From Data to Dominance: Emerging Brands Thrive with POS Insights

Small and emerging consumer packaged goods (CPG) companies and brands often face unique and significant challenges to their evolution in today’s dynamic retail landscape.

One of the main obstacles they encounter is a lack of visibility into product and retailer performance, which is essential for informing strategies and decisions related to sales, marketing, product development, and inventory management.

Even if a company has established a solid product-market fit, it cannot assume that the factors that initially helped them enter stores and boost sales will continue to keep their products top of mind and on physical or digital shelves. Emerging brands must continuously demonstrate the success of their products to gain additional shelf space, increase market share, attract new retailers, and penetrate new markets.

With intense competition, shifting consumer preferences, and the complexities of supply chain management—and oftentimes limited resources and budgets—small and emerging brands must leverage every possible advantage and resource to thrive. One of the most powerful tools at their disposal is daily retail point-of-sale (POS) data. This treasure trove of information, along with daily inventory data, provides actionable insights into sales performance, consumer behavior, market trends, and more.

In this post, we will explore how leveraging daily POS and inventory data at both the item and store levels can transform an emerging CPG company’s strategy and execution. This includes optimizing inventory, refining marketing campaigns, driving product innovation, and improving on-shelf availability.

What Is Retail POS Data and Why Does It Matter?

At a high level, POS data refers to the information gathered during a customer sales transaction, whether the purchase occurs in a physical retail location, online, or through a mobile application.

This data encompasses a wide range of information and provides valuable insights that brands and retailers can utilize to enhance decision-making related to trade promotions, new product launches, pricing, product assortment, supply chain management, and retail execution.

Some key elements of POS data include:

• Sales Data: This core component includes information about individual transactions, such as items purchased, prices, quantities, discounts applied, payment types, and the total amount paid.
  
  
• Product Data: This consists of details about each product sold during a transaction, including product names, descriptions, SKUs, categories, and attributes like size, color, or style.
  
  
• Inventory Data: This data provides insights into retail stock levels for each product, including current quantities on hand, which items need replenishment, reorder points, stock movements (such as sales, restocks, returns, or exchanges), and product locations.
  
  
• Promotion Data: This includes information about promotions or discounts applied to transactions, including the type of promotion, its duration, and its impact on sales.

For emerging brands and CPG companies, POS data is more than just numbers; it’s a real-time feedback loop that connects consumer behavior with operational and strategic decisions. Unlike survey data or market estimates, POS and inventory data accurately reflect what is happening in stores or online, making it a critical asset for navigating and succeeding in the fast-paced CPG market.

9 ways EMERGING BRANDS CAN USE POS AND INVENTORY DATA TO STRATEGICALLY GROW THEIR BUSINESS

To set the right product pricing, convince a retail buyer to stock your product, or effectively promote your brand, it is crucial to have a solid and reliable foundation of retail data. Without this data, you will be navigating without clear direction, which can jeopardize your sales, revenue, retailer relationships, and brand reputation.

Using a cloud-based, automated data collection, integration, and analytics solution like Retail Velocity’s VELOCITY^® retail data platform, emerging brands can easily access and utilize daily item- and store-level POS and inventory data. This data provides insights that help brands understand their customers more deeply, refine their strategies, and drive profitable growth.

Here are nine specific ways that data can empower these brands:

1. Understanding Trends, Consumer Preferences, and Customer Behavior

Emerging CPG companies often strive to disrupt existing markets or carve out niches with innovative products. To achieve this, it is essential to understand market trends, purchasing patterns, and consumer preferences.

• Identifying Trends: In general, POS data reveals what is selling and what isn’t, providing a clear picture of market and purchasing trends. For example, a rise in plant-based product sales may indicate an increasing consumer interest in sustainable and health-conscious options. Moreover, analyzing which products perform best during specific times or seasons, in particular locations, or among certain customer demographics helps brands identify popular items, peak sales periods, and targeted preferences.
  
  
• Tracking Consumer Preferences: By examining different product variants, sizes, or packaging options, companies can tailor their product offerings to meet consumer demand better. For instance, a startup introducing a line of organic snacks can use POS data to identify which flavors or package sizes perform best in different regions. This information can guide product development and marketing strategies, allowing for more focused production and distribution efforts.
  
