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Companies must work on effectively building their brands to attract new shoppers and defend themselves against competitors.
To achieve market success in the consumer products industry, businesses must take a variety of internal and external factors into account: quality product offerings, market positioning, competitor tactics, economic stability, and perhaps most importantly, customer needs and wants. The common denominator between these facets of market success? Data.
Quality, accessible, and meaningful data can lay a critical foundation for CPG companies by providing leaders with unique insights to solve many challenges associated with the market success factors listed above. Continue reading to learn more about the key areas where your CPG business should be collecting data in order to improve insights and grow business this fiscal year.
Attracting the Right People
Consumer decision-making has always been a multichannel journey. With a constant influx of new technologies, consumer retailers and manufacturers are facing increasingly informed consumers who are learning to compare products against the competition.
Even so, some things do not change. A study of more than 3,000 shoppers found that 82% of their purchase decisions were made while in-store, 62% made an impulse purchase while shopping, and 16% of their unplanned purchases were driven by in-store promotions. With this in mind, in-store branding has become increasingly crucial. Positive in-store experiences can not only attract new shoppers, but also prevent existing customers from exploring competitor products.
While there are a variety of ways to increase visibility inside retail stores, research shows that the most important factor is assortment of merchandise within stores. Merchandise offerings should be designed based on consumer data that demonstrates which merchandise consistently sells out. By employing this data, manufacturers and retailers can analyze sales and conclude how presence and location of merchandise within stores affects consumer buying habits.
Consumer trends differ between retail channels (hypermarkets, supermarkets, etc.), so the assortment of merchandise should be designed and executed accordingly.
OSA, On-Shelf Availability
On-shelf availability affects both manufacturers and retailers. Studies show that when shoppers find that a product they intended to buy is “out of stock”, 21-43% of consumers will make that purchase at another store, while another 7-25% will not buy the item at all.
Most stocking issues arise due to a lack of demand planning based on consumer behavior. Thanks to “Sell Out & Consumer Behavior” data algorithms, this problem can be addressed through close collaboration between retailers and manufacturers.
SOVI, Share of Visual Impact
In some cases, ensuring an item is in stock is enough to secure a sale. As shoppers become increasingly “visual”, however, priorities shift more towards product placement - eye-level displays in particular.
It is said that "eye level is buy level", and sales trends demonstrate that there is truth to the phrase.. This even holds true for children’s products, which many retailers will place in the “touch level” (lower than eye level), so children are able to reach and touch them.
While display height is important, the percent of on-shelf share, or the number of displays overall compared to competitors, also plays a significant role.
Of course, another important factor is the price. Most shoppers will compare prices before deciding what to buy. Sometimes, manufacturers use specific measures instead of round measures (package counts of 225 instead of 250, for example) to make comparing prices more challenging.
Competition is fierce when it comes to pricing - and less is not always more. In some cases, consumers associate a higher price with quality, and lower prices in certain product categories may even scare consumers away.
The laws of supply and demand indicate that typically, sales increase as a result of a price reduction. It is imperative to be able to measure the efficiency of your promotional pricing to detect which promotions work best, and which promotions result in negative ROI. Beyond price reductions, there are a slew of other promotional deals that can increase sales: On Packs, Gifts, "buy more, save more" promotions, coupons, loyalty points, and more.
SDG Business Insights
Overall, most in-store shopping concerns can be resolved through measurement and analysis of consumer data. The challenge lies in transforming that information into knowledge and using it as an advantage against competitors. SDG Business Insights services can help Consumer Products businesses to face these challenges by:
- Predicting sales to optimize customer service and product availability;
- Automatically creating the best product assortments for retail locations, helping the retailer and manufacturer increase their sales;
- Increasing ROI on promotions with recommendations for the best promotion for each customer at any moment;
- Optimizing sales force execution, ranking the potential of each point of sale and market segment, and defining the Perfect Store Scoring
Increase your company’s sales and decision making capabilities with the help of SDG’s custom data management and analytics services.
View some practical applications in the retail space:
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