The Complete Guide to CPG Data Analytics [2021]

By Chelsea Stone

15 min read

June 11, 2021

The consumer packaged goods industry is driven by data more than anything else. You need to know where your products are sold, how many items you have on shelves, and how many units you’re moving. However, while it’s easy to collect this information, understanding the data and using it is much more challenging.

Fortunately, with the right CPG data analytics tools, you can utilize data to propel your brand forward and, hopefully, capture more of the market. Let’s dive into the world of CPG analytics and see how it can help your business.

 

What are CPG analytics?

Simply put, CPG analytics is how you interpret the data you collect from various sources. Without these analytics, it’s impossible to distill data points into meaningful information. Identifying your % ACV and total distribution points is great. Now what do you do with that information?

Analytics can be broken down into various categories, such as sales data, action data, and observational data. Each segment provides a clearer picture of where your business is at and where it could potentially grow.

For example, if you notice that your TDP is lower than it should be within a specific market, you can identify areas for improvement. Are there retailers you’re not selling in? How well are your products promoted in the stores where you do have a presence? Is it more profitable to expand your product line within the same stores or to reach out to other storefronts? Until you can analyze your data, you’re essentially flying blind.

Retail Measurement Data vs. Panel Data

While you can segment CPG retail analytics into smaller buckets, the two main categories are retail measurement data vs. consumer behaviors, as illustrated by retail measurement data and panel data. Here’s a quick overview of each classification.

Retail Measurement Data

Every time one of your products gets scanned at a register, you can see a wealth of information, including price, volume, promotions, and more. This point-of-sale data is valuable for manufacturers big and small because it allows them to understand key performance metrics, as well as competitor insights. 

For example, let’s say that a small pet food brand wants to position itself better within the market by studying the competition. With Byzzer’s Brand Ranking Report, the company can look at RMS data like total dollars sold, dollars sold per distribution point, and the percent change in the average price. From there, the manufacturer can develop a better go-to-market strategy. 

Panel Data

While you may not know from retail measurement data exactly who is doing the purchasing, panel data can fill that gap. Companies like NielsenIQ curate and provide critical data points about consumers and their shopping habits. You can get breakdowns for specific markets, demographics, and product categories. Panel data analysis allows you to figure out which items resonate the most with your customers so that you can capitalize on them. This data is further segmented into various sections, such as

  • Penetration – How many households are buying your product in each market?
  • Buying Rate – What is the total spend per household over a given period (i.e., monthly, quarterly, etc.)
  • Purchase Frequency – How often do households buy your products?
  • Purchase (or Basket) Size – What is the average spend for your products on each shopping trip?

 

Byzzer shopper sales decomp tree screenshot

Byzzer’s Shopper Sales Decomp Tree breaks down panel data to its component pieces to simplify your sales data, identify challenges and opportunities, and take action accordingly.

Learn more about panel data or read more on the differences between panel and POS (RMS) data.

 

How can CPG analytics improve efficiency?

When trying to figure out growth opportunities for your business, data collection and analysis will be your best friends. Historically, it’s notoriously difficult to predict how shoppers will act in a given situation. Even those who participate in focus groups won’t know exactly what they’ll do when they’re at the store shopping for various products.

Instead, analyzing real-world data will give you a much clearer picture of how to move forward. Overall, with CPG data analytics, you can put your brand into a cycle of continuous innovation and development, which will only streamline your operations and sales methods. The process works like this:

  • Step One: Sell Products
  • Step Two: Collect Retail Measurement and Panel Data
  • Step Three: Make Adjustments
  • Step Four: Repeat

This overview is a bit broad, and you can narrow each step into specific actions and quantifiable datasets. However, the primary goal of analytics is to ensure that you’re always laser-focused on the products that sell the most and offer the best option for your bottom line. 

Suppose a product isn’t selling well in a specific market or storefront. In that case, you can cut it and either replace it with a better-selling item or take it off your inventory to streamline your operational costs. You can get free category data instantly by trying our CPG Category Analyzer

 

What are some important CPG data analytics KPIs?

Key performance metrics are the cornerstone of data analysis. Otherwise, it’s impossible to know whether a specific dataset is good or bad. Here are some high-performance KPIs that your business should focus on when conducting analytics.

Promotional Lift

Product promotions can be an excellent way to boost sales. After all, who doesn’t love a good discount? However, what you need to figure out is if your promotions add value to your brand or detract from sales you would have made anyway. These datasets can be described as incremental and non-incremental volume. Those sales attributed to the promotion are incremental, while those that aren’t part of the promotion are non-incremental.

In addition to looking at incremental volume, you want to see if other tactics are driving the promotional sales or not. For example, if you expanded to a new market or retailer, is that increasing your sales as much or more than your promotion? Perhaps one store offers better support that helps your products get noticed more easily, whether there’s a promotion or not.

Speaking of support, you need to make sure that your retailers are following through on their side with your promotional strategy. For example, if you paid to have your products placed at the front of the store and they’re in the back, that will hurt your sales. 

The best way to determine if a retailer isn’t delivering on a promotion, you can filter your data down to a specific market or region to make it easier to pinpoint the problem. From there, you can reach out to the retailer and figure out a solution. Otherwise, you could take a hit even though your promotion tactics are sound. 

