When a company is spending tens of millions of Rands on promotional campaigns, having near real-time data on how their promotional strategies are playing out can see off costly missteps or clear the way for huge wins. It is no surprise that data-driven decision-making is taking centre stage in the worlds of manufacturing and retail.
Silo’s market-leading Price Probe platform, our Share of Voice product and bespoke insight solutions are assisting many leading businesses to make smart decisions in a cut-throat competitive environment.
So, we sat with our Silo Head of Analytics, Matthew Meagher, and Customer Insight Analyst, Celine Govender, to learn more about their observations on companies that put data at the centre of their thinking.
Q: The world of commerce has had a front-row seat to digital transformation and disruption. What have you noticed about the growth in how decision-makers value data in that context?
CELINE: Companies are all about maximising profits while minimizing overheads, and that’s where data comes into play. By using broadsheet and online promotional data to create category insights, data can aid businesses in deducing exactly how their assets are performing in a competitive environment and, in turn, they can enhance or shift their promotional and sales strategies to make the most out of their current offerings.
MATTHEW: First and foremost, there has been major growth in the consumption of Silo data.
This has not only been requested by our customers, but also by third-party data providers and analytics businesses. We are central to the market’s data ecosystem. What we are finding is that although our data has value in itself, when we compliment third-party datasets, we are adding extra value.
For example, our promotional pricing information can provide insights into the promotional space by looking at elements like share of category, inflationary trends and so forth.
However, as the purpose of promotions is to incentivise a purchase through a price reduction, by joining our data to broader datasets which include transactional metrics, our customers can gain further insight as to what promotional mechanics are driving sales, media strategies, price elasticity studies and so forth.
Q: What’s pushing businesses into using data more fully within their businesses?
MATTHEW: Better data promotes improved reporting with better insights. BI platforms have also become far more prevalent in our industry. Insights are facilitated into a business far more efficiently and effectively. One of the more important factors is that our customers are wanting to prove whether the spend on promotions is driving sales and how to improve this spend strategically to drive more sales.
CELINE: The minimal cost of receiving a data-driven report in comparison to creating a new advertising campaign that may not be optimal, is one of the strongest driving factors.
Q: What are the kinds of decisions you have seen most supported by data?
MATTHEW: Different customers have very different needs when it comes to data. Some might use these insights to get better deals while others will use price as one of the key strategies in their marketing mix. Promotional pricing is therefore equally as important.
In general, analysing pricing trends in certain categories provides key insights into what to price products at. As mentioned before, tracking promotional ROI has become mainstream in many businesses. Ad-spend is in the tens of millions of rands in some businesses and tracking the efficacy of this investment is now a major priority.
CELINE: Advertising strategies, promotional mechanisms – what’s working and what’s not – as well as sales directions (toward a specific channel or region perhaps, or target market).
Q: Businesses are always facing new challenges as problems seem to surface one after the other. How does data improve decision-making for customers?
CELINE: Data helps provide a history of what has happened, what has worked and what didn’t as well as help predict trends for the future.
MATTHEW: When it comes to promo-grids, brand owners often follow what was done in the previous financial year without doing much research or analysis. We like to call it a copy-paste approach.
Silo data definitely adds strong value in this realm and allows our customers to be far more strategic in their approach.
Depending on their needs our customers can apply this data cleverly, from understanding their competitive context on how to approach a category, for example, both in terms of price and share. This allows for strategic pricing plays. It’s not just about what price to promote but what to promote.
Q: Your customers exist in a competitive environment already. How can they utilise data to avoid becoming redundant?
MATTHEW: Often data is used to drive the price to the bottom instead of assessing the maximum price a product can be marketed to drive growth. Analysing data to promote profit is key. Margins can be thrown away unnecessarily. Some categories are far less price-sensitive than others. From a promotional point of view understanding how certain categories and/or brands fair in the promotional space is fundamental to market positioning and growth.
CELINE: As I mentioned earlier, data is used to analyse and predict trends. Silo’s broadsheet data is an excellent example, as we use category insight (more than 150 categories) to predict these trends and keep businesses aware of the latest promotional developments as and when they occur.
Q: The client comes first, so what are the options for decision-makers hoping to use data to boost consumer engagement?
CELINE: Always research! Do proper research into your desired or targeted consumer. Look at historical data and find the gaps. The quality of your offering is always more important than the quantity, so keep that in mind and create sound strategy based on these.