Analyzing Against the Scanner Data Grain

Most new CPG founders with an omnichannel or brick retail focus have heard people talking about SPINS data, Nielsen data, etc. One reason is that this is the data that elite sales teams demand to manage their accounts and mess with buyers’ heads. 

But did you know that the two largest retail database providers (Nielsen and IRI) built their business servicing primarily the sales teams of BigCo legacy brands?

Does this sound academic? It might, but here’s why it matters.

When you interact with their sales and service people, you will not encounter a sensitivity to the analytical needs of a rapidly growing early-stage brand.

The primary bias of scanner data companies is in analyzing retail promotions and their effect on the business. This is where their analytics get really, really deep. 

The larger the brand and the higher the baseline store velocities, the more you must analyze promotional lift at the cash register, and NOT with heavily lagging distributor sell-in case volume data. It’s a statistical issue primarily. 

And since most BigCo holding companies actually have a sales bias to their financial management, it’s not surprising that scanner data companies have elaborated this aspect of their measurement capabilities. 

Scanner data companies try to extract as much store-level data from retailers to monetize it. And large BigCo manufacturers have the most profits to deploy to analyze that data in great detail. 

So, how do you get what you need as an early-stage growth company?

Early on, you need to focus on just the metrics you need to monitor the core health of a growing brand. These are metrics related to:1) baseline sales growth, 2) baseline velocity growth (factoring out any distribution or promotional activities), and 3) your distribution depth. Many of the advanced promotional analytics may not even work for small brands selling less than $50million nationally due to scanner data’s projected nature. 

If you are intrigued by what you’re missing, I have a 6-hour on-demand course that will train you in how to order scanner data to get what you need and not a bunch of silliness aimed at the Lay’s brand manager. 

Dr. James Richardson

[email protected]