THESE 8 DATA POINTS SHOULD BE IN EVERY SALES REPORT FOR CPG
BEDROCK KEY TAKEAWAYS
- Any sales report for CPG must be able to summarize how well a product is performing, and where it is performing well.
- Analysts should narrow their focus to essential key performance indicators.
- Don’t forget to account for incremental sales that highlight promotional performance.
What Data is Required When Creating a Sales Report for CPG Industries?
To succeed at any initiative, CPG brands must be able to regularly compile and understand comprehensive data sets — but that doesn’t mean your reports should cover every possible data point. To be more time-efficient, analysts must narrow their focus to the key performance indicators that will yield strategic insights. While these metrics will vary depending on your brand’s category, operational scope, and targeted channels, certain KPIs should be included in every sales report for CPG.
First Things First: Correctly Frame Your Data
It’s not enough for a CPG brand to know how much revenue they obtained in a given quarter. After all, the standards for a small, specialty cereal brand will be different than a mainstream brand on every retailer’s shelf. Instead, analysts should ensure they’re framing metrics within the context of how products are performing within relevant markets.
This allows sales teams to understand the quality of the brand’s performance and to pinpoint which markets are most receptive. For most brands, this means analysts will need to frame sales data in relation to the broader sales category, channel, and region.
Sales by Category
Although it may seem like an obvious consideration, measuring sales by category can reveal unique nuances. For example, some retailers might place your product in a category where it is less noticeable or effective — such as placing a cleaning product in natural product aisles or vice versa.
Sales data can help verify the most effective placement for a product or determine if it should be sold from multiple locations. Category sales also allow manufacturers to consider the competitive landscape. How do sales of your products compare to similar items from other brands?
Sales by Channel
You’ll also want to consider the specific sales channel that distributes your products. For example, are you selling your product exclusively through a single retail chain or multiple stores? What about direct-to-consumer e-commerce channels? Natural or conventional, or both? The customers of each channel have varying expectations for everything from customer service to pricing, and it’s important to measure performance in your core markets.
Sales by Region
Even brands that don’t dominate a specific category or channel may be a massive regional hit. For instance, niche or seasonal goods may sell better in specific regions, and this ought to be calculated into the broader sales, marketing, and distribution strategies. For these purposes, a region could be a state, a census region, or simply comparing the American coasts and heartland. Data that reflects strong regional sales can be leveraged when pitching to other retailers or help to determine similar demographic targets.
Focus on the Most Meaningful CPG KPIs
Once these frameworks are established, you can start measuring KPIs within a given timeframe. There are a variety of metrics a given report could focus on, but the following KPIs tend to be particularly important in retail settings:
- Units sold: A simple and direct count of the number of products sold within the report’s timeframe.
- Sales change over 52 weeks: Establishing the number of units sold is a great start, but analysts also need to consider ongoing trends. How does the number of products delivered to retailers compare to last year? Whether sales orders are growing, shrinking, or maintained says a great deal about your current strategies.
- Weeks of inventory on hand: While high sales velocity is an excellent trait for any brand, it can be dangerous if you don’t have enough inventory to meet strong demand. Tracking your available inventory is a good way to measure your value in the upcoming sales period.
- Weeks of inventory on hand with a retail account: The amount of product inventory warehoused at a given retailer, and how long it is projected to last for.
- Value of outstanding purchase orders: If you have outstanding purchase orders that need to be completed, these can have an impact on your reported profits for the reporting period.
- Retailer ROI: Manufacturers invest a great deal in retailers — slotting fees, promotions, and other costs will add up over time. By constructing these costs with revenue gained, you’ll better understand the return on investment of a particular account.
- Out of stock percentage: What is the percentage of retail locations that are out of stock of a given product? This can tell you where products are moving quickly, and where additional inventory may be needed.
Finally — And This is Really Important — Don’t Forget About Incremental Sales
Before submitting your report, it’s also worthwhile to distinguish any incremental sales within your data. This allows analysts to account for temporary discounts, displays, and promotions, and measure their impact on revenue and category growth. This helps brands temporarily increase sales velocity or A/B test price adjustments. Most importantly, it creates opportunities to attract new customers who may continue purchasing your product once it returns to regular price.
Developing a sales report for CPG industries can seem like a complex, time-consuming task, but some approaches can simplify the process. One option is zero-in on the specific KPIs, as we’ve outlined above. Another approach is to leverage visualization tools that automatically track essential data points, through a platform like Bedrock Analytics. Bedrock Analytics offers a robust CPG data platform that makes it easy for anyone in your organization to become a data expert. For more information, reach out to Bedrock Analytics and schedule a product demo today!