Four ways proper data analytics can boost business

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Four ways proper data analytics can boost business

12 Apr 2022

Joanie Spencer

Since 2008, Joanie Spencer has covered the retail and wholesale sides of the baking industry.
Serving associations such as the American Society of Baking (ASB) and BEMA, Joanie is also in demand as an industry presenter on bakery operations and trends. She holds a bachelor’s degree in communication from Rockhurst University and a master’s degree in journalism from the University of Missouri.

When she’s not running or playing soccer, Joanie spends her time with her husband and 11-year-old son.

ARLINGTON, VA — Most everyone knows that inefficiency causes waste. Then again, it’s not always easy to identify inefficiencies. Oftentimes, they’re hiding in plain sight, especially in a fluid area like sales strategy.

During a recent webinar hosted by the Emerge Network, a community that helps early-stage CPG founders with mentoring, learning, and access to data analytics, insights, and business solutions, attendees were able to unpack the ways data aggregation can streamline an effective sales strategy.

Presenting on the webinar were Samantha Schend, VP of sales, and Tony Miller, sales engineer, with Crisp, a data analytics consulting firm focused on real-time insights for CPG brands across supply chain.

“Data is the key to a successful retail and distribution strategy,” Schend said. “Whether you’re trying to get your foot in the door as an emerging brand or defend and expand existing distribution. In a hypergrowth situation, you need proof points for buyers to feel confident about you.”

The first area to address is distribution, especially for early-stage brands seeking to gain distribution. The biggest lesson to learn is that bigger is not always better. In fact, that can be a fast-track to creating waste.

“It’s about finding the areas where your brand has the greatest opportunities and highest chances for success,” Schend said. “And that’s where data comes into play. With a clear picture of your existing distribution and the ability to understand sales trends across locations, you can identify hot spots where you have clear momentum to build on.”

Identifying trends in regions where a product fits well can then be used to drill down into specific zip codes and even retail outlets where products will perform best. Armed with that data, brands can stand out in a crowded market.

“It’s unlikely that buyers will receive such tangible recommendations from an emerging-size brand,” Schend suggested.

In addition to distribution, data can be used to increase velocity, which is a combination of the number of stores a product is in and how fast it’s selling. Knowing how those numbers relate is a key to a razor-sharp sales strategy because it defines the quality of the distribution.

The trick is identifying those velocity hot spots — locations where the distribution is a match and the product flies off the shelf.

“One client discovered they were a slow seller nationwide, but they actually had strong velocity numbers in the Northeast, so they optimized the product assortment regionally,” Schend said. “As a result, they increased velocity across the board.”

Tracking velocity is also a useful tool for measuring success rates of promotions and limited-time offers to refine a brand’s overall promotional strategy.

Data-driven strategies also drive successful product launches because the information can identify the areas, outlets and specific locations where a new product will be best received. Oftentimes, a launch’s performance can be predicted by proper analysis of sales of similar products in the portfolio.

It’s also important to glean real-time information on which product is hitting store shelves and when. Sometimes that’s easier said than done.

“We hear from brands that this is often a key challenge,” Schend said. “They might launch in 100 stores, but they don’t actually know when the rollout is happening, which makes it nearly impossible to manage.”

“Transparency in your inventory and distribution will help you run a more cost-effective business,” Schend said. “And confidently knowing your inventory on-hand, you can proactively take steps to replenish products before you receive that frantic call from the retailer.” — Samantha Schend | VP of sales | Crisp

Targeted tracking not only helps gauge the success of a launch, but it can also help a company develop or refine its brand awareness based on that success. And that can ultimately help prepare for raising capital and seeking new investors.

“Not shockingly, investors are just as data-driven as retailers,” Schend said, noting that those metrics can demonstrate a brand’s success as well as future potential.

Once that brand awareness leads to potential investments, then it’s likely time to scale. And that’s the fourth advantage to a data-driven sales strategy. When scale happens, manual processes become obsolete when product is being distributed to thousands of stores nationwide. Having a good data partner can help a brand prioritize operational strategies to report back to investors.

After all, an efficient operation is the heartbeat of a successful sales strategy. That’s where data is the most valuable: when it provides a reliable picture of top-line sales and helps with demand planning and production.

“Transparency in your inventory and distribution will help you run a more cost-effective business,” Schend said. “And confidently knowing your inventory on-hand, you can proactively take steps to replenish products before you receive that frantic call from the retailer.”

This could not be more critical than in the age of supply chain disruption, when most days are met with frantic calls from retail customers.

When transportation is a huge factor in the crisis, brands are fighting for increased weeks of supply at distribution centers when stores aren’t getting product delivered as frequently as they might need.

“Whether it’s fighting for additional weeks of supply in the distribution centers or even going so far as saying, ‘Let’s increase our safety stock we have on hand at the stores,’ we are able to account for that,” Miller said. “We have ways to look at how retailers may have slowed down orders from the distributors, and when we’re connected to retail data, we have ways to track voids.”

Visibility is important to remain proactive, and proactivity is the key to keeping the operation and distribution running smoothly.

Over the past five to 10 years, mature commercial baking companies and other CPG manufacturers have significantly increased their data usage. But data without analysis is just a list of numbers on a screen. Emerging brands are fortunate to start the data journey with a clean slate and understand the importance of analytics to leverage it into an effective overall sales strategy.

For the past year, Crisp has been working with Emerge to form a partnership that will help early-stage brands learn these lessons to ensure success for the future.

As the Emerge CEO, Pryor is focused on bringing innovative CPG leaders together across the food and grocery retail and e-commerce space, which closely aligns with the Crisp culture.

“I am thrilled to be partnering with Crisp to aggregate and democratize data analysis for emerging brands,” Pryor said. “This helps them apply real-time insights to growing their business and reaching their goals.”

One Emerge member and Crisp client, Grandy Organics, a producer of granola and other snack mixes, shared with webinar participants the importance of tapping into these resources.

“For many years, we didn’t need data because we were just kind of hustling,” said Aaron Anker, Grandy CEO and chief granola officer. “But those days in our industry our gone. You have to be very pinpointed in the way you grow your business now.”

Anker referenced Whole Foods, where the brand started in one region. But then when the retail giant, now owned by Amazon, began triplicating, that’s when things began to change. A regional retailer that goes national that fast exponentially changes the game, especially when the cost of doing business is higher than ever, right down to warehouse space.

One trait that Anker said is vital for any entrepreneur, startup or early-stage brand is curiosity. And that is how the dig for data begins.

“We need to find out why something’s happening from several different facets,” Anker said. “And if you can give your team or yourself those tools to figure out what that problem is, you’re going to be that much better off.”

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