It goes without saying that data is crucial for your retail business. In fact, that’s an understatement. Conduct research online or speak to anyone within the retail industry, and you’ll find it referred to as lifeblood. This includes syndicated data. With this data, you can find opportunities not only to remain competitive but to beat your competition too.
What is syndicated data?
Syndicated data is a dataset sourced from multiple retailers within a given segment of a market. This data is purchased from retailers by third-party market research agencies who classify it into familiar hierarchies to generate market insight before selling it on to any business interested in using it.
In the context of retail, the most common businesses to purchase this data are your suppliers or manufacturers. Of course, this isn’t guarded information, so anyone can buy it should they want to, including any retailer interested in seeing what their competitors are doing.
As for its purpose, we’ve already touched on it. This data aims to provide insights that you can use to improve your market share while growing your retail business. We’ll delve into how it can help you further on.
For now, it’s worth pointing out that these insights focus on, amongst other aspects, your total retail market size and growth, and specific market share by product, category, and department.
How can syndicated data help you in your category management efforts?
Category management is, by its very nature, data-intensive. That’s another way of saying category management is wholly reliant on data to be truly useful. And it’s true. You’d only need to consider the six-step process for confirmation.
If you’ve studied this process, you’ll know that data plays a pivotal role throughout. But what exactly can you achieve by using this data? More importantly, what can you accomplish if you use syndicated data to inform your category management efforts?
Below are a few ways it can help you in this regard.
1. You can spot opportunity gaps in your assortments
But you can’t do it randomly. You need data. Of course, it’s not impossible without data. But, you’ll find it incredibly difficult to cater for and satisfy your customers, and will ultimately damage your reputation as a go-to store.
Some of the data you should look at when choosing your assortment includes your POS data if you’re a retailer; loyalty card data if you run a loyalty programme as well as your product data. And then, of course, any market or syndicated data that you’ve purchased.
That said, this is about more than merely choosing the right products to match your market. It’s also about spotting opportunity gaps within your product assortment.
With syndicated data, you can rank your top-performing lines in a category by value or volume. You’ll also be able to determine if you’re following the correct category roles for all different product groupings. For example, if you’ve given your Dairy category a Destination role, you want to ensure that the product assortment reflects that. Do you have 80% or more of the total products available in the market? If not, you need to fill this gap.
On top of that, you can spot gaps in your strategy. How? The approach you choose determines the type of lines (mix of products) that you’d want in your assortment.
For example, if you want to drive traffic through a category then Unit movement should drive the inclusion of products in your range. Or, are you looking to follow an image-enhancing strategy? Then you need premium high ticket lines. Meanwhile, for another category, following a profit generation strategy means you should include more high margin products.
2. You can compare which products are performing in your store versus in the market
It’s all well and good choosing the right products and positioning them appropriately on your shelf. However, that doesn’t mean that the products are going to sell. There are no guarantees in retail since consumer demand never remains the same.
But there is something you can do about it.
For one, you can monitor your products and take note of which products perform best over an extended period. If a product performs better than expected, you could look at giving it more space on the shelf. If it underperforms, it would need less (if a product isn’t performing as expected, you shouldn’t merely derange it or drop it from your planogram).
First, look at the data to confirm the drop in sales or unit movement. Also, look at the market data. How is the same product performing elsewhere? Is it experiencing the same sales dip at competitor stores? If no, then it’s not necessarily the product but instead your retail environment that requires attention. What can you do better in-store to increase your sales then?
It’s also worth considering if it's even the right product for your target market, although that is an entirely different topic on its own.
If the product is experiencing a dip in sales elsewhere, then it could be worth limiting your amount of stock or only stocking it during a specific period rather than all year round.
When analysing which products are performing well versus in the market, you can compare the following: Average Retail Selling Price, Flavours, Colours, Product Size, Pack Sizes and Format. In this case, ‘Format’ refers to Pallets, Cases, Shrinks and Singles.
3. You can better understand the external market and know where you fit into it
The beauty of applying syndicated data to your retail business is that it can provide you with key market insights that can help you to understand what your competitors are doing. Alongside this point is that you can learn how you match up to your competition so that you don’t fall behind.
For example, you can discover who is gaining market share and who is losing it. If it’s you who is losing market share, you can react quickly so as not to lose more. On the other hand, you can learn where you are gaining market share so that you can capitalise on it.
Still, it’s not just about market share. There are countless other facets that you can compare and monitor. As we noted above, you could compare your selling price against your competitors and the external market to see your position.
If you find you’re out-priced on everyday prices in the market, you need to consider whether your margins are too high or if you should renegotiate cost prices received from your suppliers.
On the other hand, you can compare your promotional pricing against your competition to see if it's up to standard, monitor how often you run out of stock versus how often a competitor runs out. You can also monitor your growth rate versus the market.
With regards to your growth rate, you can identify what is driving it. If your growth is stagnating, are you implementing planograms correctly? What is the state of your promotions? Have you chosen the correct pricing strategy?
As already noted, syndicated data offers you many valuable insights. It also compels you to analyse every aspect of your business and ask yourself tough questions.
4. You are better prepared to cater to consumer demand
As we’ve noted in a previous piece on how category management can cater to consumer demand, your goal as a retailer is two-fold. It’s to make money and to please your customers.
With syndicated data at your disposal, you can do both.
Here’s how: you can monitor the selling rate of your products within each category in-store to determine which are your most popular products and which are your least popular products. Now you’ll notice it’s very similar to a few points we made above. That’s not a coincidence.
By spotting opportunity gaps in your product assortment, comparing the performance of products against the market, and understanding where you fit in, you’re gearing your stores up to meet consumer demand head-on.
In fact, you have very little chance of failing.
With limited space availability in-store, you want to ensure that what’s on the shelf sells, and sells well. By basing your decisions on syndicated data, you can ensure this happens since you have the ability to see which lines are in demand.
These top lines can be included by brand, by size and by sub-category, among others, so that you can maximise your opportunities. Most importantly, you can give your customers what they want when they want it.