period, \\\\\\\[Active has\\\\\\\] helped O2 gain over £10 million of new business contracts from a number of our key corporate targets by allowing them to part fund the cost of working with us in product,” 02 Head of Creative Simon Valcarcel said. The result? A proactive and strategic approach to achieve more with less: recovering value on unsold product. Corporate trade offers a safeguard approach against cuts to demand- generating investments such as media and promotion. In an uncertain economic climate, this is an innovation that enables businesses to proactively address challenges and achieve a level of clarity and predictability across several areas. Ways corporate trade helps businesses achieve more Financial benefit A useful tool to mitigate risk and avoid or recover write-downs on unsold stock. When demand for product is uncertain, you can always count on at least three times market value using corporate trade. Sales guaranteed A predictable buyer of your products means predictable achievement of sales targets. Sales teams shouldn’t spend time putting out fires and discounting overstock. Instead, their focus should be on selling high priority, high margin products to tier one customers. Logistics relief Clear warehouse space for faster moving, newer product. Seasonality and Covid A strategy to manage seasonal inventory that could not be bought when stores were closed during lockdown. Marketing boost Budget cuts can be replenished with credits, or no-cash media campaign options. Count on predictable marketplace coverage and guaranteed ROI. Speed Use it as a short-term tactic to quickly bridge the gap between current stock and cashflow problems, or as a long- term strategy to pave the way through a successful recovery period. Maintain predictable sale forecasts and consumer share of mind through consistent media presence. Consider the experience of Jacobs Douwe Egberts Australia: “The service is invaluable to our business. Importing much of our product from Europe, some of which has limited shelf life, brings a major logistical challenge. Being able to monetise excess stock saved prevented write-off costs. And having dollars to reinvest behind out brands and bolster our budgets brought substantial benefit.” Covid-19 is not the first and won’t be the last marketplace disruption in our lifetime. We see opportunity in every challenge. Sometimes that innovation can be as simple as dismantling silo mindsets to plan the best way forward. Businesses that are currently scenario planning and seeking to manage cashflow and risk through the crisis should consider marketing and supply chain collaboration. The approach is simple: innovate while you operate to achieve more in the recovery period. CORPORATE TRADE About Selina Martin Since joining Active in 2015, Selina has built a strong commercial team and helped shape Active’s corporate trade offering. Selina’s experience spans a range of media, including TV, cinema, radio, magazines, digital and retail media. About Active International Active International is a global commercial innovation company and business solutions partner with 36 years of global operations. Active is leading the corporate trade industry across 14 countries, backed by a team of extraordinary talent, financial experts and media mavens in each market, and well-established relationships with clients, media vendors and media agencies. For more information, visit activeinternational.com.au. OCT, 2020 RETAIL WORLD 67