Point of sale data analysis can open troves of insights to improve and better manage trade promotion, pricing, customer behavior, and more. But, even in today’s big data world, inconsistent or poor quality data is the reality for most consumer products companies. This should not be a barrier to tackling analytical work; in fact, many of these data gaps or quality issues can be resolved through analytics. Creating a dynamic approach to replacing values known to be incorrect or filling in data that you’re missing allows you to move forward with analytics, and even set up alerting or update your data going forward for a sustainable solution.
Clarkston was engaged by one of the nation’s largest dairy brands, who saw inconsistencies in their price and volume data from their point of sale (POS) data provider. The client sought Clarkston’s help in reconciling discrepancies they found in their POS data in order to more accurately measure their promotional effectiveness. In a commoditized landscape like the dairy industry, effective promotional activity and evaluating how price reductions affect sales volume plays a large role in managing margins and is major competitive advantage for the client.
Clarkston built a dynamic process to evaluate the client’s price / sales volume relationship to predict new weekly sales volume quantities, while considering the effects of seasonality, product trend, price reduction, and competitor promotions for over 100 product and retailer combinations. This effort made way for the efficient evaluation of how the price reductions performed in store and how competitors’ price reductions affected the client’s weekly volume. The analysis also provided the client with a data-backed understanding of if retailers were running the client’s promotions in-store. These insights can pave way for having negotiating power with retailers, with an understanding of who they may have strong relationships with when it comes to promotional effectiveness. Overall, the dynamic analysis allowed the client to have a single evaluation tool for both their own and their competitors’ data, along with a template that can be easily uploaded to their existing TPM system.