By Sara Guilmette and Susan Viamari, IRI
With consumers continuing to panic-buy and stockpile items from the grocery store, the CPG sector is on the front lines of the rapidly shifting COVID-19 pandemic. To keep pace with the changes, everyone is now operating in hyperdrive.
During the last several weeks, IRI has seen dramatic shifts in who, what, where, when and how much consumers are buying. Who knew toilet paper would become such a hot topic?! We can chuckle, but the problem is very real: CPG manufacturers and retailers are struggling to keep up with demand – sometimes unexpected – in a way that no one could have anticipated.
The pandemic is impacting geographies and demographic populations very differently and at different times. And so it goes, too, for the CPG industry. For this reason, having a customized view of consumer and CPG impacts down to the zone (even store!) level is critical right now.
One national retailer has been using a COVID-19 dashboard to guide its actions on the front lines of the COVID-19 CPG battle. The dashboard reflects three critical principles of success:
- Keep it simple
- Knock down hot spots
- Do it together
Keep It Simple
With the speed of change we’re all experiencing, companies must keep things as simple as possible. By creating high-value product groupings – products that the retailer’s team identified as playing a key role in serving its shoppers throughout the pandemic – the team was able to hyper-focus its efforts. This high-value product grouping is being carefully monitored daily to minimize disruptions in product availability.
Some of the products being monitored – such as cold, allergy and sinus products – face normal, seasonal demand fluctuations. To strip out seasonality impacts, the team created an analysis to benchmark performance within the retailer versus the rest of the market.
Knock Down Hot Spots
Next, the retailer dialed into the true sales trends of the product grouping to understand how the pandemic has been impacting sales. By monitoring sales trends within the retailer versus the rest of the market, it was able to rapidly identify potential out-of-stock issues (hot spots) and quickly remediate.
Between weeks eight and 10 of the pandemic, the retailer noticed a drastic change in trends. This warranted further exploration.
Adopting a heat map view showed the retailer that it was underperforming in the rest-of-market across New England and a handful of other states but overperforming in the rest-of-market in the central U.S. and Southern states.
In areas of concern, the retailer isolated UPC-level insights to understand which UPCs within grouping were associated with the underperformance trends.
The data clearly illustrates that distribution center (DC) service levels fell sharply across four high-value products. As the DCs struggled, store-level inventory dropped quickly. Impacts on sales were significant; the impacts on shopper experience (and long-term loyalty!) could be even more significant.
Do It Together
With these granular insights in hand, the retailer was able to go directly to its CPG suppliers with hard data that demonstrated that critical inventory shortages have had a profound impact on sales trends. Suppliers were willing to work together to address these data-supported issues and better meet demand. They are acting quickly to adjust allocations, ensure inventory rightsizing and get sales (and shopper experiences) back on track.
With this issue being better managed, the retailer continues to monitor for trend disruption. It’s a herculean task, and currently there is no end in sight. But to keep pace, retailers and suppliers can work together to be hyper-diligent about what they focus on, prioritize and optimize hot spots, and ensure that shared insights move quickly from “What’s happening?” to “What do we do about it?”
For more information, contact your IRI representative or reach out to us at CollaborativeGatewaySolutions@IRIworldwide.com.