Is your data dead on arrival (DOA)? From a macro perspective, consumer price index (CPI) data gathered by the United States and other organizations and countries is normally very latent. The data is often collected months prior to its release to the public. Meaning that even though you are seeing information about CPI, it may not reflect what is currently happening in the market. For any organization operating internationally, having information about economic stability is critical.
While official CPI data can be helpful, it doesn’t always paint a full picture of the granular, ground-level changes that are occurring within the markets your business is operating. CPI represents macro-level changes in the economy, but sometimes micro-level data is needed to understand any early movement.
The next wave of exponential growth for manufactures is within developing markets. Deloitte predicts global retail sales of packaged foods will rise to over $3 trillion by 2020, mostly due to emerging markets and the rise of the middle class. As international retail markets continue to grow due to increased income, awareness, accessibility and lifestyle changes, it is imperative that organizations entering or operating in these markets develop tailored strategies. One of the ways that can be done is by monitoring changes in the prices of goods in near-real time.
For many brands, the complicated retail ecosystem means that they don’t always have an accurate data source for the entire lifecycle of their products. There are often gaps in the data that they are able to collect or receive. With a lack of reliable data, pricing can often become an afterthought.
According to MIT Sloan Management Review, “Even within their own stores, retailers tend to know little about consumer behavior before the consumer checks out. Vendors act as category captains in many instances, advising grocers on shelf space placement and inventory tracking.”
In emerging markets, collecting the appropriate data can be especially difficult, due to the popularity of smaller stores and less penetration by large multinational retailers. India is the perfect example of an emerging economy where the majority of products are not sold through traditional retailers. According to the Economic Times India, “nearly 90% of all consumer goods are sold through small kirana stores in India, the channel is highly fragmented.” With fragmentation in the supply chain, acquiring ground-level data can be more difficult for manufacturers.
We have found that often, once a product leaves its manufacturer the quality and availability of data begins to decline. This is even more prevalent in emerging markets. One customer in Brazil came to Premise for help because they had very little information about their products in-stores after they had been distributed.
From the macro to the micro level, having timely and accurate data about economic changes in emerging markets can be extremely valuable. While it can be hard to collect independently, with the ability to use a network of real people on-the-ground it is easier to collect the needed information.