It’s no secret that today’s business environment is as competitive as ever – with an unsteady economy, increasing globalization and the rise of mobile devices that puts your competitors just a click away. In this challenging landscape, CPG companies are turning to data to improve their performance. But simply having information is not enough; it’s only through having the RIGHT information and being able to pinpoint exactly what that data says about future performance that companies will find competitive advantages.
There are millions macro and micro economic factors that may affect your business. That’s why it’s important to understand the complete customer story and know exactly which factors are most relevant to your business performance. What do we mean by this? Most CPG companies base their plans on past performance and one or two external factors that are thought to factor into results – such as disposable income and consumer demand. In reality, though, there are several factors that influence demand that should be taken into consideration – and they vary by company, product and even SKU. For example, did you know that the health of the oil industry is an accurate predictor – or leading indicator – of wine sales in Texas? Knowing these leading economic drivers of demand can help CPG companies confidently plan for months down the road. That’s why we’ve partnered with Nielsen to give customers access to syndicated data that can help predict consumer behavior – and therefore make smarter decisions.
In our recent webinar, Nielsen’s Amanda Welsh identified the three key questions that companies should be asking to as they plan and grow:
- What’s happening in the market? What are people buying or not buying?
- Why is this happening? Is there a trend or change in the market that you want to take advantage of?
- What should you do next? Do you want to create a new product? Is there a new service you should offer? A new location to open? A different strategy to promote?
CPG companies are realizing that without expanding their analysis, they can’t answer these questions accurately. In fact, the Institute of Business Forecasting and Planning reports that SKU level sales forecasts are off by a staggering 37%, on average, resulting in excess safety stock, poorly timed promotions or market share loss. Companies that do incorporate external data effectively will have a significant advantage, discovering economic or consumer headwinds/tailwinds months before competitors.
Our new illustrated playbook describes the 5 critical steps to incorporate the latest in predictive analytics and syndicated data to predict consumer purchase behavior with remarkable accuracy – answering the questions above with confidence. Download it here.