In the CPG world, the best way to move your company forward is to analyze data. Unfortunately, with so much information at your fingertips, it can be hard to digest it all. Rather than spending countless hours poring over numbers and spreadsheets, it’s best to know how to narrow your focus.
Fortunately, we’ve compiled a list of the best practices for retail analytics in 2021. Following these practices will give you much better peace of mind and ensure that you can build a stronger foundation for your brand.
Using the right tools
There are two sets of tools that you can use for retail analytics. The first is data capture, where your raw information gets collected and processed. Some examples within this first set include:
- Point-of-Sale System – You can run various sales data reports no matter what kind of setup you have. You can get breakdowns of the number of transactions, the number of sales of specific items, and time stamps for each sale.
- Email Marketing Programs – Email marketing is an effective way to get more customers to interact with your brand. The information here includes open rates, click rates, and bounce backs.
- In-Person Tracking – Not all retailers have systems to track customer movement throughout the store, but those that do can provide valuable insight into shopping habits.
The second set of tools is data analysis, and here is where you need to be careful. As a smaller CPG business, you can’t afford to make mistakes and waste time on tools that don’t help your bottom line. Bigger brands have teams of analysts and researchers who can turn raw data into actionable goals. If you don’t make the right decision, you could pay a steep price.
Fortunately, Byzzer by NielsenIQ is one of the leading analytics providers, and we specialize in smaller brands like yours. You can check out our CPG reports, which analyze and digest your data to turn it into better profit margins.
Create objectives and goals
Looking at retail data insights doesn’t mean anything if you don’t have an objective in mind. Rather than taking a data-first approach, it’s better to point your brand in the right direction and then use the data to propel you forward. Some goals could be:
- Increasing total basket size
- Increasing market share within a specific retailer (or market)
- Selling in new retail outlets (distribution)
- Adding more products to your portfolio
- Boosting customer loyalty
If you’re still fresh to the industry, don’t bite off more than you can chew. Instead, start with simple objectives and work your way up. Taking a goal-oriented approach ensures that you’re always pointing to your brand’s true north.
Use historical data
As the saying goes, “in order to know where you’re going, you have to know where you’ve been.” Historical data provides a valuable foundation from which to move forward. Even if you’re new, you can draw from the limited sales information you do have.
Better yet, you can see how well your current data aligns with your list of objectives. Even if your reports are incomplete right now, don’t let that discourage you. Don’t worry too much about gaps or missing information. Instead, figure out whether it’s vital to have in the future. If it is, figure out how to collect that data and merge it with the rest.
When looking at historical data, it’s best to pay attention to micro and macro trends. You want to know how customers are shopping for your products on a daily basis, as well as weekly, monthly, and seasonally. This way, it’s easier to anticipate needs and deliver the right amount of products at the right time.
Compare metrics and reports
One trap that many small companies fall into is analyzing data in individual silos. While each report is valuable in its own right, you have to be able to look at the bigger picture. One easy way to do this is to compare reports and metrics side-by-side.
Some examples of retail data insights you should be paying attention to include:
- Velocity – How well are you selling where your products are available?
- Incremental Lift – How well are your promotions adding to your bottom line? Are they cannibalizing your sales or helping them?
- Category Level Data – How well is your brand competing against others in the category? Byzzer by NielsenIQ’s Brand Ranking report can show you this information quickly and efficiently for a snapshot of your brand’s health.
As you analyze your information, you’ll start to notice patterns, as well as causes and effects. For example, did a promotion boost your share within a category? Did your share stay increased after the promotion ended, or did it go back to what it was before? Knowing how these metrics interact and influence each other is crucial.
Look for trends
Market trends can be fickle because they often ebb and flow. However, you can capitalize on them better if you can spot trends before they crest and eventually fizzle out. Here is where macro-level data and insights can be irreplaceable. One example is the Brand Ranking report we mentioned above.
This report is ideal for spotting trends because you can narrow your search by niche, such as organic or all-natural brands. By looking at different data sets within various categories, you can see which ones are trending up or down. The best part of the Brand Ranking report is that you don’t need to have much of your own historical data for it to be valuable.
Health and wellness-focus brands should also consider the suite of Total Wellness reports. While filtering by attributes like organic and natural are standard fare across Byzzer by NielsenIQ’s reports, Total Wellness reports offer hundreds of sustainability, “clean”, conscious consumer, wellness, and more-related product attributes to draw data on.
Offline and online data
While online data is easier to collect and analyze, it only provides a partial view of what’s happening in retail stores. The best way to understand your customers and their shopping habits is to see them in action. You can tell a lot more about why someone bought something when watching how they interact with the product. Was it an impulse purchase, or was it on a list? Did the customer compare similar products before deciding? You can’t get this data from an online report.
Thankfully, Byzzer by NielsenIQ works with Field Agent to get that kind of insight for your brand. Field Agent conducts site audits and delivers easy-to-digest reports. These audits work well for shopping habits as well as promotional contracts. For example, is a retailer showing your promotional material the right way and selling your products for the agreed-upon price?
You can read more about these audits by downloading our white paper here.
Get actionable business insights
Unless you have teams of analysts at your disposal, you likely don’t have time to sift through reams of data reports. Instead, you can let Byzzer by NielsenIQ do all the hard work for you. Our reports are comprehensive yet easily digestible, and we’ll tell you what to do with this information. With all the guesswork eliminated, you can focus on delivering a better customer experience and building a stronger bottom line.
Find out more about our retail analytics solutions here.