Business Intelligence and CPG/Retail

Business Intelligence and CPG/Retail

In a former life I led a national CPG (consumer packaged goods)/Retail practice focused on assisting clients with implementing their business intelligence (BI) solutions and helping them understand how to get the most value to their organizations from these systems.

As with every industry vertical, there is some uniqueness to CPG/Retail market.  I am very confident and feel strongly that BI can have a very positive impact on these organizations.

To that end, what are some of the questions CPG/Retail companies are asking or should be asking? Among them:

  • Who are my most profitable customers?
  • How can I use predictive analytics to increase the number of items purchased per transaction (attach rate)?
  • How can I optimize my pricing structure?
  • How can I analyze inventory turns to improve sales?
  • How can I predict customer buying patterns?
  • How can I improve the data quality of my customer information and therefore reduce costs and improve customer value?
  • How can I analyze the effectiveness of my promotions?
  • How can I improve the efficiency of my supply chain?

BI can provide deep analysis and answers to these questions and more.  This allows for organizations to make informed decisions about the business in order to improve operations and effectively improve the top and bottom lines.

One of the mantras we always preach here on this blog is the importance of aligning metrics across the organization to ensure you understand everyone who is impacted by business intelligence.  Let’s look at the various roles within CPG/Retail and what those roles are truly interested in, information-wise:

  • Marketing and Sales VP:  Interested in cross-selling, up-selling, improving customer intelligence and sale, campaign and promotion performance.
  • Category Manager/Brand Manager:  Interested in the specific details about brands and categories of products.  Responsible for increasing the sales around a category/brand of product.  Also seek information about shelf placement/optimization and promotions.
  • CIO:  Interested in integration, total cost of ownership, ability to execute, ease of use, ability to meet the demands of the business.  Should be interested in how to achieve the results the other business leaders are interested in.
  • CFO:  Interested in accurate analysis of profitability.  Profitability by brand, category, customer, product.   Interested in time to value and increasing margins.
  • VP of Supply Chain:  Interested in the deep analysis of inventory turns, supply chain effectiveness, vendor quality and performance, overall decreasing every penny from the supply chain.

It is critical to understand what interests these various organizational leaders, because they are the chief information consumers when it comes to strategic decision-making.  Further, when designing a BI solution, it must be understood how these metrics must align and interrelate, how dimensions must be built, and how BI promotes the solutions for all involved.  If BI isn’t a decision-enabling platform for multiple stakeholders who have differing views of the business, then it’s not done right.

Incidentally, an excellent example of business intelligence and predictive analytics for CPG/Retail is this one for Cabela’s.  This is well-done and easily understood.

Questions?  Comments?  Kvetches?  I’m always available via email.

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