Manufacturers often miss growth opportunities with their retailer through this one factor:
Their Brand’s Range. Shelf space has always been considered a key driver of sales and brand awareness – at least against competing brands.
However,…
With major Shopper behavior changes during the last 12 months, the importance of space productivity has been increasing drastically.
Retailers are reacting and adapting their own range quickly, based on shoppers’ spending changes.
So here is the dilemma:
Shall a Brand maintain a long assortment tail with high risk of decreasing my brand’s effectiveness and finally seeing my low selling SKUs – and space – cut by the retailer? or be proactive in cutting low selling SKUs to provide more space to my better selling SKUs? Consider the cost of maintaining low selling SKUs on a shelf: Delivery, Returns, Activation costs…
On the other hand, being proactive on my Brand’s Range delivers huge benefits: • Additional space justified by additional sales • Increased availability • More flexibility to launch and try new items
On Hypertrade Data Collaboration Platform, we use 2 simple metrics that must be checked monthly.
1. The average number of SKU sold by day by branch of the category [sub-category] of the retailer (A) and the same for the Brand (B).
2. A comparison between the Brand’s share of SKU (A) and its share of sales (B).
In both cases, when (A) > (B) it is usually a sign that range optimisation or activation is required. What decision will you take?
RETAIL SHORTS
Retail shorts is a series of practical practice sharing Hypertrades could learn, capture, implement and monitor across the diversity of our Clients. We hope it helps!
Hypertrade is a Retail Data Collaboration Platform that provides tech, data and continuous retail expert support to turn your teams into Champions.
Microservices Architecture and the Rise of B2B Software Marketplaces – How can it
make Retail Players life easier?
There is no perfect software solution. There will always be one or several missing functionalities or features. Because of costs, data governance, internal tech strategies or required training, changing a tech solution is always
a pain in the neck. This challenge often results in frustrations: an incomplete tech solution with part of the job being done manually – or not done at all.
In the ever-evolving landscape of technology, paradigms often shift to accommodate new and innovative solutions. One such paradigm shift is being catalyzed by the development of microservices architecture and its influence on the way companies utilize professional software. Companies are now able to keep their existing solutions and use, when required, on-demand functionalities: micro services. These micro services are increasingly present and marketed through B2B software market places, a more flexible and dynamic. This article explores how the emergence of microservices architecture is reshaping the software industry, leading companies to increasingly adopt software-as-a-service (SaaS) solutions from B2B marketplaces, and the implications of this shift.
Microservices Architecture: Breaking Down the Monolith
Historically, software development followed a monolithic architecture, where applications were built as large, tightly integrated systems. This approach had its merits but also came with challenges like rigid scaling, difficulty in updates, and limited flexibility. The introduction of microservices architecture marked a transformative departure from this tradition. Microservices involve decomposing applications into smaller, loosely coupled components, each responsible for specific tasks or services. These microservices can be developed, deployed, and scaled independently, allowing for greater agility, faster updates, and enhanced fault tolerance.
The Shift Towards B2B Software Marketplaces
As microservices architecture gained prominence, a natural synergy emerged with the concept of B2B software marketplaces. These marketplaces act as intermediaries, connecting businesses seeking specific functionalities with providers who offer microservices catering to those needs. Instead of investing in developing or procuring comprehensive software suites, companies can now access individual microservices that align with their precise requirements. This trend is akin to renting software capabilities, enabling businesses to focus resources on core competencies while utilizing specialized services from the marketplace.
Benefits of B2B Software Marketplaces
1. Flexibility and Customization
B2B software marketplaces empower companies to craft tailored software ecosystems by selecting and integrating microservices that precisely match their needs. This flexibility enhances operational
efficiency and prevents the bloat often associated with monolithic software packages.
2. Time and Cost Efficiency
Traditional software development or procurement processes are time-consuming and resource intensive. B2B marketplaces expedite this process by offering pre-built microservices, significantly reducing development and deployment timelines and associated costs.
3. Scalability
Microservices architecture inherently supports scalability. When companies harness microservices from a marketplace, they can scale specific components of their applications based on demand, optimizing resource utilization.
4. Innovation Acceleration
B2B software marketplaces house a wide array of specialized microservices, encouraging businesses to experiment with cutting-edge technologies without committing to a full-scale software overhaul.
5. Maintenance and Update
Microservices can be updated individually, ensuring that the entire system doesn’t need to be taken offline for maintenance. This allows businesses to benefit from the latest features and security patches seamlessly.
6. Reduced Vendor Lock-In
The modular nature of microservices reduces dependency on single vendors. Businesses can switch between providers for different microservices without overhauling their entire software infrastructure.
Challenges and Considerations
While the marriage of microservices and B2B software marketplaces offers a promising alternative to traditional software acquisition, certain challenges must be addressed:
1. Integration Complexity
Integrating disparate microservices from various providers can be complex, requiring robust API management and middleware solutions.
2. Data Security and Privacy
The distributed nature of microservices demands meticulous attention to data security and privacy, with potential vulnerabilities at inter-service communication points.
3. Quality Assurance
The reliability and compatibility of microservices from different vendors must be thoroughly vetted to prevent potential operational disruptions.
4.Vendor Selection
Choosing reputable and reliable providers from the marketplace is crucial. An unreliable microservice could have cascading effects on the entire application.
5. Regulatory Compliance
Different microservices might have varying levels of compliance with industry regulations, necessitating careful evaluation and mitigation strategies.
Future Implications
The convergence of microservices architecture and B2B software marketplaces is poised to reshape the software industry in several ways:
1. Democratizing Technology
Small and medium-sized enterprises can access sophisticated software functionalities without the prohibitive costs of traditional development or procurement.
2. Evolving Developer Roles
Developers will increasingly become orchestrators, selecting, integrating, and managing microservices to create cohesive applications rather than building everything from scratch.
3. Shift in Business Models
Software providers are likely to pivot towards offering specialized microservices to cater to the demand from B2B marketplaces, fostering innovation and competition.
