What are CPG Data Analytics?
CPG analytics is the collection and interpretation of data you collect from various sales and CPG marketing sources. Without data analytics, it’s impossible to turn data into actionable 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, there are two types of data your brand should be collecting. These 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. This includes 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.
Retail measurement data can’t tell you exactly who is doing the purchasing, so you can use 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?
How can CPG Analytics Improve Efficiency?
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. This will streamline your operations and sales methods. You can even use retail data to gain market share.
The process works like this:
- Sell Products
- Collect Retail Measurement and Panel Data
- Make Adjustments
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.
Suppose a product isn’t selling well in a specific market or storefront. You can cut it and replace it with a better-selling item, or take it off your inventory to streamline your operational costs.
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:
Best CPG Analytics Tools
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
There are many CPG pricing strategies at your disposal, so it can be hard to know where to start. 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’s Smart Pricing Action Report gives you the lowdown on your competitors’ every day and promoted prices. You’ll 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.
One of the coolest features of the Smart Promotions Action Report is its recommendations. 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 to Use CPG Analytics
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.
Pick 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. Contact us today to see what our tools can do for your business. You’ll also want to read about the top CPG trends for small businesses in 2022.
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