4 Product Matching FACTS HURTING BRANDS
Brands are trying to catch their breath after explosive sales in 2020 from both e-commerce and omni-channel retailers.
While industry analysts predict that 2021 and beyond will continue these trends, the rapid growth in demand and the shifts in how consumers made purchases revealed some manufacturers are ahead of the curve.
Specifically, there is great differentiation in companies’ abilities to match products for monitoring price, promotion, assortment and availability across retailers.
Thinking about the breadth, depth and similarity of many products, product matching is hard. Add to this the complexity of tracking a competitive product set and the time-consuming manual processes used by many companies today, the reality is that more data is being left off the table than informing strategy.
This may be the way that CPG companies have always approached things.
In today’s world, however, where pricing can change within minutes, rankings can drop with out-of-stocks or a consumer can compare similar products with a simple click, incomplete or poor quality data as a result of flawed product matching means missed insights and missed opportunities.
4 of the biggest missed opportunities we see are:
1. You are making decisions with only a partial picture
The most obvious problem with incomplete or inaccurate product matching is that brands don’t have the information to inform their pricing, promotion and assortment decision making.
Let’s assume that your product matching is only 60%-70% accurate. What challenges are you blind to?
How comfortable are you going to your leadership to provide an update on your omni-channel story?
This has been how many pet companies have operated, but now, more accurate, timely and comprehensive product matching is possible and expected.
2. Your competitors may have more visibility than you
Just because your company is struggling with product matching doesn’t mean that your competitors are having the same problem.
If this is true, their ability to understand how their products are performing in the market and respond both tactically to improve search ranking, avoid out of stocks and run successful promotions improves every day and prepare strategically for the future improves everyday.
Shoppers are looking for convenience, product information and pricing to influence their buying decisions according to the Common Thread Collectives report, “Pet Industry Trends, Growth & Statistics in 2021 and Beyond: Unleashing Your Ecommerce Pet Marketing Strategies.”
The inability to have a complete and accurate picture of your products and your competitors makes impacting these drivers a too little too late effort.
3. You have incorrect or incomplete data to negotiate with retailers
According to the McKinsey post, ‘Power partnerships’: Manufacturer–retailer collaborations that work, “the CPG manufacturers that are clearly winning relative to their category are those that have deepened and broadened their collaboration with retail partners, forming “power partnerships” that yield meaningful growth in both revenue and profit.”
Despite the value of collaborative relationships, today these are still built on proving mutually beneficial outcomes.
This means having the data to back up concerns and ideas. You can’t question pricing compliance without accurate data. You can’t talk about competitive positioning without accurate data. You can’t do any of it without accurate product matching.
Investing in these capabilities is in an investment in better partnerships with your retailers.
4. You are wasting time trying to fix a tactical problem rather than building a winning strategy
Trying to get a more complete picture of your e-commerce landscape by increasing the manual resources dedicated to it, may show marginal improvement in capacity, but limited impact on quality.
The choice is doing more of what you are doing today, or automating this capability with a solution like Bungee Tech’s Brandscape, so you can spend time using the insights gained to improve your strategy and competitive positioning.
The reality is that manufacturers and retailers, will continue to innovate and adapt to the changing needs of consumers. This is driven by the projection that “Online CPG food and beverage sales could top $100 billion in 2021,” according to a Supermarket News article.
How this pie gets divided will depend on the steps manufacturers take today to improve their understanding and act on this intelligence to benefit their consumers, partner with retail customers and grow their businesses.