4. Redefining Vendor-Customer Relationships
The customer-vendor dynamic will evolve into more of a partnership, as businesses collaborate with microservice providers to address unique challenges.
5. Hybrid Approaches
As companies transition to microservices, hybrid models combining legacy systems and microservices will emerge, allowing gradual migration and risk mitigation.
The dawn of microservices architecture and the subsequent rise of B2B software marketplaces mark a profound transformation in how businesses access and utilize professional software. This shift empowers companies with flexibility, cost-effectiveness, and innovation while redefining their relationship with software providers. While challenges persist, the potential benefits of this paradigm shift are undeniable. As companies embrace the modularity of microservices and the convenience of B2B marketplaces, the software landscape is set to evolve into a more agile, customizable, and collaborative domain.
Hypertrade Micro-Services for Retail Player
Hypertrade offers a continuously growing choice of micro-services, enabling retail players to use only the functionality they need without having to change their complete system. Each of these micro-services are powered by automated data ingestion and machine learning engines:
Data Collaboration is a term used when a retailer exchanges its data (most often POS, sometimes Loyalty and Web) with a vendor against financial retribution. It is now an established practice. Beyond additional income, are you maximizing its ROI through noticeable increased sales growth? If not, the good news is you are on an untapped resource! In this article, we explain the essential steps a retailer can take to ensure Data Collaboration’s main benefit is Sales Growth, far ahead of additional income.
Data Collaboration Pitfalls
The lack of alignment on data-driven decisions between retailers and manufacturers remains data collaboration’s main challenge today.
It is unfortunately the most common pitfall. Despite both parties having access to a single source of truth –retailer’s POS and CRM data – one party, or the other, does not use them to collaboratively decide what is best for the Category and the Brands.
Business continues as usual, failing to capture the amazing growth and profitability opportunities data collaboration has to offer on each sales driver:
Range & Assortment optimization
Distribution improvement
Promotion effectiveness
Space optimization
It’s important to look at the current challenges that create that pitfall and limit data collaboration projects to a “Data vs. Cash” transaction.
Current Challenges
2 main challenges are at the origin of the Data Collaboration pitfalls:
• Organization (Data Empowerment)
• Capabilities (People Empowerment)
It is worth having a look at each of them.
Data Empowerment: Unleash the Courage to Supercharge Your Organization
Control Driven organizations will always find it difficult to trust data as they imply an important mindset shift and decision-making processes. Retailers face an ongoing challenge in optimizing their data management processes. Ideally, data should be used to measure each step of the Customer Journey, providing specific analyses, alerts, and recommendations to inform managers and guide their actions. These data-driven decisions typically revolve around four key pillars of retail operations: assortment, price, promotion, and distribution. To ensure effective collaboration, retailers need to clearly communicate these decisions and the criteria to their vendors. However, in reality, many decisions get diluted in control-driven processes, hindering the organization’s ability to make increasingly data-driven choices.
People Empowerment: They Can Do Better Than What You Think
Lack of capabilities is often the scapegoat of many digitalization projects’ failures. However, necessity is the mother of all progress and innovation. People’s ability to adapt and learn when they have clarity in the objectives and what is in for them is often under estimated. In emerging countries where we operate, we’ve observed a strong desire for learning among the teams we work with, spanning from Africa to South-East Asia. However, the existing state of status quo within organizations often hinders their progress. To address this, it’s crucial for organizations to institutionalize the practice of making key decisions exclusively based on data. By embracing data empowerment, teams can unlock opportunities to enhance their capabilities in these areas.
Getting Data Collaboration Right in 5 Steps
For any retailer that wants to generate sales growth in addition to additional income through Data Collaboration, 5 key simple steps are required.
Establish an Internal Data & KPI Taxonomy
What do we want to count?
Why do we want to count it?
What decisions can we take with them?
The online free Retail Knowledge base HPT Pedia can be a good starting point.
Define clear objectives of your Data Collaboration with vendors
In practice, the objectives you want to establish with vendors that will join your data collaboration program should be aligned with these established in the yearly Trade terms agreements. In case these yearly Trade Term Agreements do not exist yet, it is a good opportunity to set them up.
Define & Plan the Key Processes you want the Teams to use internally to make their decisions
From our experience, it is essential to go progressively. We recommend the following steps.
For each process, define the KPI for your decisions
Internally as well as with vendors, transparency on the criteria of decisions will guarantee trust,quality of the decisions taken and speed in their execution. These criteria belong to the taxonomy initially defined. Below are some practical examples:
Data-Driven Decisions must become Part of Vendors Meeting’s Agenda
For Data Collaboration to become the common language between retailers and vendors, the processes you selected must become an essential and recurring part of every vendor meeting. Vendors must have access to the same data as the retailer, the same KPI and the same analyses so they have all the insights on hand to prepare an effective meeting and come up with informed proposals. To ensure both Teams do not spend time creating these reports and analyses, it is best to select a Retail Data Collaboration Platform that:
can automate these analyses.
is updated regularly and automatically.
can offer your vendors to see their performances in both your merchandise hierarchy and their own segmentation.
Data is becoming an unavoidable tool in all businesses, a combustible that fuels more and more business decisions. At the same time, because of rising complexities in most industries, collaboration is also becoming a necessity. Data collaboration is a priority as it enables organizations to gain comprehensive insights, uncover hidden patterns, and make informed decisions. By combining and sharing data resources, collaboration fosters innovation, accelerates problem-solving, and drives collective growth.
About Ariane
Ariane is a Category Management solution, published by Hypertrade, available as a Platform or as a Plug-in in existing solutions such as Power BI. Developed by retailers for retail players, it integrates hundreds of retail-expert algorithms. Ariane is currently used by tens of companies in Southeast Asia, Middle East, and Africa.
