Improving Product Sales Predictions Is Brain Science

  • MSI

It’s no surprise that new product launches often fail to meet their targets. The trick for managers is to improve their predictions for such products. They must balance the costs and benefits of many different data sources and analytic techniques in order to improve forecasting. To enhance the accuracy of predicting the market-level sales of new products, researchers Marton Varga, Anita Tusche, Paulo Albuquerque, Nadine Gier, Bernd Weber, and Hilke Plassmann, analyzed the added value of different data types. Their conclusions are illuminating.

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NYCU: Are Advertisers Wasting Money on TV?

A new study argues that many advertisers are running their campaigns too long, undermining ROI. On Tuesday, Sept. 21, a panel at the ARF's AUDIENCExSCIENCE conference will debate a controversial new study entitled, "An Economic Analysis of TV Advertising Profitability." The study, by SCHOLARS from the University of Chicago and Northwestern, who analyzed four years of advertising and sales data for CPG brands. They found that, in the current environment, marketers may be running campaigns for too long, undermining their campaign ROI. Their analysis shows negative ROIs for over 80% of brands, implying over-investment in advertising by most CPG firms. The presentation of the study will be followed by an expert panel discussion. In addition, attendees will be invited to participate in follow-up ARF research on changing advertising economics. AUDIENCExSCIENCE 2021 will take place September 20-22. To learn more and register, visit the ARF website.  

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What a Product’s Weight Conveys to Consumers

  • Marketing Science Institute

A product’s shape, packaging or logo contributes to consumer understanding and reactions to that product, previous research has found. But what impression does the perceived weight of a product convey and how can this be used for advertising and marketing purposes? Researchers Priya Raghubir, Lu Yang and Dengfeng Yan looked into this and discovered that consumers use a stability heuristic for weight judgements. Shorter, broader objects are judged to be heavier and thus are considered more stable. And when it comes to food items, weight also plays on such things as calorie assessment.

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NYCU: Three Data Partnerships to Jumpstart in 2021

LiveRamp discusses the benefits of forming data partnerships.  The early advantages for companies that have done well during the pandemic and recession are quickly eroding. To compete moving forward, retailers must be empathetic to the full gamut of consumers they serve. Increasingly, this involves developing a data strategy centered on partnerships, both internal and external, that help you better understand where consumers are and how best to connect with them. Why data partnerships are vital in retail: data partnerships were once the purview of large corporations with the resources to build their own infrastructure for managing these relationships, each of which comes with unique technical, security, and privacy requirements. In my experience, companies enter into data partnerships for a variety of reasons from expanding their understanding of their customers to creating comarketing programs to building media businesses. Retailers looking to partner with CPG brands to deliver relevant, personalized content to consumers is a common example of the latter. What is interesting about the pandemic is that data partnership conversations have become the norm as people see the value and ability to start small in building a stronger, fuller, more complete understanding of consumers. While it’s not possible — or strategic — to enter into a data partnership with every third-party that your brand works with, perhaps you can start by connecting with your internal ecommerce team to gain deeper insight into how your customers are interacting with you and buying your products. This could lead you to shift your content strategy or run custom promotions with your suppliers to capture wallet share while meeting your consumer needs. Three ways to get started with data partnerships: Here are three ways to think about data partnerships that can build or increase your market advantage in 2021: Collect: Does anyone at your company have a single, complete view of the customer? Even at some of the largest retailers, not every team has access to the data they need. Think about the many ways first-party data is collected at your company and inquire as to how your team can gain access to this data to drive relevancy and increase media efficiency A quick win here would be the ability to access more data than you had before — browse data in addition to transactions, for example. The most valuable data you have is collected directly from your customers, so the more you use it, the more you’re able to better serve their needs. Discover three ways to get started with data partnerships by reading this article. Source: LiveRamp. Three Data Partnerships to Jumpstart in 2021.  

