Having worked in the Consumer Packaged Goods (CPG) and Retail industries for over 40 years and now serving as the CEO of Retail Velocity after previously being a partner in several large consulting firms, I’ve had the privilege of engaging with numerous C-Suite executives. During my conversations with them, I have been asked many questions, but one stands out as the most frequently asked (in various forms): "Should I use monthly, weekly, or daily retail data for the best decision-making?"
This article will answer that question for most situations, but here’s a spoiler alert—it’s daily data for 95% of those situations. This insight is one of the main reasons I joined Retail Velocity, an industry-recognized, highly experienced organization, in 2021.
Retail Velocity is celebrating its 30th anniversary in August 2024. During these past 30 years, we have seen many changes in the type of data and the way data is used in the CPG and Retail industries. Before the development and launch of our award-winning VELOCITY® retail data platform, CPG suppliers used monthly, weekly, or syndicated data for sales, marketing, supply chain, and other business decisions. They used this data for demand planning, demand forecasting, sales forecasting, promotional activities, inventory replenishment, and especially for reporting and analysis.
"In 2024, consumer brands that continue to rely on weekly or monthly POS and inventory data
are taking a short-sighted approach."
Similar retail data collection techniques have been in use since the 1980s, and many companies continue to use these same methods today. However, the best-of-the-best brands now utilize more advanced retail data collection methods that involve daily ingestion of point-of-sale (POS) and inventory data at an item and store level. This represents a tectonic shift for many CPG companies, as their business processes, analytics, and strategic decision-making may have been based on monthly data and processes. This evolution has proven to be highly beneficial for tasks and activities such as demand forecasting, retail replenishment, trade promotions, new product introductions, and ensuring on-shelf availability (OSA).
In 2024, consumer brands that continue to rely on weekly or monthly POS and inventory data are taking a short-sighted approach. This approach limits their organic growth and results in unnecessary expenses. It’s a huge leap to try and evolve from weekly data to real-time data in a short period of time, and many companies may struggle with this shift. Some companies might fail because they view daily data only as a technological solution, rather than an opportunity to enhance their business processes, obtain more accurate insights, and make better decisions. If you are considering moving from weekly to daily data, it’s crucial to take this step immediately and anticipate incremental improvements in various areas.
The improved granularity of retail data will have an immediate and larger impact on various parts of your supply chain, sales and marketing departments, and finance. The utilization of daily data will provide these business units with more precise information for collaborative decision-making, as opposed to weekly data, which only offers general guidance.
The need for daily data is present throughout the supply chain's finished goods, including stock replenishment, demand forecasting, phantom inventory isolation, store-level forecasting, and OSA. Imagine attempting to make informed decisions in any of these areas using weekly data, or worse, weekly data without 100% of your SKUs. This has been a common occurrence in many CPG organizations for the past 25-30 years.
How can you achieve trade promotion efficiency, let alone trade promotion optimization, without having daily data to compare pre- and post-promotional activity? Even if a promotion is carried out on a weekly basis, there are subtleties in daily demand that would be overlooked without daily POS data. Understanding these daily nuances has been proven to reduce promotional expenses and increase ROI.
"Daily POS and inventory data are essential for both physical store locations and e-commerce,
as decision-making using weekly data is only directional and lacks precision."
In addition to promotional planning, execution, and analysis, leveraging daily retail data enhances the entire Revenue Growth Management cycle. Just think about trying to assess the success of a new product launch without understanding the daily subtleties related to on-shelf availability, out-of-stock situations, and POS transactions. Now, imagine facing this scenario with only weekly store activity data or not recognizing the daily differences in the e-commerce channel. Daily POS and inventory data are essential for both physical store locations and e-commerce, as decision-making using weekly data is only directional and lacks precision.
Various sales and marketing areas such as pricing management, margin analysis, assortment optimization, product return management, and category management require daily retail data as opposed to weekly data.
The Retail Execution area is best served with daily data at an item and store level. Trying to replenish a store or shelf without daily data is like stepping back into the cash register era. Thankfully, in the point-of-sale and internet era, collecting daily data is not only possible but also the preferred method for precise decision-making.
Any department analyzing operations and making valid comparisons will benefit greatly from using daily data at an SKU and store level. Inventory analysis, trend analysis, broker management, distribution analysis, and planogram analytics are best served using daily POS and inventory data.
If daily data is important for warehouse-delivered products, it's even more crucial for direct store delivery (DSD) products. Daily data availability for inventory and POS purposes is incredibly important for warehouse and DSD operations, including stores and e-commerce.
High-quality daily data is crucial, but cleansed and harmonized daily data allows for more accurate and impactful decision-making. Other Retail Velocity articles provide more details related to cleaning and harmonizing data:
The downsides of using weekly retail data are significant and concerning. Here, we've highlighted the top 5 reasons to utilize daily retail data:
5. Weekly data is an improvement over monthly data, but both are only directional when compared to daily data
4. Weekly data cannot be accurate enough for trade promotion management, efficiency, or optimization
3. Never use weekly data for inventory replenishment if daily data is available
2. Avoid using weekly data to input into other systems and applications, particularly AI tools
1. Why base strategic business decisions on weekly data when daily data at an item and store level is accessible?
Only on rare occasions should a CPG company depend on weekly POS and inventory data, even if they think it’s “the traditional way we’ve always utilized data.” In the 1970s, monthly data was utilized, but in the 1980s, companies realized that using weekly data was more beneficial. It's now 2024, and it's clear that daily data is the way to go. Your process changes may be somewhat challenging, but if you delay transitioning to daily data, you'll fall behind industry leaders—and it will be apparent.
Consider that e-commerce data is very granular, down to the minute or microsecond, and many companies are seeing the benefits of it. New sectors like Retail Media Networks, streaming advertising, and AI-based tools (to name a few) have emerged over the last several years due to the advantages of these detailed online sales insights. Can you really afford to stick with weekly data in 2024?
Also, it's vital to use clean, harmonized daily data when inputting information into AI tools. It should be the only method for doing so. Starting the AI tool journey with subpar weekly data as a foundation won't yield great results.
At Retail Velocity, we have the expertise and proven automated processes to efficiently and effectively collect, clean, and harmonize large volumes of disparate daily POS and inventory data from any data source. This has helped many major CPG manufacturers harness the power of daily data and transform their organizations. With major retailers—and a minimum of 65 US-headquartered retailers—providing daily item- and store-level sales and inventory data, there's no reason to continue relying on weekly or chain-level data for important strategic decisions that impact sales, revenue, profitability, retailer relationships, and brand loyalty.
If you're ready to leave weekly and chain-level data behind in favor of collecting and leveraging daily retail data to grow your business, let's talk.