Unlocking Retail Supplier Potential and Retailer Success through Data Freedom
In today’s data-driven world, information has become a valuable asset for businesses across various industries. In the retail sector, retailers amass vast amounts of data, including sales figures, customer behavior, and market trends, to optimize operations and drive growth. However, a common practice among retailers is to restrict suppliers from utilizing this shared data on platforms other than their own. This practice of data captivity hampers suppliers’ ability to aggregate data and gain a global vision of the market. In this article, we will delve into the issue of data captivity, explore its detrimental effects on suppliers, and emphasize the need for data freedom to empower both suppliers and retailers for collective success.
Data Captivity: The Retail Supplier’s Challenge
Within the retail ecosystem, many retailers collect substantial volumes of data that encompass sales figures, customer preferences, and market trends. While some retailers are willing to share this data with suppliers, they often impose restrictions that prevent suppliers from utilizing the data beyond the boundaries of their platform. While large international suppliers can develop internal tool to migrate all their retailers ‘data in their own architecture – when data can be accessed as files – this data captivity confines smaller suppliers to a limited perspective, preventing them from aggregating data from multiple sources and gaining a comprehensive understanding of the market.
The Impact of Data Captivity on Suppliers:
Restricted Market Insights: Data captivity restricts suppliers’ access to comprehensive market insights. When confined to using data solely from one retailer’s platform, suppliers miss out on broader market trends, customer preferences across different retail outlets, and regional variations that could inform their decision-making process. Consequently, suppliers struggle to identify growth opportunities, adapt their product offerings, and optimize their market strategies.
Hindered Innovation Potential: Data captivity inhibits innovation by limiting suppliers’ ability to leverage aggregated data. When suppliers are unable to analyze data from multiple retailers, they face challenges in identifying emerging trends, customer demands, and gaps in the market. As a result, their innovation potential remains restricted, stifling creativity and inhibiting the development of new and improved products and services.
Impeded Collaboration: Data captivity hampers collaboration between suppliers and retailers. When suppliers are unable to aggregate data and gain a comprehensive market perspective, their ability to engage in meaningful discussions and collaborate on product development, pricing, and marketing strategies is compromised. Such limitations impede the potential for mutually beneficial partnerships and hinder collective growth.
Data Freedom: Unlocking Potential for Suppliers and Retailers
Comprehensive Market Insights: Data freedom allows suppliers to aggregate data from multiple retailers, facilitating a comprehensive understanding of the market. Armed with a global vision, suppliers can identify emerging trends, consumer preferences, and regional variations, enabling them to make informed decisions and tailor their offerings to meet diverse customer needs.
Accelerated Innovation: The freedom to aggregate and analyze data empowers suppliers to drive innovation. By gaining access to a broader range of data, suppliers can uncover valuable insights, patterns, and correlations that were previously inaccessible. This expanded knowledge fuels innovation, enabling suppliers to develop new products, improve existing ones, and respond swiftly to changing market dynamics.
Strengthened Collaboration: Data freedom cultivates a collaborative ecosystem where suppliers and retailers can engage in meaningful partnerships. By sharing data, retailers foster transparency and trust, enabling suppliers to contribute their insights and expertise. This collaboration leads to joint problem-solving, improved decision-making, and mutually beneficial outcomes for both parties.
Enhanced Customer Experience: Data freedom benefits retailers by enabling suppliers to tailor their offerings based on a comprehensive understanding of customer preferences. By leveraging aggregated data, suppliers can develop personalized and targeted strategies, resulting in a superior customer experience. Retailers, in turn, can benefit from increased customer loyalty, higher sales, and improved brand reputation.
Promoting Data Freedom: 3 Strategies for Change
Establish Clear Data Sharing Policies: Retailers and suppliers should agree from the start that suppliers have the ability to access data in any form, granted that this access, by the supplier itself of the 3rd party assigned to this task, match strict data privacy and security rules.
Homologation of Neutral Data Aggregation Platforms: To facilitate data freedom, retailers and suppliers should explore the homologation of neutral data aggregation platforms. These platforms would allow suppliers to aggregate data from multiple retailers in a secure and anonymized manner. By creating a centralized hub where data from various sources can be combined, suppliers can gain a comprehensive view of the market without compromising customer privacy. Retailers can support this initiative by actively participating and contributing to these platforms, recognizing the benefits of data freedom for themselves and their suppliers.
Adoption of Open APIs: Retailers can promote data freedom by adopting open Application Programming Interfaces (APIs) that enable seamless integration and data exchange between their systems and homologated Neutral Platforms. Open APIs facilitate the sharing of data in a standardized format, making it easier for suppliers to access relevant information and aggregate data across multiple platforms. By embracing open APIs, retailers empower suppliers to leverage data from various sources, fostering innovation, and enabling suppliers to deliver tailored solutions that meet customer demands effectively.
Emphasis on Data Privacy and Security: While promoting data freedom, it is crucial to maintain a strong focus on data privacy and security. Retailers and suppliers must establish robust data governance frameworks that protect both customer information and their own sales data and comply with relevant data protection regulations. This involves implementing appropriate security measures. By prioritizing data privacy and security, retailers build trust with suppliers and customers, fostering a supportive environment for data freedom initiatives.
Hypertrade is a Neutral Data Platform that enables.
retailers to share their share their sales and shoppers’ data seamlessly with suppliers.
retail suppliers to aggregate multi-retailers data set to achieve 360 market and shopper insights
Promotion plays a vital role in the Retail business due to the high competition among the brands and Retail Stores. While the dramatic cost increases influence the business to spend more time on the promotion evaluation.
In this article, we would like to introduce the method of promotion evaluation to be your choice.
In the Retail Process, the step is started from
Retail store drives the commercial offers, and promotion is one of them
Shoppers’ response to the commercial offers with the traffic and spending
Then sales are generated
If supplier A drives sales higher than the category, then Supplier A gains the market share.
The promotion evaluation will be articulated around this Retail Process.
