Distribution Metrics: Velocity Change and Organic Growth
In our last post, we began this series on the new metrics that are delivering major results for those in the CPG industry who are leveraging them. Just like last time, the metrics we’ll be discussing can be found in the syndicated data you already have.
In this post, we’ll conclude our discussion of distribution-based metrics. The two measures described in our last post, Equivalized SKU and Sales Productivity, have built a solid distribution-based analytics foundation. The first metric gives you an accurate measure of your distribution, the average number of items of a particular brand in every store. The second metric takes your sales and divides by the Equivalized SKU, letting you take distribution into account when weighing up the relative strength of any brand.
The two metrics we’ll be talking about today are Velocity Change, a simple measure that’s remarkably good at predicting sales trends, and Organic Growth, which augments that velocity change score by taking price elasticity into account.