For CPG and technology manufacturers in the retail consumer market, the sales through the cash register are important. It is a major component of the total information they need to forecast, plan and distribute their products.
Most retailers make this data available to their suppliers so they can better forecast and replenish the retailer distribution centers and stores. In practice, this is achieved through the VMI relationship. So the best place to look for your sell-thru data is your supply chain.
Sources of Consumption Data
The best source is the channel closest to the consumer. Although the retailer has the cash register data, they may have difficulties organizing, analyzing and verifying the veracity of the aggregated store-level data.
Mass retailers like Walmart and Target are exceptions. They have sophisticated retail-based systems that provide the data to their supplier partners through the Walmart Retail Link and the Target Partners Online system respectively.
The solution to the issues that arise is Syndicated data.
Commercially available syndicated data can be found in the following sources:
1. AC Nielsen's
Since Walmart and Wholesale Clubs do not provide cash register data to the Syndicated data sources, the data available from these sources are ex-Wal-Mart and Clubs. To compare it to the total channel shipments, you have to get Wal-Mart and Clubs POS data directly from the retailers and add it to the Syndicated universe.
Setting up a data warehouse to extract, clean, aggregate and load the POS data from different sources has become very important for manufacturers in the recent years given its importance in market planning as well as in supply chain forecasting.
We have seen some classic database systems and data models used by some companies. However, this is a very challenging endeavor and needs expertise and knowledge of both the data as well as systems to develop this database.
The Syndicated data covers most of the shipping universe however sales from small mom-and-pop stores and beachside stores are not tracked largely due to the difficulty in tracking down the cash register data from these outlets.
The data providers usually estimate a factor for these using shipments versus consumption over a number of years. Hence this is really a derived estimate and a certain sense of business judgment is required.
If you have a question or comment