Ask any CPG Packaged Food Manufacturer, Distributor or Retail Manager what his or her top business goal is each year, and “growing revenue and volume” is on everyone’s short list. Though this answer is nearly universal across consumer goods demand chain trading partners, where to invest time, effort and budget to achieve this goal in short order is not. Looking for insights in syndicated consumption data is one avenue many take to get to their goal. But, there is another often-overlooked road that leads to quicker, more profitable results…Distributor Shipment Data.
By mining the voluminous shipment-to-retail data collected from distributors down to the SKU and promotional item-level – at an aggregated account and individual store-level – any business owner, account executive or data analyst can immediately contribute to the team’s goal of generating incremental unit sales. “How so?” you ask. By seeking out the two corrective actions that yield near-instant sales volume increases – filling product voids and replenishing out-of-stock SKUs.
A product is “void” when a SKU is authorized in the store but has not been placed (also known as ABNOS: Authorized But Not On Shelf). “Out-of-stock” is a term that describes a product temporarily oversold and unavailable in a retail store. Or, it can refer to product not in supply in the warehouse.
Sometimes, a retailer or individual store within a chain simply has not followed recent corporate instruction to order the void item. Other times, retailers inundated with activities simply do not get around to reordering certain items in a timely fashion — creating first an out-of-stock situation, and then a void — and in the daily hustle and bustle of attending to management tasks and customers, a competing item takes its place on the shelf. Without frequent store calls by a sales force, it may seem impractical to uncover these order pattern inconsistencies. Not true when distributor shipment data is in your toolset. By analyzing weekly distributor shipments to retail, you have visibility to the exact quantities and regular pattern of orders and deliveries that flow between distributors and retail accounts and can identify missing SKUs or those at risk for depletion before the next order cycle. A consultative phone call to your customer to remedy the situation can get them (and you) on the right path again — the one that leads to full planogram compliance and improved unit sales velocity.
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What do you think of this topic? Are you confident you are uncovering all item voids and potential out- of-stock SKUs by store outlet before they occur? Contact me at MGroff@MSA.com for a no obligation conversation to explore what areas of your Retail Sales Execution process can deliver a greater return on your investment.
by Matt Groff, Senior Client Relationship Director