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PERSPECTIVES


There’s more to learn about CPG analytics

Professor Carlo Vercellis, Polytechnic University of Milan discusses the findings from his recent survey on the use of analytics by CPG companies in Europe.

You teach students about optimization, business intelligence and data mining. But, what do your students teach you?
I am inspired by my students and their continuous inquisitiveness. It feeds my desire for increasing my own knowledge. I really love this part of my job.

Define what “analytics” is to you.
Organizations apply analytics to describe, predict and improve business performance. For CPG companies, this can include many areas such as enterprise decision management, store assortment and stock-keeping unit optimization; marketing optimization and marketing mix; web, price and promotion modeling; predictive science; credit risk analysis…. Let’s stop there. I could go on and on.

You recently helped Accenture with a CPG analytics survey. What did you learn?
We saw widespread belief that analytics is very valuable to businesses that want to create a competitive advantage. A large majority of our respondents in Europe said that analytics and business intelligence are top priorities in their organizations. And more than a half said there is a strong or significant commitment to adopt advanced analytics and business intelligence approaches, often in combination with big data frameworks.

Did you spot any emerging trends?
Yes – we found that CPG companies are primarily applying analytics to operations and production. Financial management and budgeting was the second most common area of application, and, surprisingly, sales and marketing ranked third.

Are CPG companies using analytics when it comes to social media?
CPG brands are attracting and winning over consumers through social ads, online coupons and blogger outreach. Our survey showed that some are leveraging social media for fan pages and brand communities as much as they are using broadcast channels and interactive social media. CPG companies can gain useful insights by combining social media analytics with point-of-sale data for a more comprehensive view of target shoppers.

How are CPG companies using analytics for decision making?
Analytics is critical for informed decision making. According to our survey, many are using analytics for operations and production decisions. Financial management and budgeting was the second highest area of adoption. This picture is in line with the typical organizational structure of a CPG company, with manufacturing and supply chain management on one side to achieve high efficiency, and sales and marketing on the other side to increase revenues and market share. In between, the financial department stays on top of corporate performance management.

Do you foresee a change in how analytics is used in CPG industry in the future?
I expect that within two years, social media analytics will play a critical role for CPG companies, particularly in the area of sales and marketing. This way, CPG companies can have deeper knowledge of the preferences and the opinions of consumers, and develop new products and services in response.

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