Comparing these datasets allows you to determine the effectiveness of your promotions, and they can illustrate where you can make specific changes.

Share of Category

While it would be fantastic if you could be the only brand selling a specific product line, the fact is that there are plenty of competitors out there. Share of category data can help you see where you fit into the broader market and whether there’s room for aggressive expansion.

When looking at your share of category, it’s essential to know that each one can be broken down into various characteristics. For example, if you sell energy drinks, you can look at attributes like can size and see how that influences sales outcomes. From there, you can make more informed decisions to determine how you can increase your share of the category.

If you’re a small CPG brand, it’s easy to get discouraged when you see major brands outpacing you at every turn. However, by looking at unique characteristics and the driving forces behind sales growth, you can figure out how to capitalize on them. Using our energy drink example, if 16-ounce cans are sold the most, and you currently sell 12-ounce cans, you could increase your can size or add that sized can to your portfolio of products and see if that boosts your sales.

You can also get creative with markets and characteristics. Some brands can even create a whole new segment from scratch. For example, Oatly essentially created a market by delivering oat milk as a dairy alternative. These days, non-dairy milk is a huge industry, thanks in part to Oatly’s success.

Shopper Loyalty

Loyalty matters a lot in the CPG universe. While you’ll likely get a bunch of one-timers, loyal shoppers will help boost your business in two different ways. First, the customer will keep buying your product over and over. Second, they’ll likely become a brand ambassador and hype your products to people they know, which is free advertising.

When measuring this KPI, you want to break down the number of brand loyalists vs. one-time shoppers vs. switchers. If a brand has tons of loyalty, what are the driving factors behind that? What can you do to encourage the same dedication to your company?

If a product category has many switchers (people who buy based on the product, not the label), there’s more opportunity to breed loyalty. From there, as long as you understand your audience well enough, you can appeal to the switchers and hopefully get them to start buying your items exclusively.

 

Which third-party sources allow for comprehensive CPG analytics models?

It’s impossible to collect and analyze all this data yourself, so you must rely on third-party resources and tools. Fortunately, Byzzer is a comprehensive CPG tool that provides tons of analytical data to help your business thrive. Here are some examples of the resources you can expect from Byzzer:

The Smart Pricing Actions Report

Setting prices on CPG products is challenging because there are so many variables to consider. Some prices do better in certain markets than others. What is your main competitor pricing their products at? What kind of margin do you have to maintain? These kinds of questions can easily keep you up at night. 

 

Byzzer by NielsenIQ Smart Pricing Action Report

Byzzer’s Smart Pricing Action Report gives you the lowdown on your competitors’ everyday and promoted prices so you know exactly how to set yours to be more competitive.

 

Fortunately, the Smart Pricing Action Report from Byzzer can curate all of this data into a digestible document. Instead of having to figure out the variables on your own, Byzzer can do it all for you. Not only can the report give you tons of data about your pricing, but it will also include action items for your team. For example, if your products are priced too high in a specific market, this report will tell you what your price should be instead

The Smart Promotions Action Report

Although promotions can be a valuable tool for CPG brands, they’re a double-edged sword if you’re not careful. A well-executed promotion can give your bottom line a boost, while a poorly-executed one can cut your profit margin short. 

 

Byzzer-Promotion-Smart-Action-C

One of the coolest features of the Smart Promotions Action Report is its recommendations, so you can spend less time sorting through data and jump straight to adjusting your promotional strategy.

 

The Smart Promotions Action Report alleviates the stress of running a successful promotion by showing you when and how to run promotions on specific products. No more guesswork and praying to the CPG gods; now you can have a clear path forward. 

 

How do you use CPG analytics?

As we’ve mentioned, data is useless unless you know how to read and understand it. On a brand level, CPG data analytics should inform you of growth opportunities and where to cut losses and expenses. Remember the cycle of continuous improvement? You can only deploy that with data-driven analysis. Otherwise, you could make adjustments that hurt your brand more than they help. On a more specific level, here are some tips on how to use CPG analytics:

  • Focus on Losses – Rather than tinkering with products or categories that are performing well, focus your attention and investment on sections that are losing money. This way, you can determine whether to cut or correct them and streamline your operations accordingly.
  • Start Small – Don’t try to incorporate analytics into every part of your operations at once. Instead, begin with a specific KPI and figure out how to use it to improve operational efficiency. As you go, make changes to ensure smoother sailing as you move forward. Once you have that process dialed in, move onto the next KPI.

 

Picking the right analytics solution for your CPG company

Byzzer was built from the ground up with small to mid-sized manufacturers. If your growth strategy is lean and mean, Byzzer is the perfect tool for your up-and-coming brand to harness the power of CPG data and analytics.

Byzzer may be right for you if…

  • You’re an emerging CPG manufacturer / brand on a start-up budget
  • You don’t have a huge team dedicated to mining insights – you just need answers to sell more now
  • You want self-serve, real-time insights that give you the most updated data in its simplest form

 

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Now that you understand the value of analytics, see how Byzzer can transform your CPG brand.

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