Retail and CPG analytics are incredibly useful tools, and most companies are not taking advantage of them to their full extent. Growth has been slow in the CPG industry in recent years, particularly for the industry’s largest players, and making thorough use of analytics is one way to turn that around. Here are some tips on using CPG analytics tools to increase efficiency and reduce costs.
Don’t collect data without having a use for it: A high percentage of corporations collect data in a variety of categories, such as sales volumes and the effectiveness of marketing campaigns. However, many of them don’t actually analyze that data. It simply takes up space in a database somewhere, providing no useful insights. In order to benefit from the wealth of data available, it is necessary to have a purpose in mind, collect data that is relevant to that purpose, analyze the data, and act on the results. If those last two steps are never performed, the company has simply wasted effort.
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Create a consistent set of data standards: Companies often operate in silos, with departments all collecting and storing data in different ways, and not sharing that data with each other. It is impossible to get an accurate picture of the organization and customers when data is segregated in this way. Having one set of standards across the company allows for easy exchange of data and allows analysts to see the big picture.
Take advantage of data from retailers: It is possible to gain insight into customer behavior even when not selling directly to customers. By analyzing what stock performs better with a particular retailer or in a particular region, it is possible to tailor inventory in each store to better take advantage of that store’s strengths and customer base. It can also help when deciding whether and where to discontinue an old product or launch a new one.
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Don’t be afraid to change stock frequently: After collecting and analyzing data, act on it. If something isn’t selling well, reduce shipments of it, or discontinue it entirely. Change up the product portfolio and track its performance, making new adjustments as necessary. Consider not only quantitative data such as sales numbers but also qualitative data on consumer preferences. Take full advantage of the available data by adapting quickly to changes and learning from past successes and failures. This will provide an edge over less flexible competitors.
Have the proper infrastructure and staff: In order to use analytics effectively, it is essential to have enough resources to support them. If in-house infrastructure and staff are too expensive, there are many cloud analytics services that can be tailored to the company’s needs.
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Target specific customer groups: Targeted promotions allow a company to use its resources more efficiently. Use customer analytics to determine what types of promotions will be most effective with a particular group. For example, offering coupons to a customer who was already going to buy an item at full price will only cost the company money, whereas price-sensitive customers can be persuaded to buy something they would otherwise have decided not to purchase.
Track costs: Internal analytics are just as important as those focused on customers and sales numbers. By monitoring things such as inventory levels, staff levels, and material costs, it is possible to detect inefficiencies and waste. This is another area where sharing data across the entire organization is beneficial, as sometimes resources and costs can be shared across departments.
These are just some of the many ways to take advantage of CPG analytics. By making better use of available data and acting on the insights derived from it, a business can improve both its internal operations and the customer experience. With so many advanced analytics services available, every business can find one that suits its needs.