Retailer Measurement Services

With the exception of the jewelry and watch category, over the past 25 years, marketing information businesses called retail measurement services have developed serving nearly every substantial consumer products category. In each of these businesses, product purchase transactions are captured by point-of-sale system scanners, which have become commonplace at supermarkets, discount and specialty stores, pharmacies, and department stores. With each scan of a bar-coded product, information about that purchase transaction is collected, and aggregated with millions of similar transactions. Huge databases of these transactions are developed, providing the “raw material” that has spawned the development of many large companies that synthesize this data to provide valuable information services that are purchased by manufacturers, retailers and marketers of consumer branded items. These services help management to gauge product penetration, overall product performance, distribution and promotion effectiveness, and price sensitivity.

The logic is simple. Branded consumer products exhibit high gross profits – often around 50% because consumers pay a premium for the quality and reassurance they receive from buying a well-known, respected product versus a generic, no-name equivalent. Brand marketers spend a disproportionately high percentage of their revenues on advertising and other marketing costs, as well as on new product development to create real and perceived benefits to ensure consumers continue to assign this extra “value” to their brands. Each brand and retailer’s success relies on making sure that it efficiently utilizes marketing resources and capital so the image and awareness it creates with consumers translates into retail sales. If products aren’t performing up to standard, a brand or retailer must quickly evaluate why and take actions to bring performance back on track. Retail measurement services provide the critical information brands and retailers rely on to assess performance and define required actions.