Why are toll roads used?

TLDR: Toll roads saved brands from having to develop their own planograms and get to market faster.

In traditional brick-and-mortar retail, brands allocate trade spend - often the second largest item on their P&L - to offer temporary price reductions, rebate programs, and other promotions as well as gain preferential shelf display locations (slotting) and circulars.

After dramatic retailer consolidation (Kroger/Meyer and Albertsons/ American Stores mergers) and the fragmentation of mass media audience, suppliers were tasked with growing sales for an entire category, not just their brand. Circulars were a reliable place for retailers to get the attention of shoppers in a specific location.

To put a product in a circular, a retailer needed, minimally, an image of the product, the product title, the price, and other basic information.

Similarly, to put a product into a shelf planning system, a retailer needed all of that plus the full set of GS1-compliant planogram images.

The trouble with the approach taken by Grocery and Mass retailers is that each retailer picked a different third party, the result being that each FMCG manufacturer was ultimately forced to work with all of them - that is, paying for the same service over and over and over. Toll roads saved FMCG brands from having to develop their own, in-house planograms, allowing them to get to market faster.

Today toll roads cost brands needlessly

So in the year 2010 if you were, say, Kellogg, you’d have to pay for the same service for the same SKU multiple times: ItemMaster to produce planograms for Peapod, Gladson to produce planograms for Albertsons, Kwikee to produce planograms for Walmart, Brandbank to produce planograms for Tesco, and so forth.

In the years since Gladson, Kwikee, ItemMaster, Brandbank and others arose to plug the “planograms-and-basic-content-for-circulars” problem, a number of other technologies and capabilities that allow brands to exchange information with retailers have arisen. More modern approaches also take digital shelf merchandising into account, for which traditional planograms are not particularly effective.

Get the full report