In the retail and consumer packaged goods (CPG) world, insight is everything. With insights into shopper motivations and behaviors, brands and retailers can anticipate new consumer trends. With insight into store-level performance, brands can identify category leaders and emerging competitors. Insights into category and market dynamics can reveal potential for expansion or innovation.
With all the upheaval in the industry over the past two years, both CPG brands and retailers should be examining how they arrive at those insights. Companies that rely on instinct, anecdotal evidence or media coverage to understand their performance, their competitors or their categories are at a competitive disadvantage in an ever-shifting marketplace.
Too often, this is the approach taken by emerging CPG brands, which may not have the resources or the personnel to dedicate to retail data analysis. But given the uncertainty and complexity affecting retail operations today, the need for in-the-moment visibility into sales performance has never been greater. Access to current, accurate retail data allows CPG brands and retailers alike to identify threats — either systemic or competitive — before they become critical, and spot opportunities for growth early and often.
In 2022, retailers and CPG brands of all sizes should explore ways to utilize retail data more efficiently and generate the reliable insights they need to compete. Here are four ways they can use data better in the new year:
1. Identify opportunities for growth and differentiation.
Every brand has some method for tracking its own performance. But with retail data that captures category-level performance and sales at individual retailers within different markets, brands can more readily spot opportunities for growth and expansion. The right data sets can show where a brand’s products will have an impact on category sales for the retailers in that market, and where their products will struggle for shelf space. Retail data that’s granular enough will also reveal which product attributes perform best at which retailers, allowing brands to adjust their distribution strategies to optimal effect. These insights are particularly important for emerging brands focused on growth and capturing market share.
2. Make informed, strategic pricing decisions.
Of course, expansion opportunities are only one aspect of brand performance that data can help with. Getting pricing right will be a major priority for brands and retailers in an ongoing inflationary environment. NielsenIQ data identified increases in shipping costs (+300 percent year-over-year), commodity prices (+33 percent YoY) and energy costs (+20 percent YoY), along with a post-pandemic global demand surge as the current drivers of inflation. These factors are unlikely to abate in the first months of 2022, making pricing dynamics a key concern for CPG brands and retailers. Access to data and advanced analytics to project the impact of everyday or promoted price changes at both the market and store level will help brands and retailers optimize their pricing and promotions timing. Using advanced pricing models to identify volume/profitability tipping points as well as potential opportunities to set their brand apart on price will also allow CPG manufacturers to activate this crucial commercial lever.
3. Promote better retailer-brand collaboration.
Retailers and CPG brands have shared goals: selling more products and earning more revenue. To achieve these goals, it helps to be on the same page and looking at the same data. Sharing data leads to more complete insights and more productive relationships. For CPG brands, prioritizing transparency and supporting their claims with objective data helps build trust with their retail partners. For retailers, a collaborative data process helps align on critical metrics and priorities. In 2022, improving retailer-brand partnerships with shared and mutually accepted data will have a positive impact on sales volume, velocity and promotional strategies.
4. Get ahead of consumer trends.
Retail data — shared or not — can also help retailers and CPG brands detect and capitalize on consumer trends early. Subtle changes in sales, pricing or promotional support can reveal emerging tendencies among consumers. When combined with historical models and analysis, these seemingly small shifts can presage a more dramatic change in consumer behavior. Using consumer panel data to understand shoppers' motivations and mindsets can also provide a glimpse into burgeoning trends, as well as illuminate the preferences and priorities that are driving them. For example, one trend NielsenIQ has identified for 2022 is consumers intentionally editing their baskets to favor options that better meet the necessities of health, well-being, value and availability. Without access to store- and market-level category data or consumer panel insights, brands and retailers could overlook this trend and cede share to competitors that saw it coming.
In an industry that has seen more disruption in the past two years than perhaps any time in history, making data intelligence a priority has become an imperative, not a suggestion. Small and emerging CPG brands should seize the opportunity in 2022 to make retail sales data a key part of their product planning, distribution choices and marketing outreach. Those that do will be in a better position to compete, make cost-efficient decisions, and adapt to market changes.
Andrew Criezis is the senior vice president and general manager of NielsenIQ SMB business.
Andrew Criezis is the Senior Vice President and General Manager of NielsenIQ SMB business. He is a subject matter expert in CPG, go-to-market strategy (GTM), retail and brand analytics, global operations, and revenue generation. Andrew spent 8 years at NielsenIQ in senior leadership roles including SVP of Global Sales Operations and Sales Enablement before helping launch Byzzer as its Chief Product Officer in 2020. His long and varied experience qualifies Andrew to speak authoritatively on topics ranging from global product and integrated marketing to sales enablement to retail industry forecasting.