Big data

Data” was only realized after the scanners were multi-dimensional software were made broadly installed. One could say that the data were the available. Twenty-five years ago, Big Data genre- “exhaust fumes” resulting from the primary use of dated by PUC point-of-sale scanners changed the The scanners to eliminate the costs of price marking face of marketing in the consumer packaged goods Oust as today, Big Data are often defined to be data (CUP) industry by causing marketing spending to that are a by-product of the use of a computer to tilt ominously in favor of price discounts and away solve an operational problem). Cent years, from advertising. Today, real-time digital Big Data generated by From the Analog Audit to Digital Scanning: the Internet offer the ostensible benefits of pro- The Impact on Short-term Marketing Strategies viding consumers with an easy way to find the Before the advent of scanner data, CUP marketers lowest price for any product while also arming had to rely on bi-monthly manual audits of stores marketers with dramatically expanded advertising to understand the trends in their brand sales and optimization capabilities. Arrest share at retail (See Figure 1). The data were Marketers would be wise, however, to heed the sessions of history and recognize that for all the not available until six weeks after the end of the bi-month period. Benefits Big Data afford, they also come with per- Then, suddenly, retailers and manufacturers had ‘Is that may not be as readily apparent. Ultimately, timely access to weekly (and even daily) scanner real-time digital Big Data must be used correctly if data.

The granularity of these new data clearly they are to have a positive impact on brand health revealed the substantial impact of short-term mar- and improve marketing return on investment (ROI) kiting tactics, including temporary price reductions tooth today and in the future. Supported by newspaper advertisements (which communicated the price) along with prominent in- HISTORICAL PERSPECTIVE store merchandising support-?often in the form of How the Availability of Data Has end-aisle displays (See Figure 2).

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Transformed Markets Though auditing data showed a relatively stable Back in the sass, the motivation for retailers to bi-monthly sales trend, weekly scanner data clearly invest $1 50,000 to equip a typical supermarket with revealed the large and volatile sales increases that PUC scanners was not the value of the data they occurred when newspaper feature advertisements would obtain but rather the cost savings from not announced price reductions and in-store merchant- having to price mark each of the hundreds of thou- dosing support was implemented.

Armed with this sands items on stores’ shelves. With scanners, it was type of granular information, retailers were able to necessary only to display each SKU (stock-keeping pressure manufacturers for more trade-promotion unit’s) price via a sign at the shelf because the check- dollars, and manufacturers-?as a result of the out cash register obtained the price for each undivided- tillers’ pressure along with their own desire for all item by looking up the item’s PUC code in the a short-term sales lift-?willingly increased their store’s PUC/price file as the item was scanned.

With this advent of these new data sources, CUP marketing Business often looked quite stable underwent a fundamental marketing shift from advertising to price discounting. Bimonthly Brand Sales 50 Today, software giant SAP GAG reports that the average CUP manufacturer spends fully 67 percent of its marketing budget on trade promotion and 10 percent on direct- $ Millions to-consumer promotions (mainly cents-off coupons), whereas less than 23 percent is 20 spent on branding advertising. With so 10 much being spent on retailer incentives that, in turn, then are used to temporarily

Jan-Feb. Mar-Par May-June reduce price, the concern that resonates July-Gauge through the industry is that brand equity Figurer Market Information in CUP Before Scanners: Brand Sales Measured by Bimonthly Manual Store Audits is being eroded as consumers become “trained” to buy on the basis of price discounts alone. That’s an unhealthy situation for any brand. Big Data in the Digital World: but weekly scanner data revealed to retailers and manufacturers the huge short- term impact of trade promotions. 70 % Volume Sold (Newspaper/Display/Price Discount) Dollar Sales -10 Jan 12 Jan 19 Jan 26

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