1. Financial Results
This is the main KPI for every business. The measurement could be made for both Promo SKU only and at Brands or Category Level to see the impact of the promotion SKU on the total of my business.
When we run an analysis, it should be done at the item and brand levels.
Below is the item “Great Value Biscuit Chocolate 90g” promotion result. This item could generate extra sales $5,000 per week with the investment at $1,500 per week. Therefore the ROI in sales is at 2.33 time.
The main objective of evaluating this promo SKU is to determine its profitability. We need to check further if this promo item could help generate more traffic and spending for other items.
Below is the result at the brand level for the “Great Value” brand. It shows that the promotion of the item Great Value Biscuit Chocolate 90g helps to increase Great Value sales and bring great results of ROI.
In some cases, we found out that Brands get cannibalism effect, so finally, total brand sales might not increase.
2. Competition Result
This measurement is to ensure our performances win over the competition. The evaluation will be at the SKU and Brand level, the same as the financial evaluation.
Why do we need to measure it?
In the Retail Business, it is a ton of seasonality and events. It means you can grow sales significantly without doing any promotions. So we want to ensure the promotion makes us grow higher than the competitors.
Below performance at the brand level of “Great Value“ can be interpreted as follows.
Promotion helps brands increase by 1% of market share.
Great Value shows the effectiveness of the marketing effort compared to the Market Share they get.
3. Shopper Result
Three levels depend on the data you have and how deeply you want to explore.
At the Basic Level.,
What can we read?
Understanding the cause of sales increased either from Traffic (Number of Baskets) or Spending (Value per Basket).
It is to measure if the result is achieved as per the target and the mechanic we design.
At the Advance Level.,
What can we read?
Penetration increases means this promotion could help us to be more attractive among the shoppers who walk around in the stores. While the Wallet share dropped means this promotion helps us penetrate in the big spending basket.
At the Professional level,
What can we read?
Penetration increases means this promotion could help us to be more attractive among the shoppers who walkaround in the stores. While the Wallet share dropped means this promotion helps us penetrate in the big
This promotion helps my brands to be in the Brand list of my Shoppers, which means Shoppers buy my brands and still purchase other brands. In terms of brand switching, we lose Shopper to competitors rather than gain from them.
That help save 100’s of working hours and win Shoppers’ hearts
Time and automation…the 2 resources that are often lacking in many retail organizations and that prevent teams to do as much as they wished to delight their shoppers. In this paper, we look at 2components of marketers’ jobs: Category Planning and Promotion Planning.IN these components, we are looking at 3 areas where automation helps save literally hundreds of hours: Diagnostics, Score Cards, and History; and what decisions these automated methods help take
Category Planning
# 1. Automated Category Diagnostics
Take the best decisions to activate your Category on Assortment, Price, Promotion and Distribution in minutes!
A complete category diagnostic usually delivers the causes of the sales variations and what should be done to improve the performance. It should at least cover the performances of assortment, distribution, prices, and promotion impact. Delivering such a diagnostic, from data collection to crunching and analyzing, can take tens of hours per category. At worst, the diagnostics is not done due to the lack of time and wrong decisions can be taken. The pain Hypertrade addresses here again is time and data accessibility. With Hypertrade, you can automatically create a diagnostic in less than 2 minutes.
4 deliverables to make the best decisions
Measured impact of each sales driver
In the example above, it is clearly visible that despite strong promotion sales and improvement in distribution, assortment and price changes had a negative impact on the sales performances.
❔What decision can be taken from there:
• Identify which of these 4 sales drivers need to be improved.
• Define which sales driver needs to be prioritized.
Dive down to the SKU by Store
A simple click on any of these drivers gives access to the products and store details
At a glance, category managers and merchandisers can identify:
Which promo products drove sales down?
Which new promo products impacted sales and how much?
Which promo products stopped being promoted and how did it impact sales?
❔What decisions can be taken from there: my promotion strategies
Increase or decrease the number of promotions?
Increase or decrease promotion items distribution?
Select the promotion items we want to re-use in the future?
Select the promotions items we don’t want to re-use in the future.
Measured impact on Retail Indicators
Category Indicators vary each time the sales change. They deliver critical insights on the category’s assortment efficiency and its structure. They can be accessed, with their evolution vs. the last period, immediately.
❔What decision can be taken from there: range and assortment strategies
Reduce or increase the number of skus.
Reduce or increase the number of Brands.
Reduce or increase the number of price-points.
Reduce or increase the distribution of items across channels and stores.
Measured Shoppers Behaviors that generated the sales
Traffic, basket penetration, average purchased price and number of items by basket define sales performances, and their variation explains sales results. These insights are almost instantly available, onthe same page:
❔What decision can be taken from there: the shopper strategies I need to grow sales.
Does my Activity plan need to focus on penetration?
Does my Activity plan need to focus on a number of items?
Does my Activity plan need to focus on value per item?
⏱️Estimated time saved by Diagnostics: 14 hours
# 2. Score Cards
Score Cards are an efficient, fast, and extremely powerful way to
Measure key performances.
Benchmark the competition.
Identify what are the next priorities to improve performance.
Score cards measurements are usually established in a set of different perspectives:
Performances vs. last period
Performances vs. the category
Performances vs. the competition / other brands in the category
With Hypertrade, you can automatically access your score cards in less than 2 minutes, including the priority actions. Here is your global Score Card Menu
Then you Growth Origins and the Range Status
A simple visual display show when there is an improvement (green) or a challenge to address (red)A quick glance at the ongoing promotions’ performances and their evolution
Simply focus on the Brands and sub-categories that require attention.
Benchmark sales, promo and range performances in a blink and focus only on the areas that need your attention.
Estimated time saved by score card: 6 hours
Promotion Planning
#Promo Calendar
We have seen with the Category Diagnostics and Score Cards how simple it is to measure:
Our Promotion Performance
Our promotion over or under exposure
Our Competitors Promotion Activities
The decision we now face is to decide, whether we want to invest or disinvest:
When this should be done?