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NYCU: No Decline in Brand Loyalty

Early results from a new ARF project suggest that, contrary to some reports, brand loyalty has not dropped during the last decade, at least not for the larger CPG brands.  During last week’s SHOPPERxSCIENCE 2020 event, the ARF invited a number of experts to report on their research and insights on trends in consumer behavior, including recent changes as a result of the pandemic. We recommend reviewing the presentations and summaries on the ARF website.    At the event, one report discussed long-term trends in brand loyalty. The ARF’s Chief Research Officer, Paul Donato, presented initial findings from a new research project, the ARF’s Brand Loyalty study. This first report focused on IRI market share data for major brands in three CPG categories: salty snacks (short sales cycles), pasta sauces (mid sales cycles), and deodorants (long sales cycles) for the 2010-2019 period. The analyses showed no evidence of declines in loyalty among the larger brands in these categories. For example, while the top thirty brand share dropped slightly for salty snacks and pasta sauces, the average number of unique brands purchased and consecutive purchases were steady. The chart shows little change in the number of consecutive purchases of the same pasta sauce brands. The analyses are on-going, more data will be shared in Q3 2020. Source: The ARF. (2020, July 27). Consumer Behavior and Brand Loyalty: ShopperXScience, the ARF.

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Shopping and Mobility Trends

Change in page views by content category for select online publishers.  Tracked by the Parse.ly network, comparing Feb. 23–March 7, 2020, to March 8–21, 2020.   Source: Fischer, S. (2020, April 7). Demand for online shopping has never been higher. Axios Media Trends: Axios.

Editor’s Note: Just one of Google’s, “Community Mobility,” trends appears here. They release a number of these spanning locations (e.g. parks, workplace) across a number of counties in New York State. Reports are available across the globe. These reports show how visits and length of stay at different places change compared to a baseline. They calculate these changes using the same kind of aggregated and anonymized data used to show popular times for places in Google Maps. Google says these reports will be available for a limited time, so long as public health officials find them useful in their work to stop the spread of COVID-19.     Source:  Google. (2020, March 29). COVID-19 Community Mobility Report. Google.
Streaming minutes per week by service – February 24 to March 16, 2020. Streaming video has shot up dramatically in the U.S. over the past month, as more people turn to their screens for comfort during the nationwide coronavirus, per Nielsen.   Source: Fischer, S. (2020, April 7). Bonus: Streaming spikes. Axios Media Trends: Axios.
With fewer retail options, what does the future look like for magazines' past? For most publishers, the newsstand business has become ancillary. But prior to The Great Recession, America’s top 500 magazines delivered nearly 350 million copies to newsstands across the country. Times have changed, to say the least. That number now is a small fraction of what it once was, and for many magazine publishers, the newsstand accounts for less than 10% of overall revenue. The drop in newsstand sales has been precipitous and consistent, double-digit year-over-year declines have been par for the course for more than a decade.  But now, as COVID-19 continues to disrupt every corner of the economy, questions about the viability of the newsstand are glaring. Initially, CEO of Bauer Media Group, Steven Kotok, suggests there was a slight uptick in sales as shoppers prepared to hunker down. Likewise, Meredith Magazines president, Doug Olson, acknowledged the same trend. But both implied they don’t anticipate that being a long-term trend. “We aren’t sure,” Kotok candidly admits. “We wouldn’t be surprised if we saw some decline due to foot traffic.” Scott Hill, who oversees retail sales and marketing at PubWorX, a joint collaboration between Hearst and Condé Nast, is very clear in his expectations for a softening of the newsstand business. “The disruptions in air travel impacts the business significantly,” he says. “There are a lot of shops that are closed. Flights are down 80% at this point. So, we’re trying to reduce print orders accordingly.” In terms of the impact on orders overall, Hill cites Barnes & Noble as just one critical example. “They have had over 400 stores close,” he says. “ For Bauer, on the other hand, most of its transactional sales happen at essential businesses like grocery stores and pharmacies, which will almost certainly remain open throughout this crisis. Source: Welton, C. (2020, April 7). As Magazines Seek New Footing During the COVID-19 Crisis, the Newsstand Tries to Hang On. FOLIO:  

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CPG Opportunities in Unexpected Markets

A current McKinsey Insights and Publications article discusses the expected growth in the global CPG sector, which is expected to nearly double in size from $8 trillion in 2014 to $14 trillion by 2025.  Some surprising opportunities were revealed by McKinsey’s Cityscope Navigator tool, which analyzed the markets of more than 2,600 of the world’s largest cities.   See all 5 Cups articles. For more on this topic, check out the Marketing Tab in Morning Coffee.