Why Data Analytics in CPG Matters More in 2021
Opportunities and solutions that give CPG brands an edge at shelf over the competition.
As CPG companies enter the second decade of the 21st Century, it’s more important than ever that brands understand the impact of advanced analytics on day-to-day operations. Quite frankly, it’s a transition that is long overdue.
Even now, many CPGs continue to maintain traditional retail strategy practices, while technological progress makes it almost impossible to do so if they want to keep up with the competition. A new generation of rising businesses thrive by leveraging connectivity with always-online customers. All the while, the pressure to react quickly to the latest trends continues to build.
COVID-19 has forced brands to rethink their entire organizational structures. We cannot continue with business-as-usual in a world that has been flipped upside down by the new reality. Given the modern challenges posed to traditional CPG practices — the impact of COVID-19, rapid emergence of modern technology, fast-paced consumer trends — data analytics isn’t simply beneficial any longer. It is essential.
In 2021, CPG brands face immense pressure to operate quickly and with certainty. This trend is especially true for small to medium sized businesses, working limited budgets, that cannot afford to make mistakes in competitive retail environments. Access to data can help overcome these obstacles, yet the industry still faces many challenges when it comes to managing data, such as:
- Analyzing vast quantities of data: As every sale produces multiple data points, the CPG industry generates billions of data points every single day. Even in an aggregated format, the sheer volume of data can be overwhelming for even the best, most seasoned category manager.
- Extracting meaningful insights: Syndicated providers and retail portals offer sales data in massive spreadsheet downloads, which are practically incomprehensible at first glance. CPGs must continuously harmonize disparate data sets, and extract insights that highlight product, category, and retailer-level performance. Their web-based portals offer some visuals but not enough to get what you need.
- Leveraging insights in the most effective way: CPG insights are not inherently actionable. Analysts, salespeople and executives must interpret meaning that enables them to take advantage of this information in order to grow market share.
Unfortunately, surprisingly few CPGs are in a position to capitalize on insight-driven decision making. While large manufacturers mitigate these challenges by employing teams of analysts, many still struggle to adequately address the rapid rate of technological change and increasing marketplace volatility.
While the challenge of leveraging data insights is immense, the benefits are equally valuable to CPG brands.
- Productivity: Insight-driven decision making increases productivity and overall efficiency. In 2020 and beyond, this dynamic is increasingly within reach to CPGs of all sizes thanks to machine learning software that identifies and exploits emerging opportunities.
- Data literacy: Familiarity with data and advanced analytics makes it possible to survive and thrive in volatile CPG markets by ensuring that brands have the right insights at the right times.
- Growth: Once you understand the data and can better meet the needs of retailers and customers, your business will inevitably grow as a result.
CPG businesses are only just starting to make the transition from traditional retail sales practices to embrace insight-driven tools. The time to leverage them and gain their benefits is now.
Just about any data-driven sales opportunity a CPG brand pursues can be realized through the right machine-learning solutions. These platforms appeal to modern business organizations because they supplement existing human data analysis efforts with digital tools that crunch numbers, identify hidden outliers, and spot emerging trends faster and with more accuracy than human analysis alone.
In essence, the software does the heavy lifting, allowing the human operator to focus on providing the key context, and making the important decisions.
Businesses that hope to realize these opportunities in the coming decade are well-served by investing in:
- Adaptive data platforms: Data solutions must be flexible enough to meet the realities of a rapidly changing retail market. Expansion into new categories, adjustments in segmentation, and emergence of new trends should not leave CPGs waiting on software updates to keep up.
- Advanced analytical tools: Data solutions must have the analytical breadth and depth to gain the full benefit of CPG scan data. At the same time, it should be easy for non-analysts to understand and derive value from the software without sacrificing performance.
- Machine-learning capabilities: Data solutions must spot hidden trends, outliers and anomalies that are not necessarily obvious to human perceptions. Machine-learning capabilities can help CPG brands identify key insights as they emerge, and react to them accordingly.
Many machine learning tools exist today, but few can meet CPG industry needs effectively. An effective CPG platform must be able to:
- Systematically harvest data across multiple sources
- Apply algorithms that recommend actions based on insights
- Deliver visualizations and insights in easy-to-understand reports
- Make data accessible to everyone throughout an organization.
Once you’ve selected a machine learning solution, how can you tell it’s providing results? On the whole, CPGs should watch for three indicators:
- Increased productivity: With the right data insights, it’s far easier to make product decisions quickly, effectively, and efficiently. What’s more, your entire organization should have a far deeper understanding of your category’s inner workings.
- Accessible data for non-analysts: A truly revolutionary machine-learning solution helps non-analysts find meaning in complex data sets. Leveraging them effectively helps all team members make informed, proactive decisions about emerging opportunities and threats, instead of responding after the fact.
- Growth in volatile marketplaces: Gaining a foothold among retailers is no easy feat given the high competition between brands. With the right data insights, even small brands can find their niche, stay competitive, and grow.
The features we’ve discussed here are not abstract or impossible to achieve. At Bedrock Analytics, we provide the foundational data tools to help you gain leverage through data insights, and thrive on retail shelves. Our robust platform analyzes raw data and produces easy-to-understand visualizations for use in performance reports and sales presentations.
Most importantly, we understand the perspective of CPG professionals. Our team brings a wide range of experience from across CPG and retail businesses, and we use our expertise to develop a platform that meets the precise needs of the CPG industry.
If you’d like to see Bedrock in action, book a demo today to learn more about the unique benefits we offer.
Data insights are a necessity for every CPG in 2021 and beyond. With our help, you’ll be well equipped to find and leverage when crafting compelling sales presentations.