  
• Effective Audience Segmentation and Targeted Marketing: Incorporating and analyzing customer demographics, purchasing behavior, and online activity enables emerging brands to segment their audience more accurately. This allows for targeted marketing campaigns and customized messaging for different groups.
  
  
• Predictive Analytics: By tracking and comparing historical purchase data, brands can predict which products customers are likely to buy next, enhancing opportunities for upselling and cross-selling.

2. Optimizing Inventory, Product Allocation, and Supply Chain Management

Efficient supply chain management is critical for emerging CPG brands, where resources are often limited. Daily POS and inventory data at the SKU-store level play a vital role in aligning inventory levels with actual consumer demand and ensuring retailers have the products they need when they need them.

• Demand Forecasting: With granular data on sales trends (including seasonal trends), sales cycles, and market demand, companies can predict future demand more accurately, reducing the risks of overproduction, overstocks, or stockouts that can hurt your bottom line, consumer satisfaction, and brand reputation.
  
  
• Improving Retail Replenishment and Product Allocation: Accurately tracking sell-through rates and daily inventory positions ensures timely stock replenishment and minimizes carrying costs for excess inventory. By responsibly filling retailer orders, brands can improve customer satisfaction and retailer relationships. Example: A beverage company launching in select stores can use POS data to monitor initial sales. If a particular SKU sells faster in urban areas, they can adjust their inventory allocation to focus on high-performing stores.
  
  
• Product Performance / Inventory Turnover Analysis: By tracking how fast each product sells, brands can manage their cash flow more effectively. This allows them to allocate resources to top-selling items while guiding decisions about discontinuing or restocking slow-moving and underperforming products.

3. Gaining Insights into Market Penetration and Distribution

Small, emerging brands often struggle with limited shelf space and distribution reach. POS data provides valuable insights into where products are performing well and where there is room for growth.

• Store-Level Performance / Market Expansion: Analyzing daily POS data at the store level allows brands to identify high-performing locations and regions where the product is gaining traction, and it provides insights into why these areas are thriving. This analysis also sheds light on the reasons behind the success of these areas. Furthermore, it can help brands pinpoint expansion opportunities, such as partnering with other retailers or opening new stores.
  
  
• Product Line Expansion: POS data reveals which product categories or items are most in demand. This information equips emerging brands with insights into potential new products or product line extensions that align with customer interests.
  
  
• Targeted Distribution: Instead of pursuing broad distribution strategies, companies can leverage POS insights to focus on regions or retailers where demand is strongest. Example: A frozen food brand can use POS data to track sales across different grocery chains. If one chain outperforms the others, the company might negotiate for expanded placement or seek promotional support with that retailer.

4. Optimizing Pricing Strategies

Optimizing product pricing is essential for emerging brands to remain competitive and profitable. Access to item- and store-level POS data provides valuable insights that enable brands to adjust their pricing effectively.

• Price Elasticity Analysis: By studying how shoppers respond to varying price points, brands can identify the optimal pricing that maximizes revenue without deterring current or potential customers.
  
  
• Dynamic Pricing: Emerging brands can adjust their prices based on demand, seasonality, and competition. POS data helps track which pricing strategies result in higher sales, ultimately improving revenue and profit margins.
  
  
• Promotions and Discounts: By analyzing which promotions yield the highest returns, brands can optimize future discounts and sales events, thereby enhancing customer acquisition and retention.
  
  
• Competitor Pricing: By integrating and analyzing competitors’ pricing, brands can adjust their pricing strategies to stay competitive while maximizing profit margins.
  
  
• A/B Testing: Brands can conduct A/B testing on pricing, discounts, or promotions to determine which strategies drive the most conversions. Example: A new dairy alternative brand could utilize POS data to assess price sensitivity within its category, assisting in the decision of whether to offer discounts or maintain premium pricing.

5. Measuring Marketing and Promotion Effectiveness

Marketing campaigns and in-store promotions are key drivers of consumer awareness and sales. Analyzing daily POS and inventory data at both the item and store levels offers a clear perspective for evaluating the effectiveness of these initiatives.

