2020 has been a rollercoaster. In the wine and spirits industry, some producers sales reached +5% after fearing a -30% fall in March. This is not to say the year was easy for everybody: champagne volume drop or Heineken workforce cut, show the extent of misfortunes. But there is one thing 2020 gave: Extreme Data. Read here why it matters.
- Let us start with data businesses usually have, such as SALES MIX. Analysing 2020 sales mix by SKU, client, market or channel helps understand how a portfolio reacts to extreme conditions. The immediate learning from this analysis is understanding which client or which brand to focus to mitigate risks. Had 2020 not happened, many businesses sales would have stayed on an "as usual" trajectory, not allowing to understand a situation under extreme changes.
- The next step in terms of analysis is the FINANCIAL MIX, i.e. understanding the 2020 impact on a Portfolio, Brand and/or Product P&L. If your Portfolio is composed of several brands, each P&L will vary according to the respective Gross Profit and Contribution after Advertising and Promotion. 2020 will reveal how well or bad a brand P&L will hold in extreme volume and price situations. As a result, it will also show whether costs or investment reallocations are required. We also encourage to look at the P&L topline as Pricing and Promotions are a HUGE and untapped source of profit amplifications.
- 2020 extreme data is also a good way to understand how your VALUE CHAIN evolved, i.e. how the distributor(s) margin(s), down to retail price, have changed. Have the margins of your distributors suffered? Does this point need to be addressed? Granted, not many distributors or retailers will share their margins, but with a bit of maths and logic, it is possible to make a decent triangulation...
- Last, CONSUMER DATA is perhaps is the most complex information to get and to read. But with this year's acceleration of online sales, consumer profile data bonanza is becoming a reality. As an example, if you sell a whisky online, your online provider should be able to give you the socio-demographic profile of the buyers. And as a result, you can organise campaigns to similar consumer profiles knowing that the purchase likelihood will be higher vs. consumer profiles that did not buy your whisky...
Overall, 2020 has created new sales & mix situations that would not have been visible otherwise. Now is the time to analyse these cases as they provide scenarios to reassess priorities and build plans. This requires having the correct Data capability in an organisation, and what often seemed a Finance or Planning prerogative is becoming a managerial requisite across the board. In the coming articles, we will share the approaches to build this culture and know how, where facts are properly sourced, analysed, interpreted AND shared, for successful business decisions.
Brand Reveal is a network of Marketing Experts with a focus in Wine and Spirits. Like every good marketeers, we understand the importance of information and help organisations become better at using Data in their everyday operations. For more, Contact [email protected] .