A change has come to consumer packaged goods, and we’re watching it hurt big brands, drive mergers and acquisitions, and transform how companies understand their business. If you’re managing your business all-commodity volume (ACV) above all else, you just might be the next casualty.
Modern category management principles have transformed the shelf, and it’s never going back. You can’t go back either.
Understanding the Moment of Truth
For many years, the CPG industry has relied on account-based data to track business operations at a high level but struggled to know what was happening today, right now. It lacked the detail to truly understand what we consider the moment of truth: the seconds the truly drive sales at the shelf.
We believe that your business needs to know and act on this moment to succeed. Failure to address shelf-level metrics is leading to significant changes in the industry right now. Amazon and a wide array of emerging brands, or new entrants from old powerhouses, are now competing at the store level and changing the game.
Shelf-level data and the sensors that power it tends to be in the hands of new players who are willing to invest a little more in the data side of a launch. “Big CPG” is losing the battle on many shelves, especially as consumers are blending their time between chains and boutique storefronts. You might have unknowingly seen the results of this trend as large CPG buyout their competition.
Think of the natural specialty boom, where emerging health brands competed heavily to gain shelf space. They had to beat out each other and the major brands, so they got inventive with targeting and shelf-level battle as well as packaging, consumer preference trends, and product taste. Their efforts led to one of the biggest shifts away from entrenched brands in recent memory. Moving forward, however, you may find that one of your favorite specialty brands is now owned or funded by one of the larger CPGs.
In almost all categories, the same consolidation has been the norm.
To compete, you’re going to need to look for ways to evolve beyond the world of category ACV. The next generation of competition, differentiation, and category management is at the store level.
Getting Data Together
Store-level data and shelf-level management have been historically difficult to track and understand, but software and systems are now making it available to you. Category management at the store level, with store data, is here thanks to automation and new services.
You can tell it’s the future because brands like Amazon have thousands of data engineers already working on the problem in their warehouses and brick-and-mortar locations. One less discussed aspect of its Whole Foods purchase is the fact that Amazon just got a major testbed for shelf-level data at stores with an existing customer base.
Your competition, growing from the latest brands and established players changing their tactics, are looking at shelf-level data as a core strategy. It’s time for your brand to take the next step forward, and there’s good news when you start.
We’re not just talking about Shelvspace’s retail shelf management solutions. The data integration, reporting, mobile field management, and even the crowdsourcing for audit support that we offer all play a larger role in this space.
Data from partners is becoming increasingly accessible. The hard part left is taking this data, combining it, making it actionable, and determining business strategies you can put into execution. The past lack of economics with people has a viable alternative now too: crowdsourcing and better execution flows owned by distributor and retailers. It’ll help CPG manage store-level and shelf-level cost efficiently with high ROI.
For your business, it all boils down to the fact that the past complexity of shelf and store management is now much simpler thanks to retail shelf management solutions, and we’re a little partial to ours.
The next generation of CPG is going to be fought at store and shelf level using data, automation, and retail shelf management systems. Your competitors are starting to realize this and that they’re underpowered in-house to win this fight.
When you’re ready to strengthen your retail shelf management, we’re here. The best way to get started is to learn what you might be missing with a free, real shelf audit.