• Tracking Campaigns, Trade Promotions, and Discounts: By monitoring daily sales during promotional periods, companies can identify which campaigns generate the highest sales. This allows them to make timely, data-driven decisions on whether to continue, adjust, or halt promotions, re-evaluate the product, or pause efforts to regroup.
  
  
• Optimizing Return on Investment (ROI): Detailed insights from POS data enable companies to refine promotional strategies to maximize their ROI. Example: If a health drink company runs a “buy one, get one free” promotion, POS data can help assess whether this campaign increased sales and how it affected the average basket size.

6. Driving Product Innovation and Expansion

Innovation is the lifeblood of emerging CPG companies and brands. Timely, reliable POS data provides a solid foundation for identifying unmet consumer needs and testing new products or ideas.

• Gap Analysis: By identifying products that sell well but face limited competition, companies can uncover opportunities for product innovation.
  
  
• Trial and Adoption: Daily POS data enables companies to accurately track the performance of new products, assessing their market acceptance and refining strategies for broader adoption. These insights also inform strategic decisions for scaling other new product launches and optimizing future marketing expenditures. Example: A snack brand observing strong sales of single-serve packages could develop additional on-the-go options to cater to busy consumers.

7. Enhancing Retailer Relationships

Developing strong partnerships with retailers and buyers is crucial for a company’s growth. Retailers are more likely to invest in products that show strong performance and consistent demand.

• Building Trust: Sharing POS and inventory management data and insights with retailers and presenting compelling, data-driven success stories can help foster collaborative planning and strengthen these relationships.
  
  
• Securing Better Placement: Demonstrating high sell-through rates supported by accurate POS data can justify requests for improved shelf placement, larger orders, or expanded distribution. Example: A startup that consistently proves sales growth with its POS data might secure endcap displays or promotional support from its retail partners.

8. Competitive Analysis

Emerging CPG brands often operate in highly competitive markets. By integrating POS data with syndicated data, companies can gain insights into how their products compare to others in the same category.

• Benchmarking: Comparing key performance metrics against competitors allows brands to understand their market position and identify opportunities for improvement.
  
  
• Category Trends: Analyzing the overall performance of a category helps emerging brands determine if sales trends are unique to their products or part of a wider market shift.
  
  
• Market Gap Identification: Through thorough analysis of retail data, brands can identify underserved areas in the market and unmet customer needs. This insight can inform innovation and help differentiate their products.

9. Demonstrating Growth to Investors

For emerging CPG companies seeking funding, POS data is a valuable tool for showcasing growth and market potential.

• Performance Metrics / Attracting Investments: Comprehensive and accurate POS data provides tangible results, such as sales velocity, market share, and consumer adoption. Clear evidence of product success and demand is essential for attracting funding or partnerships.
  
  
• Data-Driven Investor Pitches: Strong proof of success and demand can serve as a convincing argument for investors. Emerging brands can leverage POS and inventory data to highlight their growth potential and profitability, offering a comprehensive overview of their market position. Example: A brand that demonstrates month-over-month sales growth supported by POS data can increase investor confidence in its scalability.

7 CHALLENGES OF LEVERAGING POS AND INVENTORY DATA

While retail POS and inventory data provide significant value, smaller and emerging consumer brands often encounter major challenges in collecting, accessing, and analyzing this data. These difficulties may arise from the fragmented nature of retail ecosystems, technological barriers, and the necessity for actionable insights.

Here are several fundamental challenges:

1. Fragmented Retail Data Sources

• Multi-Retailer Complexity: Emerging brands often sell their products through a combination of independent retailers, big-box stores, and e-commerce platforms. Each of these channels may use its own POS systems, data portals, and reporting standards, which complicates data aggregation, cleansing, and harmonization.
  
  
• Lack of Data Standardization: The formatting of POS and inventory data can vary significantly across different retailers. This inconsistency requires time-consuming and costly manual processing or the use of specialized tools to cleanse, harmonize, and consolidate the data effectively.

2. Limited Access to Data

• Retailer Gatekeeping: Some retailers are reluctant to share detailed POS or inventory data with brands due to concerns about competition or limitations in technology.
  
