Better Data Means Better Partnerships for CPG Brands
If CPG brands want to know how their products will perform over the next year in the convenience retail market, then it’s high time they pay more attention to how they are using data to make pricing strategy decisions. We understand that highly inelastic products like gasoline will perform well no matter the price. But what about the CPG products that make up the bulk of convenience retail sales? How can brands optimize their pricing and marketing strategies when partnering with these convenience stores?
The answer lies in sales data -- but not just any sales data.
Wouldn’t it be great to have access to SKU-level sales data from a network of independent convenience stores that get missed in other reports that focus on larger convenience store chains? There are literally thousands of smaller retailers that brands can create strategic partnerships with in order to increase sales projections. In fact, almost 80% of convenience stores are either small chains or independent stores.
How Access to Better Data Helps Brands
At the start of the pandemic, economists were expecting a baby boom that would result in an increase in the sale of baby products. While that baby boom didn’t happen, retailers did see a boom in pet product sales due to the increase in pet adoption. Another consumer trend we saw was an increase in making coffee at home. Consumers started buying bags of coffee beans to make their favorite brew from the comfort of their own kitchen. Will this trend continue as the pandemic continues to evolve, or will consumers return to buying their coffee from their favorite convenience store location? Only high quality data can help brands make a more informed decision.
#1 Better Data Helps Brands Make Better Pricing Decisions
Having access to quality data increases efficiency in the decision-making process so that brands can make better decisions in regards to pricing and marketing strategy. Skupos Insights is the tool that helps brands become more effective at data collection and analysis that helps them determine how to approach new convenience store locations. With Insights, you can construct a more informed pricing strategy that can include:
- High and Low Pricing: use temporary price reductions to attract customers
- Competition-Oriented Pricing: Pinpoint items that are most popular with customers in a target region and price it competitively with similar brands
- Suggested Retail Price: Pre-pricing popular items can ease retailers of the burden of decision-making
#2 Identify High and Low-Performing Stores and Regions Based on Pricing
Better data allows brands to identify high and low-performing convenience store locations and regions. This data can be used to replicate what is working from one location to the next. Want to know if it’s better to plan your pricing based on your gross margin profits versus the markup price? Brands can perform their own data analysis using Skupos Insights to identify programs that are considered high-performing. The highest performing locations can offer clues on how to create a stronger pricing strategy in lower-performing stores and regions.
#3 Set Brand Goals that Prioritize Your Pricing Structure
A solid pricing and marketing strategy is built upon the determination of baselines, benchmarks, and goals that can only be set with access to high quality data. Brands can feel confident when using Skupos Insights to establish baselines that help them determine what products are performing well. From this point, brands and retailers can create a pricing strategy for new items. Here is what a new item pricing strategy can look like:
- Line Extension Pricing: New items can be priced the same as or similar to items already in that line
- Key Value Items: Price perception matters when determining the price for items that are of high value
- Pre-Priced or MSRP: Items that have been pre-priced or come with a suggested price can be used as a baseline determinant of how to price in the future
Skupos Insights helps brands utilize reliable data to help them create stronger relationships with independent convenience store outlets they may otherwise not know about. When it comes to developing a pricing and marketing strategy, the right data will help brands navigate a market that is unpredictable in the current climate.