We keep hearing this word everywhere in CPG. The fastest growing brands in the space all attribute their success to living inside the data and making data driven decisions on a daily basis. But when you peel back all of the jargon, what does any of that actually mean?
First, let’s breakdown what data is available to CPG brands. It usually falls under two distinct groupings.
First Party Data
This is insights and information that you can collect from your own sources.
These insights can be captured from your email list, Shopify orders, or by using WeStock.
Any consumer touchpoint you have can be an opportunity to collect first-party data.
These data points are more actionable than third-party data because they often are tied to a customer data point with available contact information.
Third Party Data
Third-party data is owned by three main company’s in CPG; Spins, Nielsen, and IRI.
These data sets consist of scan data, which is purchasing data at the store level and shows you how you are performing in a particular account or region.
This data is also helpful when understanding competitors and in providing context for your performance.
Third-party data is great for larger brands with healthy budgets for these types of data sets, but very few brands know which data points to hone in on when it comes to third-party data.
Here are a two that we suggest focusing on:
Velocity - units per week/per store/per sku
This is going to be your holy grail metric early on. You will want to know the baseline units sold per week target for your category for each retailer you sell to. Target could be 8 units/per week and Walmart might be 12 units/per week, so make sure you are communicating with your buyer and know what number to hit.
$ Growth
$ growth can happen because of two things. You have either increased velocity in your current stores or you have increased ACV (new store count). You want $ growth to be increasing primarily because of increased velocity and not ACV growth, this means you are performing well in the stores where you are stocked.
One data point that brands get too fixated on early on is % growth compared to the category. Yes, you might have gone from 50 to 500 stores in a year, but that 900% increase is mostly a vanity metric since your low store count to begin with skews the data.
When you are ready to start purchasing third-party data (or forced to by a retailer/distributor), you will need to have a plan on how you want to actually visualize that data. The data comes usually through an excel or CSV and most brands will just cherry pick a few data points they can understand from the never ending columns and rows. Whether it is a data analyst or a platform, you will want to house and visualize that data with a provider who can turn it into actionable insights for you. There are too many brands who subscribe to expensive data sets and never use it to its potential because they are intimidated by the raw data set.
As more brands grow their online community and brands become closer to their consumers, first-party data has entered the conversation as a critical data tool for emerging brands. The issue is that most brands don’t even realize they are constantly collecting first-party data that can be useful in their retail strategies.
Types of first-party data include:
Email lists
Shopify/online order data
Forms
IRL customer interactions
First-party data is where we usually come in. WeStock can help you organize all your various customers in one place and show you exactly where those customers are in relation to your retail distribution. We can then help you fill in the gaps by collecting additional consumers through our tools and then deploy that data to help you drive consumers into your current stores and tell a convincing data driven story to new potential stores.
You can check out this talk below from our founder on data for emerging brands:
Data can seem like something that a brand can put on the back burner until a later date, but it isn’t a coincidence that most of the fastest growing brands in the space prioritize data. We recommend starting out by getting a handle on the first-party data that you already have access to. We would be happy to help you with this. Reach out to
The Importance of Data