How consumer packed goods (CPG) brands keep track of their products performance in retailer website & stay ahead of their digital commerce strategy ?

Introduction:

As the shopping experience has expanded across multiple channels, the challenge – or opportunity – for both CPG brands and retailers are to give consumers an experience they value, without the incremental cost of delivering that experience. Understanding their share of eCommerce sales by retailers are critical for CPG brands online channel performance and helps them to focus on platforms that matters to their digital commerce strategy.

20% Products Drives 80% Revenue:

In the era led by data driven decisions, CPG brands need to stay ahead in tracking the online performance using the KPI’s that in turn drives their marketing , supply chain and inventory strategy. The product performance evaluation is critical for CPG brands to focus on those products that impact their bottom line sales. The insights help CPG brands to :

1. Understand market trends, optimize product placement, and adjust marketing strategies with the retailers.
2. Drive product prioritization that maximize revenue. ?
3. Make better decisions for launching new product and branding campaigns that resonate with what the customer’s prefers.

The fundamental metrics to be tracked and analysed for digital commerce performance includes:

1. Online sales data and analytics
2. Digital shelf analytics - Share of search , Availability, Pricing & Promotion , Content Integrity
3. Customer and digital marketing analytics

In this article let us go through these top level metrics that are essential for CPG brands to come up with an optimised strategy with the retailers to increase sales and revenue.

1) Online Sales data and analytics: ?

Online sales and revenue metrics allows CPG brands to get insights into incremental sales performance, profitability, and market position. The key metrics to identify best and underperforming products are :

• Sales data of how much of each product/product categories are sold over a certain period within the retailer’s website,
• Average order value for each of the customer transaction.
• Market share data helps CPG brands track and analyse their market position versus their competitors.??

This helps CPG brands to prioritise and focus on high performing products.

2) Digital Shelf analytics :

a) Share of Search (SoS) ?is a comparative data, so it's not possible to say that a brand has a "50% Share of Search".?Instead, it can be used to evaluate a brand's overall prominence compared to its competitors.

• Product Share of Search : It helps brands to track important keywords for the product and its corresponding product placements in the search result pages of retailer’s website.?This includes both organic and paid search ranking of the products. It helps brands understand how their products/categories are positioned (or) ranked within retailer’s website.
• Brand Share of Search : It is the volume of search queries for a given brand in proportion to all the search queries for all the brands in a category. For example, Google or Amazon SoS gives an indication of approximate market share of the brand in Google search or Amazon marketplace.? ?

b) Product Availability data : ?By monitoring products daily availability (out of stock, void, limited availability, in-store only) in retailer’s website, CPG brands can optimize their range and assortment across online retailers. It helps them identify supply chain issues, address lost sales opportunities and basket abandonment for retailers. Product availability is crucial for ensuring a seamless and satisfactory experience for customers.?

c) Pricing & Promotions data : Understanding the retailers pricing strategy helps CPG brands to protect their profitability and define a differentiated pricing strategy across retailers. Through insights from retailer's digital channels, CPG brands can gain retailer buy-in on running effective digital marketing campaigns.

d) Content Integrity data :

CPG brands should be able to track the product descriptions, images, and specifications that are accurate and consistent across all retailer websites as it is crucial for maintaining brand integrity. When the gaps are identified, engage with retailers where brand is misrepresented and resolve the mistakes.

3) Customer and Digital Marketing Analytics

Customer acquisition cost , return on advertising spend, brand awareness, customer lifetime value are some of the customer metrics that helps understand the retailer’s performance and determine the success of a brand’s product in customer retention.

CTR, Conversion rate , impressions, clicks can give insights into effectiveness of marketing campaign. Customer retention results depend on CPG brand’s ability to analyse these data. Knowing when to make a small change or where to take a sharp turn can help brands capitalize on retention efforts and cut marketing costs.

There are various digital commerce tools available in the market to track and analyse these CPG brands KPI’s. CPG brands can gain a comprehensive understanding of their product's performance on retailer websites, identify areas for improvement, and make data-driven decisions to enhance their online presence and uplift online sales.

What are the challenges involved in getting these metrics ?

There are many challenges involved in tracking these data points as they come from a diverse data source. The volume and the variety of data across the value chain makes it difficult for CPG brands to get an aggregated view. Other challenges include :

1. Data Accuracy and availability at the right time : Sometime the data may end being inaccurate therefore CPG brands need to check the data from various sources for integrity and accuracy.
2. Complexity of the CPG Value Chain : CPG brands normally have a complex network of distributors, wholesalers and the retailers. Measuring CPG KPIs across this value chain can be a cumbersome task. Delays in communication, and data sharing between each stakeholder, siloed data residing across the value chain can cause disruptions and inaccuracies in datasets.
3. No single version of truth : Although, we can capture data points across retailers, CPG brands, and consumers it will be very challenging to interpret the data and get insights from multiple sources and get an aggregated view.

Conclusion:

Today, there are many challenges faced ?by CPG brands and retailers to drive online revenue and profitability.? They must foster an open, collaborative and agile ways of thinking and working – leveraging one another’s strengths and innovations to approach the future in a position of strength and deliver omnichannel experience. If we understand the consumer and do the right thing for them, the entire ecosystem wins.