  
• Partial Visibility: Brands may only receive aggregated or delayed data—such as weekly or monthly updates—which limits their ability to respond in real time to inventory issues, sales opportunities, and emerging trends.

3. Technology and Infrastructure Gaps

• High Cost of Integration: Developing homegrown systems to extract, clean, harmonize, normalize, and analyze data from various retailers, POS platforms, and data portals can be prohibitively expensive for smaller brands.
  
  
• Lack of Advanced Analytics: Emerging brands often do not have access to reliable reporting capabilities and advanced tools like predictive analytics or AI-powered insights. This limitation hinders their ability to forecast trends and sales or to optimize inventory management.

4. Data Quality Issues

• Inaccurate Sales and Inventory Records: Discrepancies between reported sales and actual inventory levels can result in poor business decisions, as well as overstocking or out-of-stocks that can significantly impact sales and revenue.
  
  
• Delayed Updates: Updates to POS and inventory data may be delayed, hindering brands from making timely decisions about trade promotions, pricing adjustments, and product allocation.

5. Operational Constraints

• Skill Shortages: Smaller brands often do not have the in-house expertise required for data collection, analytics, or supply chain optimization. This lack of expertise makes it challenging to effectively interpret and take action based on retail data.
  
  
• Scalability Challenges: As brands grow, their data-related challenges can increase significantly. Managing a larger number of retail relationships, SKUs, and data sources can overwhelm existing systems and staff.

6. Turning Data into Insights

• Actionability Gap: Even when brands have access to data, they often struggle to extract timely and actionable insights, especially when dealing with large volumes of information. For instance, identifying underperforming SKUs or optimizing regional inventory levels requires advanced analytics capabilities.
  
  
• Time-to-Insight: The time it takes to process raw data into usable formats can delay decision-making, resulting in missed opportunities and potential revenue loss.

7. Data Privacy and Compliance

• Regulatory Compliance: Managing consumer and transaction data necessitates adherence to data privacy laws, such as GDPR and CCPA. Emerging brands may lack the resources to guarantee full compliance.
  
  
• Cybersecurity Risks: The collection and storage of large volumes of POS and inventory data heighten the risk of data breaches.

Best Practices for Using POS and Inventory Data

To maximize the benefits of daily POS and inventory data at the SKU-store level, emerging CPG companies and brands should adopt the following best practices:

• Invest in Automated Data Collection and Analytics Tools: Utilize a cloud-based retail data platform like VELOCITY^® that can seamlessly aggregate and standardize POS and inventory data from any retailer or data source. This platform should also have the capability to integrate syndicated and third-party data to provide a single source of truth for actionable insights and strategic decision-making.
  
  
• Focus on Key Metrics: Prioritize important metrics like sales velocity, sell-through rates, on-shelf availability rates, weeks of supply, and promotion effectiveness.
  
  
• Improve Collaboration with Retailers: Share reliable, data-driven insights and sales narratives with retail partners to align strategies and build stronger relationships. This cooperation can help brands gain shelf space, expand distribution, and increase market share.
  
  
• Iterate and Optimize: Use precise daily POS and inventory data as a feedback loop to continuously refine your product offerings, pricing, and sales and marketing strategies.

CONCLUSION

Reliable retail POS and inventory data and insights are game changers for small and emerging CPG companies and brands. These insights provide the actionable information necessary to effectively navigate competitive markets, optimize sales and operations, and consistently meet consumer expectations and demands. By properly utilizing this data, brands can make informed, confident decisions that drive profitable growth, foster innovation, and ensure ongoing success while maintaining agility.

The significance of daily SKU- and store-level POS and inventory data as a strategic asset cannot be overstated. Whether identifying market trends, refining inventory management, or assessing the effectiveness of marketing campaigns, the insights derived from this data are invaluable. For brands aiming to scale and thrive, investing in a solution like VELOCITY^®, along with processes and strategies to leverage this data, is not just advantageous—it is essential. This approach enables companies to be proactive rather than reactive, allowing them to adapt quickly to sales opportunities, supply chain challenges, and changing market conditions.

Retail Velocity can solve the challenges of data collection, integration, and analysis, helping you work smarter, not harder. Contact us today to learn how to use high-quality data to gain a competitive advantage in the market.