Where this should be done?
This is when the Promotion Calendar becomes very handy. In a single view, marketers can visualize each promo (their own and the competition), their dates, and performances.
Clicking on any of these values, it becomes easier to look at performances items by items, sales by stores or even effectiveness.
❔What decision can be taken from there: how do I want to plan my next promo moves
Confirm my decision to invest or reduce my investment in promo.
Select the channels where I want to invest.
Select the period during which I want to invest.
⏱️Estimated time saved by promo calendar: 8 hours
#Promo History
Talking about Calendar inevitably drives us to mention history. It’s typically quite difficult to keep the history of all promos that have been run, the scope under which they have been launched and their corresponding performances.
Here again, technology and Ariane come to the rescue by enabling users to access all promo products history in just a click.
The first step is to just select the Brand and see all the items that have been promoted during the selected time period.
The second step is, for any selected item, look at when it has been promoted, how many times, in whichchannel, and what was the selling price at which the best performances have been achieved.
❔What decision can be taken from there: Which Item to select for my next promo
⏱️Estimated time saved by item: 4 hours
About Ariane
Ariane is a Category Management solution, published b y Hypertrade, available as a Platform or as a Plug-in in existing solutions such as Power BI. Developed by retailers for retail players, it integrates hundreds of retail-expert algorithms. Ariane is currently used by tens of companies in South East Asia, Middle East and Africa. Contact us to book a demo
Technology progresses and the necessity of keeping the business and Teams up to date require more and more decisions linked to Technology and tools. Decision maker shave to face the tough challenges of selecting whether it’s better to invest internally and have the company develop its own tools, or to use a 3rdParty. The final choice depends on each company’s specific needs, resources, and strategic goals. It’s essential to weigh the advantages and disadvantages of both options to make an informed decision.
This simple tool has been designed to help you make that choice.
You might also be interested in the following articles:
Managing Cultural Change & Business Impact in a Digital Transformation Journey
How to Implement Category Management
How to Select your Category Management Analytics Platform
Category performance analysis is the process of reviewing and analyzing a specific product category to understand its performance and identify opportunities for improvement.
Here are a few reasons why category reviews are important:
To understand the category’s market position: By reviewing the category’s market share, customer base, and competitors, businesses can get a better understanding of their position in the market.
To identify opportunities for growth: Category review can help businesses identify areas for growth and development within a specific product category.
To inform strategic decision-making: By understanding the category’s strengths and weaknesses, businesses can make more informed decisions about their marketing, sales, and product development strategies.
To measure category performance: Category reviews can help businesses track the performance of a specific product category over time and identify areas of improvement.
To improve customer satisfaction: By reviewing customer feedback and data on customer behaviour, businesses can identify opportunities to improve the customer experience and increase satisfaction.
Overall, category review is an important tool for businesses to use to optimize their performance in a specific product category and achieve their business objectives.
1. Define the Scope of the Analysis
This is a critical step that needs to be specified and agreed upon with the stakeholders before running the analysis, as it can bring different insights and action plans. Here are a few steps for defining the scope of a category performance analysis:
Determine the specific product category that will be analyzed, such as consumer electronics, sporting goods, or home appliances. The definition of the category will be different in each company and of course, in each Retailer account. Therefore, make it clear which definition you are using for the whole analysis.
Determine the time frame: Decide on the time frame for the analysis, such as the past year or the past five years.
Define the geographic Scope: Consider whether the analysis will focus on a specific Retailer Account or will be conducted globally.
Identify the target audience: Determine the specific audience for the analysis, such as consumers, retailers, or distributors.
Define the business objectives: Consider the business objectives that the analysis will help to achieve, such as increasing market share or improving profitability.
Overall, defining the scope of the category performance analysis involves determining the specific product category, time frame, geographic scope, target audience, and business objectives that the analysis will focus on. This helps to ensure that the analysis is relevant and useful for achieving the business’s objectives.
2. Gather Data
At the end of the analysis, we would like to develop an action plan to grow sales, gain market share and satisfy our Shoppers. Here is the data set that you might need to gather for your analysis
Performance: Sales and Market Share
There are 2 types of sales
Sell Out is the number of products sold from the retailer to the end customers
Sell In is the number of products the manufacturer sells to the retailer,
As the category performance analysis reflects the Shopper behaviour and trend, so Sell Out will be more appropriate to use in the analysis.
The company’s goal is to grow higher than the others.
Market Share Loss or Gain could also reflect that result.
😊 My brand grows higher than others > I gain market share
☹ My brand grows lower than others > l lost market share
Range and Distribution:
Number of SKUs: Your SKUs and your competitor’s SKUs.
Count every item in the Shopper View. For example,
Orange Flavor 8 g in Single pack
Orange Flavor 8 g pack 6
Orange Flavor 8 g pack 24
All these 3 SKUs might be only one SKU for you, but it is 3 SKUs for Shoppers. And each pack type serves a different shopping mission. So you should count it as 3 SKUs.
New Item List
List of the New Items available in the market
It is to measure the performance to identify our potential new items
Distribution of each SKU
Numeric distribution is the number of stores that carry a particular product. This type of distribution focuses on the number of stores that carry a product, regardless of each store’s size or sales potential.
Weighted distribution takes into account not only the number of stores that carry a particular product but also the importance of each store. It measures how many of the high-performing stores carry the product or service. For example, if a company distributes its product to 100 stores, and 20 of them generating sales 80% of total business, the store-weighted distribution would be 80% instead of 20%
In summary, numeric store distribution is the number of stores carrying a product or service. In contrast, store-weighted distribution is the proportion of high-performing stores that carry a product or service.
Shelf Space Allocation of each SKU: Your brands and Competitors
Count the number of display facing by SKUs
Count all brand’s shelf space
Availability
Stock Days
Service Level
Promotion
Financial data: This includes information on the financial performance of the category, such as revenue, profits, and expenses. It also includes information on the financial performance of specific competitors within the category.
