Real-time, hyper-local data helps retailers and CPGs manage price inflation
Grocery price increases are no longer a surprise to consumers, not in the wake of today’s dramatic inflation.
Despite this, food retailers have shown a reluctance to pass on GIC price increases to shoppers, often due to a lack of adequate information about what their retail competitors are doing.
CPGs must take the initiative not only to “take the prices” (decide when to raise prices for their retail partners), but also to show retailers the data on which they made their decision. This ensures that each party maintains healthy businesses and that relationships with business partners are as smooth as possible. However, it is difficult to achieve this without real-time data on the state of the market and the actions of competitors. The best approach is to effectively manage price increases through shareable, real-time, hyper-local data.
A Perfect Storm of Inflation Factors
It is essential to examine why GICs and retailers are facing such price inflation. Reasons include supply chain hurdles and labor challenges about two years into the pandemic, and soaring prices for key commodities – from lean hogs to corn to soy – have become subjects of widespread attention.
CPGs and retailers relay different views
Differences in perspective between CPGs and retailers make the situation even more complex. GICs can recognize that their margins will erode unless they raise prices. However, even though GICs take the price, retailers are often reluctant to pass it on to consumers. They fear that such a decision will lead to a competitive disadvantage, whether or not they have the data to prove it.
Real-time data overcomes barriers. CPGs can leverage data to drive price increases, and Datasembly specializes in providing real-time, hyper-local and shareable data for this purpose.
Consider the example of a detergent manufacturer who needs to demonstrate to a retail partner the data used to adopt a price increase. It leverages and shares real-time data, which shows that a major retail competitor has raised detergent prices across a wide range of stores nationwide. real-time data Illustrates the exact store-level changes by the retailer, with the objective encourage the client to act on price increases in key locations approximately 20 weeks earlier than they would have with other data sources.
Benefits of data sharing
GICs that share data with retailers have many advantages, including:
- Faster and more sustainable implementation of price increases by retailers.
- Reduced chance of retailers delaying price increases and instead looking for additional CPG trade spend to compensate.
- Easier tracking and execution of price increases in stores.
- Improved ability to work with retailers on assortment changes by providing greater visibility into competing retailers’ assortments.
- Improved visibility into how a retail customer is executing store-by-store new product launches to ensure these efforts are progressing according to plan.
See data intelligence in action
Retail price information is particularly useful when analyzing the business of multiple competing retailers.
Consider this additional example: A leading battery manufacturer is raising prices in response to rising raw material costs. Retailer A and Retailer B respond with their own price increases, while Retailer C does not. The manufacturer cannot require Retailer C to do the same, but uses Datasembly intelligence to demonstrate price movements in the market. As a result, Retailer C discovers that all of its competitors have already raised their prices and not to do so would be a missed economic opportunity. He implements a price change about 9 weeks earlier than he would have, and the price increase holds. Both the manufacturer and the retailer realize an increase in revenue.
Datasembly’s unique perspective on product data
Datasembly is a product data expert, providing hyper-local and real-time competitive intelligence on prices, promotions and assortments of physical and online stores. The platform collects billions of product observations daily which are organized and provided through tools, dashboards, alerts and visualizations. Using Datasembly’s proprietary, custom pricing platform allows organizations to meet their unique needs. GICs receive “store-identical” retail price data collected from public sources, such as websites and mobile apps.
Datasembly also leverages its product data to track and understand price trends in the grocery space and provides a free resource, its Grocery Price Index. index measures weekly changes in grocery prices using data collected from over 130,000 stores and over 180 retail banners covering over 30,000 zip codes across the United States.
Transparency enables smarter decisions
Access to real-time, shareable data makes CPGs better and more efficient business partners. It enables transparency, faster, fact-based decision-making, earlier planning, and improved retailer-CPG relationships. This is the kind of result that promotes business success and trust between partners.
This article is sponsored by Datasembly