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Sources of Consumption Data
The best source of consumption data is the channel closest to
the consumer. Although the retailer has the cash register
data, they may
have difficulties organizing, analyzing and checking the veracity
of the aggregated store level data. Mass retailers like
Walmart and Target are exceptions. They have sophisticated
retail based systems that provide the data to their supplier
partners through the Walmart Retail Link and the Target Partners
Online system respectively.
The solution is syndicated data. Commercially available syndicated
data are the following sources:
1. AC Nielsen's
2. IRI
3. NPD etc.
Since Wal-mart and Wholesale Clubs do not provide cash register
data to the Syndicated data sources, the data available from these
sources are ex-Wal-Mart and Clubs. To compare it to the total channel
shipments, you have to get Wal-Mart and Clubs POS data directly
from the retailers and add it to the Syndicated universe.
Setting up a data warehouse to extract, clean, aggregate and load
the POS data from different sources has become very important for
manufacturers in the recent years given the vital importance of this
data both in market planning as well as in supply chain forecasting.
We have seen some classic database systems and data models used by
some companies. However, this is a very challenging endeavor
and needs expertise and knowledge of both the data as well as
systems to develop this database.
Coverage Factors
The Syndicated data covers most of the shipping universe however
sales from small mom-and-pop stores and beach side stores are
not tracked largely due to the difficulty in tracking down the
cash register data from these outlets. The data providers usually
estimate a factor for these using shipments versus consumption
over a number of years. Hence this is really a derived estimate
and a certain sense of business judgment is required to to use
this factor.
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