Customer data: This includes information on the demographics, psychographics, and behaviour of customers within the category. This could include data on age, gender, income, education, location and so on.
Industry data: This includes information on the overall size and growth of the market, as well as information on trends, drivers, and challenges within the industry.
Social Media data: If the category is a consumer good and has a presence online it’s important to gather data from social media analytics and feedbacks on the product or service.
Other External data: it could be economic, political, legal and other external factors which could affect the category.
It’s important to gather data from a variety of sources in order to ensure that the analysis is comprehensive and accurate. Additionally, data should be as recent as possible, to ensure that the findings are relevant and up-to-date.
The most popular measurement is the growth-share matrix, also known as the Boston Consulting Group (BCG) matrix, which assesses a company’s product portfolio and determines which product or segment should receive the most investment.
The grid is based on the Brand Market Growth Rate and Brand Market Share and is divided into four quadrants. Brand strategy in each quadrant should be different.
Star: Expand
Question Mark: Invest or Divest
Cash Cow: Harvest
Dog: Divest
The growth-share matrix can help a company prioritize its investment decisions and allocate resources effectively. However, it has some limitations, such as its reliance on market share as a sole measure of a product’s success and its failure to consider other factors that may affect its performanceใ
Customer Analysis: Study the brand’s customer base to understand their demographics, preferences, and behaviors.
3. Opportunity Lost Analysis
Quantifying the number of expected sales would help us know how much we should invest.
There are 2 possible ways.
3.1 Growth opportunity loss
It refers to potential business growth that was not realized due to missed opportunities or poor decision-making. It can be caused by various factors, such as a lack of resources, inadequate planning, or a failure to seize opportunities as they arise.
The calculation is
My Brands Sales Growth = A
My Brand Sales Last Year = B
My Benchmarked Sales Growth = C
Formula = (A-C) x B
3.2 Fair Share Gap
The fair share gap is the difference between a company’s actual market share and its potential market share, also known as its “fair share.” It is typically used to measure a company’s performance in a specific market.
To calculate the fair share gap, you can use the following formula :Fair share gap = Actual market share – Potential market share Potential Market Share can be, for example
Your company’s market share combining all brands
Your brand market share on average in many markets
Your targeted competitor’s market share
4. Competitors Analysis
Competitor analysis studies your brand’s competitors to understand their strengths, weaknesses, and strategies. It is an essential tool for businesses to stay competitive in their market and make informed strategic decisions.
To conduct a competitor analysis, you can follow these steps:
1. Identify your competitors: Who are the main competitors in your market? Next, make a list of all the companies that offer similar products or services.
2. Benchmark your brands vs them in terms of
Number of SKUs,
Assortment Variety for different shopper group
Pricing
Promotion: Above the line and below the line
Display at the stores
3. Evaluate their strengths and weaknesses: Identify your competitors’ key strengths and weaknesses,
By conducting a competitor analysis, you can better understand your competitors and their strategies, which can help inform your own business decisions.
5. Brand Perception Analysis
The process of studying how consumers perceive a brand and its products or services. It is to understand their brand’s strengths and weaknesses and identify improvement opportunities.
There are several ways to conduct a brand perception analysis, including:
5.1 Surveys are a common method for collecting data on brand perception. You can use online tools or hire a research firm to conduct a survey and gather data on consumer attitudes and perceptions of the brand.
5.2 Focus Groups involve gathering a small, diverse group of consumers and facilitating a discussion about the brand. This can provide valuable insights into how consumers perceive the brand and its products or services.
5.3 Social Media Analysis: Social media platforms can be a rich source of data on brand perception. By analyzing social media conversations and sentiments, you can understand how consumers feel about the brand.
5.4 Customer Feedback: Customer feedback, such as online reviews or comments on social media, can provide valuable insights into how consumers perceive the brand.
5.5 Brand Tracking Studies: These are long-term studies that track changes in brand perception over time. They can be useful for identifying trends and patterns in consumer attitudes towards the brand.
Last but not least….
If you want to focus only on the action, the category diagnostic could tell you the cause of sales change in a click. The detail SKUs by SKUS will let you fix the problem at the right SKUs for each challenge.
Common Traps to Avoid
Below are the most common traps we have seen happening during a Category Management approach implementation.
Relying too heavily on subjective opinions
Failing to consider the competitive landscape
Ignoring the customer perspective:
Failing to update the analysis regularly
Success Factors
What a company could help brand manager to successfully implement brand review process.
Solidify RACI (response, account, consult and inform) of each brand review step
Schedule the timeframe clearly
Action Driven Data Analytic Solution, so that team can build the action plan efficiently.
Arrange the training regular for new comers and refresher training for the existing member
Read More about Brand Review and Implementation at Retailer Stores
How Analyzing Sales Drops Can Uncover Key Pain Points
In the fiercely competitive retail market, every player is compelled to undertake numerous activities, some of which yield positive results while others do not. Conducting regular category or brand review analyses is a standard practice for both retailers and suppliers to gain insights into shopper behavior and their objective is simple: identify the causes and take corrective actions. For the corrective actions to be efficient, they need to address the right root cause
In this article, we review how data patterns help identify the 5 main causes of sales drop so the right corrective actions can be setup and address the right pain effectively
1. Range Change Impact on Sales
Shoppers can switch to other items or switch Retailer stores.
Shoppers visit the stores to purchase the products, so range variety is the most critical factor for Shoppers to choose the stores. When a Retailer deletes the SKUs, what several scenarios can happen:
Shoppers switch to other products within the same brands
Shoppers switch to other brands in the same category
Shoppers switch to other categories
Shoppers Switches to other Retailer Stores
We can reduce the scenario by 2nd and 3rd if we customers well the Shoppers decision tree
Data pattern: How can data help you find out if this is the right scenario
Sales lost only the deleted items, while other items can be maintained or slightly increased
Sales dropped in the month of item deletion
Sales dropped across all channels that were selling the product before
Sales increase in other stores nearby the stores where the product used to be sold
Corrective Actions:
Re-negotiate the distribution agreement
Launch new items
Increase visibility of remaining top selling items
2. Price Change
Sales significantly dropped across all channels during the month of price increase.
