These price increases have historically taken 13 weeks or more to pass along to their retail customers. The historical process relied on syndicated, averaged data which created communication gaps and confusion because that data wasn’t shareable. Equally the process lacked store-level data and frequently resulted in the tedious task of “store visits” to audit pricing on the shelves. An incomplete view at best.
Some retailers were reluctant to move prices up because they were afraid competitive retailers in their markets were not yet increasing prices. The longer this situation persisted, the manufacturer risked other retailers offering sales, increased requests for trade spend, or reverting the price increase which would be bad for their margins. All of this made it less likely for the manufacturer to keep that price increase in the longer term.
Through the use of Datasemby’s shareable, real-time, hyperlocal data this manufacturer was able to pass along the price increase in 2-3 weeks instead of 13. They were also able to share Datasembly data on certain competitive retailers (Walmart and Kroger) to other retail partners (Meijer) to illustrate the change in the market and help that partner with their planning.
Without shareable real-time data, it can be difficult for a CPG to pass along price increases effectively and efficiently. Retailers may lack crucial visibility into the competitive landscape causing them to make uneconomic decisions. This can result in inconsistent moves, damaging the CPG’s brand perception and long-term retail relationships.
For this leading CPG full market changes that once took 13 weeks were shortened to just 2-3 weeks. A time savings of over 75%. That resulted in a 1.3% total revenue gain through faster price changes and a .2% savings on the overall trade budget. At the same time, their retail partner was able to enhance their margins while remaining competitive with Target and Walmart.