The Power of Data: Retail Analytics Best Practices


The Power of Data: Retail Analytics Best Practices

In today’s fiercely competitive FMCG landscape, mastering retail analytics is not just advantageous—it’s essential for survival and growth. But, many brands are missing the mark when it comes to retail analytics best practices.

With consumers becoming increasingly discerning and market dynamics constantly evolving, FMCG manufacturers must harness the power of retail analytics to stay ahead of the curve. From understanding consumer preferences to optimizing supply chain efficiency, the insights gleaned from retail analytics can drive strategic decision-making and unlock new avenues for success.

Read on to learn the fundamental principles of retail analytics, identify the key tools for maximizing data’s impact, and get some insight into how to use data to build effective growth strategies.

Understanding Retail Analytics

Understanding retail analytics is paramount for FMCG manufacturers aiming to navigate the intricate web of consumer behavior and market trends. At its core, retail analytics involves the collection, analysis, and interpretation of data from various sources within the retail ecosystem. From sales transactions and inventory levels to customer interactions and market trends, retail analytics provides a comprehensive view of the factors influencing business performance. Key metrics and KPIs such as sales velocity, inventory turnover, and customer lifetime value serve as critical indicators, enabling manufacturers to gauge their performance and identify areas for improvement.

Beyond the surface-level metrics, retail analytics also delves into the nuances of consumer behavior, shedding light on purchasing patterns, product preferences, and demographic trends. By leveraging advanced analytics techniques such as predictive modeling and machine learning, manufacturers can uncover actionable insights that drive informed decision-making. From optimizing product assortment and pricing strategies to identifying emerging market opportunities, the insights gleaned from retail analytics empower manufacturers to stay agile in a rapidly evolving retail landscape.

Retail Analytics Tools

Implementing retail analytics tools is a strategic imperative for FMCG manufacturers seeking to harness the full potential of their data. 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. The second set of tools is data analysis, and here is where you need to be careful.

Data Capture Tools

In the era of data-driven decision-making, the importance of robust data capture tools cannot be overstated for FMCG manufacturers. These tools serve as the foundational infrastructure for gathering, processing, and analyzing vast quantities of data from various sources within the retail ecosystem.

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 bounceback.
  • 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.

Data Analysis Tools

In the fast-paced world of FMCG manufacturing, the ability to extract meaningful insights from data is paramount for staying ahead of the curve. Enter data analysis tools—a suite of sophisticated technologies designed to dissect, interpret, and derive actionable intelligence from vast datasets. These tools empower FMCG manufacturers to uncover hidden patterns, identify emerging trends, and make informed decisions that drive business growth. From predictive analytics and machine learning algorithms to advanced statistical techniques, data analysis tools provide the analytical horsepower necessary to navigate the complexities of the modern market landscape.

NIQ’s retail analytics empower emerging brands to make data-driven decisions, enhance customer experiences, and ultimately increase their chances of success in the competitive retail landscape. From pricing and revenue management to assortment and merchandising balancing, our tools let you gain a 360° view of what drives consumers’ decisions and build actionable analytics that generate consistent and accelerating growth.

Ultimate Guide to pricing & Promotion

New Game. New Rules.

Without data, ongoing dynamic economic forces and effects on consumer buying behavior will make pricing and promotion challenging, if not impossible, to get right.

Download our free guide for an in-depth examination of pricing and promotion strategies that are effective today, as well as how these strategies have yielded successful outcomes.

Leveraging Retail Analytics for Decision-Making

Leveraging data for decision-making is a cornerstone of success for FMCG manufacturers navigating the ever-evolving retail landscape. By harnessing the power of data analytics, manufacturers can gain deep insights into consumer behavior, market trends, and competitive dynamics, enabling them to make informed and strategic decisions. Whether it’s identifying emerging consumer preferences, optimizing product assortments, or fine-tuning pricing strategies, data-driven decision-making empowers manufacturers to stay agile and responsive to changing market conditions.

With that in mind, here are 5 key ways to leverage data for decision-making:

1. 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.

2. 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.

3. Compare Metrics and Reports

One trap that many brands 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?

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.

One key aspect of leveraging data for decision-making is the ability to forecast demand accurately. By analyzing historical sales data, market trends, and external factors such as seasonality and economic conditions, manufacturers can develop robust demand forecasting models. These models enable manufacturers to anticipate fluctuations in demand, optimize inventory levels, and minimize stockouts or overstock situations.

Additionally, data-driven decision-making allows manufacturers to identify areas for operational improvement, streamline processes, and enhance overall efficiency across the supply chain. 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.

5. Use Offline and Online Data

The convergence of offline and online data presents a wealth of opportunities for FMCG manufacturers seeking to gain a comprehensive understanding of consumer behavior and preferences. By integrating data from both offline sources, such as in-store transactions and point-of-sale systems, and online sources, such as e-commerce platforms and social media interactions, manufacturers can create a unified view of the customer journey. This holistic approach enables manufacturers to track consumer interactions across multiple touchpoints, identify cross-channel behaviors, and personalize marketing strategies to better engage with their target audience.

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. By optimizing your omnichannel data, brands reach their true omnichannel potential.

Enhancing Marketing Strategies with Retail Analytics

Enhancing marketing strategies with retail analytics is a game-changer for FMCG manufacturers looking to drive brand awareness, customer engagement, and ultimately, sales growth. Retail analytics empowers manufacturers to gain deep insights into consumer behavior, preferences, and purchasing patterns, enabling them to craft highly targeted and personalized marketing campaigns. By leveraging data-driven segmentation techniques, manufacturers can identify distinct consumer segments based on demographic, psychographic, and behavioral attributes, allowing for the creation of tailored messaging and offers that resonate with each audience segment.

Furthermore, retail analytics enables manufacturers to optimize their marketing spend by identifying the most effective channels and tactics for reaching their target audience. By analyzing the performance of various marketing channels, such as digital advertising, social media, email marketing, and traditional media, manufacturers can allocate resources strategically to maximize ROI. Additionally, advanced analytics tools allow manufacturers to track the effectiveness of marketing campaigns in real time, enabling quick adjustments and optimizations to ensure maximum impact and efficiency.

Moreover, retail analytics facilitates data-driven decision-making throughout the entire marketing process, from campaign planning and execution to performance measurement and optimization. By continuously monitoring key performance metrics such as customer engagement, conversion rates, and return on ad spend (ROAS), manufacturers can iteratively refine their marketing strategies to drive better results over time. Ultimately, by harnessing the power of retail analytics, FMCG manufacturers can unlock new opportunities for growth, strengthen brand loyalty, and stay ahead of the competition in today’s dynamic marketplace.

Build Better Plans with Accurate, Reliable Retail Analytics

To get the most out of your data, you need to define strategies based on predicted demand for categories, segments, or brands, along with the key business drivers responsible for that demand. But that’s only possible if you have access to reliable, up-to-date data.

If you aren’t currently using data, you can start your journey with a free Byzzer™ subscription, NIQ’s platform built for emerging brands and their budgets. Free access gets you 3 free reports and a weekly alert to get you started with data.

If you’re ready for the next step, you should look at NIQ’s Analytics tools that provide a full view to help you optimize your planning and grow. From sales forecast trends to key business drivers and even a simulation tool for custom “what if” scenarios, NIQ has the data you need.