When Brands increase the price, Shoppers behavior’s are often grouped in 5 main types, depending on Brand Loyalty and how important the category for shoppers is.
Shop the product as normal
Switch brands for a while and come back later
Switch brands and never come back
Stops buying in the category for a while and return to buy that brand later
Stop buying in this category
Data pattern: How can data help you find out if this is the right scenario
Sales units per store dropped only in the increased price items.
Sales units per store start dropping in the month of the price increase.
Sales units per store dropped across all channels. It might be a different level of decrease, but it should decrease.
No issue with the Stock and Service level in the month before or that month
Corrective Actions:
Create a promotion after the price increase
Ensure the price change are proportionally equal across all channels
Ensure your price index level is maintained with competitors’ brands
3. Availability
Verify by checking the sales pattern of the store with no stock issue.
When Shoppers face out-of-stock, 4 choices depending on brand loyalty.
Delay the purchase to the next shopping trip
Switch products on return to the Brand when it is available again
Permanently Switch Product or Brand
Switch to nearby store
Data pattern: How can data help you find out if this is the right scenario.
Sales will drop only during out-of-stock periods. The time period required for shoppers to go to scenario 3 depends on the Store format: the smaller the format, the shorter the period.
If the availability challenge happens in Store with a service level greater than 80% in the month before and that month, then the challenge is not availability.
The substituted items of these products of these items – from that brand or other brands in the range – have a sale uplift
Market share is decreasing.
Corrective Actions:
Identify in which stores availability issues are happening to define whether the challenge is localized or global
Review your service level and setup a common objective with your retailer
Sharpen your sales forecasts and sales targets by store with your retailer
4.Weak Promotions
Promotion plays an essential role as a retail sales driver. It is also most time-consuming and least profitable activity for both Retailers and Suppliers.
It requires 4 success factors for Shoppers to purchase a promotion item:
The promo mechanism and product are attractive
The Shopper can see the promo signage
Shoppers can find that promo product
The promo product is available
If one of these factors fails, it might decrease sales due to the promotion in case we performed well last year.
Data pattern: How can data help you find out if this is the right scenario
Brand Promotion sales value decreases
The contribution of Promotion sales is dropping
The number of promotions is dropping
The sales uplift of promotion items is dropping
There is no issue with this item’s Stock and Service level in the month before or the month of the promotion
There is no price increase for that items
A similar pattern is found across all channels and stores where the product is promoted
Corrective Actions:
Review the promotion product selection criteria
Re-Centre your promotion planning approach
Ensure each promotion objective is jointly decided with your Retailer
5. Distribution Change
From a Shopper’s Perspective, no distribution or out-of-stock has the same impact. It means Shoppers cannot purchase that product in the store at that time.
Therefore the data pattern is similar to availability issues
Sales will drop only in the period with no product in that store (or out of stock)
If the delivery mode is direct to stores, the issue might not happen to all stores. In the store with a service level > 80 in the month before and that month, sales should not decrease
The substituted items of these items should get some positive benefits in the same stores
This brand might lose market share, especially in the less brand loyalty category
Corrective Actions:
Ensure the products whose distribution is reduced are not Top selling items
Ensure all top selling items are distributed in every branch
Ask your retailer to share its distribution and assortment cluster strategy so you can help and suggest
Onuma Patthamakanokporn (nicknamed Bee) is Hypertrade’s Data Director. With a strong retail and data analytics background acquired with Tesco and Dunhumby in Thailand, she helps manufacturers in SouthEast Asia, Middle East and Africa make the most of their data sets to drive continuous and profitable growth.
In a recent article, Randy Bean was sharing on HBR that while investments in digitalization were poised to continue, most companies that invested (in a survey across Fortune 1000 companies) were harvesting very little of the expected results.
Randy then shares 4 main recommendations for companies that aspire to leverage data and analytics to transform their business: Focus on Cultural Change and its Business Impact; Start Small; Build Strong Partnerships and Don’t Forget About Data Ethics.
At Hypertrade, our job is to help medium-size – and often family- owned organizations leverage their data to transform their business. Therefore these 4 directions resonate strongly with what we do every day and the practical experiences and challenges our Teams have to address.
In this article, we want to focus on the Start Small and Focus on Cultural Change components. Yes, they do slow the project’s progress at its earliest stage, but the global buy-in and the transformation are stronger, delivering better and more sustainable results in the latest stages.
We are happy to bring our 5 cents sharing on some of the things we do – after failing and learning a few times – and that worked.
Cultural Change and Business Impact
Our experience tells us this is by far the most important success factor to be considered in a transformation project. While everyone seems to be aware of it, business agendas tend to neglect it as it is often perceived as an obstacle to a quick ROI. It’s going to take time and money; it will delay our ROI on technology investment are often heard. In reality, the time invested in driving Cultural Change and assessing Business Impact is a critical success factor.
Imagine a highly successful family business that grew over generations thanks to a visionary leadership, where each challenge was addressed and solved while maintaining a solid grip and control over business decisions and operations. Over time, some of the solutions found became bottlenecks, some of decisions processes that had been set up became brakes. When the Leadership perceives it is time to transform the organization, they are often aware about the changes it will require, but they also often underestimate the resistance to change they will face. Another factor that is also often overlooked is the Teams data literacy, and the appetite – or absence of – they might have towards data and technology tools.
In our practice, here are the activities we propose to our clients, when installing a merchandising, category management of CRM solution, to help their Teams throughout the transformation journey.
