Investing in Market Reports for FMCG and its Alternatives

The FMCG sector is one of the most competitive and dynamic globally, driven by the constant evolution of consumer preferences, the emergence of new competitors and technological advancements. In this context, companies need accurate and up-to-date information to make strategic decisions. Market reports have become a key tool for achieving this. They allow businesses to better understand market trends, analyze their competitors and adapt their marketing and sales strategies.

Traditionally, market reports have been provided by large consulting firms like Kantar, Nielsen or GfK. These companies collect and analyze large volumes of data about consumer behavior, market trends and brand performance. However, with the creation of increasingly accessible and affordable digital data analysis tools, new alternatives have emerged that promise to offer a more detailed and real-time view of the market.

This post will explore the different data sets available for market analysis in FMCG and the characteristics of each one. On the other hand, it will compare traditional market reports with emerging digital tools, highlighting their advantages and disadvantages. Finally, it will analyze how integrating different data sources can improve efficiency and accuracy in decision-making.

Essential Datasets to Understand the Market

There are 3 fundamental data sources within the FMCG environment. Each one has its own particularities and different applications:

Sales data

Provides information about the volume and value of products sold at different points of sale. This data is essential for understanding market demand, brand performance and consumer preferences. Within sales data, there are also 3 different types of datasets:

• EPoS data (Electronic Point of Sale) provided by intermediary entities such as IRI or Nielsen, which collect, organize and distribute large volumes of data, extracted from cooperative retailers who provide them.
• Direct data provided by retailers through their own platforms, such as Walmart’s Retail Link portal or Amazon Retail Analytics (ARA) data. 
• Hybrid data, a mix between information obtained from EPoS and  direct data from retailers. 

Consumer data

Obtained through surveys, consumer panels or tracking online behavior. It provides information about consumer preferences, habits and attitudes, allowing companies to better segment their target market and adapt their strategies.

Consumer panel data, such as that provided by Nielsen, IRI or Kantar Worldpanel, is also useful for understanding buyer demographics. Some specific types of panel methodologies in eCommerce include tracking electronic receipts, such as that offered by Rakuten Intelligence and Edison Trends. And also browser monitoring, offered by providers such as Hitwise and Similarweb.

Digital Shelf data

Helps brands and manufacturers to monitor and manage their presence on digital shelves, ensuring compliance with their specifications and the integrity of their content, pricing policies and promotions across all retailers with online as their source. 

Apart from these fundamental data sets, there are other important ones that we should also mention. These are trend data, which reveal everything from changes in consumer preferences to the adoption of new technologies; and open source data, from public sources such as government statistics, industry studies and other freely available reports.

Important Characteristics for Assessing the Quality of a Dataset

When selecting a dataset for market analysis in FMCG, it is important to consider various characteristics that can affect its usefulness and accuracy. Some of the most relevant are:

• Geographic coverage: It is essential that the data reflects the market in the geographic areas relevant to the company, as consumer preferences can vary significantly between regions or countries.
• Update cadence: In a market as dynamic as FMCG, having up-to-date data is key to being able to react in time to changes in competition or consumer behavior.
• Accuracy and reliability: Data quality is crucial. Poorly structured or incomplete data sets can lead to wrong decisions. It is important that data sources are reliable and verify the quality of the information they collect.
• Data depth: Data must be detailed enough to provide useful insights. For example, it is not enough to know the total sales of a product; it is also necessary to understand who buys it, why they prefer it and how they behave towards competitors.
• Compatibility with other data sources: The ability to integrate data from different sources is essential to obtain a complete view of the market. Data that cannot be combined with other sources limits analytical capacity and decision-making.

Traditional Market Reports (Kantar, Nielsen, GfK…)

Traditional market reports, provided by large consulting firms such as Kantar, Nielsen or GfK, have been for decades one of the main sources of information for FMCG companies.

Advantages

• Experience and strength: These companies have been in the market for years and have extensive experience in collecting and analyzing data. They offer in-depth and structured analysis, with methodologies proven and recognized globally.
• Access to historical data: Having worked in the sector for many years, they can provide an extensive historical data, which allows for long-term trend analysis.
• Comparability: Since these firms work with standardized methodologies, it is easy to compare data regionally or globally, which facilitates decision-making in companies with operations in multiple markets.

Disadvantages

• High cost: One of the main disadvantages of traditional market reports is their high cost. For small and medium-sized companies, this type of report can be inaccessible due to its price.
• Response time: Traditional reports are almost always updated quarterly or annually, which limits the ability of companies to react quickly to changes in the market.
• Aggregated data: Often, these reports provide aggregated data that may not be detailed enough for certain niche strategies. For example, granular information on specific consumer segments or new emerging brands may be missing.

Digital Market Analysis Tools

With digitalisation, new market analysis tools have emerged that allow more agile, detailed and personalized access to data. These tools, often based on Big Data or Artificial Intelligence technology, are transforming the way companies access and use information.

Advantages

• Real-time access: Unlike traditional reports, many digital tools allow access to data in real-time or with very little delay, which facilitates agile and reactive decision-making.
• Customization: These tools allow companies to customize reports according to their specific needs, selecting the most relevant data for their business and leaving out information that is not useful to them.
• Reduced cost: In general, they tend to be much more affordable than traditional market reports, which democratizes access to valuable data, especially for small and medium-sized businesses.
• Detailed data: Through the analysis of large volumes of data, these tools provide insights that are much more detailed, allowing companies to access information on niche markets, individual buying behaviours and emerging trends.

Disadvantages

• Learning curve: While they offer great flexibility, they often require a certain level of technical expertise to be able to fully utilize them. Companies will need to provide detailed onboarding to new users so they can fully exploit its advantages.
• Reliability: Not all digital tools guarantee the same data quality. It is crucial to evaluate the reliability of the sources and the update frequency of the data to avoid basing decisions on inaccurate information.

How to Integrate Disparate Datasets to Improve Efficiency?

Integrating different data sets is key to maximizing efficiency in decision-making. By combining data from traditional market reports with digital tools, companies can get a more comprehensive and detailed view of the market. However, this integration is not simple and requires a structured approach:

• Establishing a common framework: In order to make data from different sources comparable, it is important to translate it into the same language and establish a common framework that unifies criteria such as product categories, consumer segments and key metrics.
• Using integrated analytics platforms: There are tools, such as flipflow and our Retail Data Platform, that allow you to not only have real-time market data but also integrate data from multiple sources and perform cross-analysis. All of this, taking into account the internal logic and terminology of your company and each of your teams, without investing so much time to draw conclusions.
• Team training: The success of data integration depends largely on the team’s ability to handle and analyze the information. Investing in employee training in the use of advanced analytical tools is essential to get the most out of this integration.

Conclusion

Investing in market reports in the FMCG sector continues to be a necessity for companies seeking to stay competitive. Traditional reports, while solid and reliable, tend to be costly and don’t offer the flexibility companies need today. Digital tools provide more detailed and real-time data. This makes it easier for small and medium-sized companies to access the information they need to optimize their business.

The key to a successful market analysis strategy lies in knowing how to integrate the many sources of data that exist in an efficient and agile way. Having an integrated analytics tool, such as flipflow, will make your company’s day-to-day operations easier. Only by using it will companies be able to obtain a complete view of the market and make informed decisions that allow them to stay ahead of the competition, maximise results and meet the changing demands of consumers.