Key Process Mapping & Business Impact with Senior Management
The leverage of data will primarily impact 2 main business components: decision-making and communication. For each of them, it is important to identify:
for the selected processes, what are the commonly perceived and identified bottlenecks?
what impacts data and automation will generate on what already exists in terms of cultural values, time, costs, constituencies, and roles?
what do we want to maintain? what do we want to change and why? How do we want to build the continuity and alignment with the values in place?
what measurable results & gains are we targeting?
what tangible benefits for the Teams and individuals in place?
Preliminary Key Processes Workshops with Teams
Before even training teams on the new tools, we organize workshops on existing business processes. in these workshops, we put on paper the unofficial decision-making to understand how things are getting done, what are the bypasses that are used. We also put a lot of importance in understanding where are the pains both perceived and experience by the teams.
The information we capture at this stage are then used in internal communication to not only sell the project, but also to capture feedback to improve and adjust the initial plan back with Senior Management.
New Process Implementation’s Key Factors Of Success
Change Management Sessions
The Change Management Session are maybe the most important ones. They are also the most difficult. Their facilitation requires 3 mindsets: storytelling, selling, and planning. As in all workshops, the beginning sets the tone. We always begin with what already exists, with a probing approach (ie please confirm that our understanding is correct). And what already exists is:
the existing process
the existing pain points.
We then move to the selling part (what is in it for them, the Team, the Company, in this order) where we are careful to record the level of support.
We close with the planning part, where we will also ensure that we record all comments, suggestions and gauge the level enthusiasm.
Data Literacy Training
In order to ensure all teams, have a common level of understanding, we are taking 3 actions.
organize data training which are linked to the working processes teams are performing. In our industry, for example, these will be short sessions on Assortment, Promotion, CRM or Distribution Management
organize this knowledge in a wiki that me make available to all teams (HPT Pedia)
“Change In Motion” Sessions
For every new process working session, when we train about how a process is going to be done differently and supported by data (see Start Small ), we always follow the same workshop structure, building in what has been learned during the Key Processes workshop:
what is the process all about.
how it is being currently done.
the pains and obstacles admittedly met.
what are the pains and obstacle solving benefits the revised process will deliver?
what are the key differences between the old way and the new way?
what is the implementation plan?
We also make sure that enough time has been planned for the Transition. Giving it 2 or 3 months gives enough time with teams to become familiar with the process and the tool and have additional training sessions or refreshers when they require it.
Start Small
As a solution provider, we used to think that a project could be considered successful a few months after the complete setup of our solution. After all, our solutions are simple to use! Working predominantly in the retail industry, we therefore used to suggest a complete roll out across all categories and formats at once. Our rationale was that it was addressing the Client’s Senior Management who wanted it to be done quickly.
The results were almost always the same: only a few teams were really using data and they transformed their performances. But several other teams, people managing categories of a lesser importance, or related business units that were not directly concerned, had not been allocated enough time and efforts, and progressively lost interests.
We might have helped our client break data silos, saved time and helped capture business opportunities, but we did not help our client drive the complete transformation they had in mind.
Small… but connected
For a Start Small approach to be successful, we learned that it requires a clear definition of each of the following steps, the value each step will bring and their inter-dependencies. It sounds obvious, doesn’t it?
It is usually not too difficult for Teams to identify the several steps of change. What is more challenging, and requires reflection, is the order in which they would be best implemented. At least 5 factors need to be considered:
easiness to do.
level of potential resistance.
identifiable and measurable gains when implemented.
what impacts on other business processes?
what other steps it enables to do
Because each organization is unique, the importance of each factor will vary. What we are certain of, however, is that by-passing this assessment and planning session does not accelerate the project.
Change Blocks
Once the steps planning is finalized, we are starting to build what we call Change Blocks. A Change Blocks is made of 3 main elements:
A timeline that starts with the process mapping and ends with the beginning of the roll out.
The change drivers (process mapping, change management and change in motion sessions. Data Literacy, training and roll out)
The business characteristics of the process we want to change.
Each block must precisely detail what are the Change benefits for the Company, the Teams and the Individual
For each block, Business Processes, Data Literacy, Change Management (that include implementation plan) and Coaching sessions are estimated and planned. The communication and project management of the transformation becomes also much easier to visualize and comment.
A Change Block can be easily represented as a card (see below), and the Card put on a calendar.
An example of what we call a Change Block. It makes it easier to plan and visualize the change’s evolution
This practical approach to change management has proven to be generating a better traction and support from our Clients’ Teams:
a better visibility on why we are doing this and how this will happen.
a justified feeling of being part of the change, with a role to play.
an officialized “adaptation period” that decreases fear.
With continuous and permanent change, we are all directly or indirectly involved in change management projects. We are happy if you can share your thoughts and experiences with us!
Communicate: the first partnerships are internal
Keeping Teams informed and sharing information as openly and honestly as possible, from what is in it for them to how will this happen is maybe one of the biggest challenges. There is a set of populations where we pay a particular attention: the end-users. We want to help them build an awareness about the additional value they will bring thanks to the project.
In addition to the Change Management andChange in Motion sessions, we found that some additional media were quite useful: regular Newsletter, Leaderboards, as well as specific internal chat channels (we use Teams and love the “praise” function!) for example.
If the HR Team already runs these channels, it is great to embed the Project Communication into it. If not, they are easy to setup and a responsibility of the Project Management Teams.
We also love the solution WeGrow, which makes sharing field experiences and success fun and super-efficient.
“Effective communication is 20% what you know and 80% how you feel about what you know.”
Jim Rohn
Building on Rohn’s quote, heart (with solid planning!) might be one of the best drivers for change.
About the author
Frederic Klein is Hypertrade’s Operations Director and Frederic Etienbled is Hypertrade’s founder and CEO. With their Teams, they oversee the implementation and support of Hypertrade’s Merchandising, Category Management and Retail CRM solutions in South-East Asia, the Middle East and Africa. They both have prior extensive retail experiences. They can be reached at f.klein@hyper-trade.com and frederic.e@hyper-trade.com
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