TABS Analytics Blog

The Importance of eCommerce Data Harmonization


Retail eCommerce growth has not slowed post-pandemic. Sales grew in 2022 and are projected to continue. 

The food and beverage category presents the most opportunity as it has the highest projected growth rates through 2026 for several sub-categories. Health, personal care, and beauty has the second highest projection. It’s great to see growth and opportunity for these consumer-packaged goods (CPG) categories within the eCommerce channel.

There are five key retailers that captured 67% of U.S. digital grocery sales: Walmart, Amazon, Kroger, Albertsons, and Target. It's important to have your product assortment, pricing, and shopper strategies right at all five of these top retailers and keep in mind there's another 33% of sales spread among other retailers. To win, it is important to optimize performance across the entire market.

And when we say the entire market, we mean both in-store and online. Nielsen’s 2023 outlook reported 86% of consumers are shopping both in store and online.

To optimize and win in both channels with your consumers, you need Data Harmonization.

What is data harmonization?

Data harmonization is the ongoing process of taking data generated from various formats, name conventions, and verticals and converting it into one master dataset that your team can work with. It’s a continuous task that keeps your past, present, and future data easy to understand so that you can regularly extract analysis from it. 

Data harmonization converts data from various sources into a cohesive format. This includes:

  • Validating your data points across channels to make sure metric comparisons are accurate and stay accurate
  • Ensuring the process is scalable to handle the inevitable increased data
  • Creating new attributes that help with analysis

So, how exactly does data harmonization help CPG companies? The goal of data harmonization is to make business data “analytics ready.” This delivers several key payoffs:

1. More Accurate Reporting

Different data collection sources often have different values for the same metrics. Failing to harmonize this data can lead to errors and poor decision-making based on bad information, eventually costing the company significant amounts of money.

2. All Data Points in a Central Area

Harmonizing your data is the only way to evaluate your business holistically. It allows you to understand the total brand performance of eCommerce and brick-and-mortar. 

With all data points in a central area, you can cut down on confusion and improve efficiency. If you need to quickly pull information about a sales promotion, you could have a single master database rather than going to several departments. Plus, this avoids the problem of teams using different sets of data to try and address the same problems.

3. Lower Expenses

In many ways, data harmonization is good for your bottom line. Those who don’t harness the power of data harmonization suffer from:

  • Added costs acquired from purchasing and cleaning outside data on top of what you are getting from your own records
  • Lower benefit from external data because this secondary data isn’t aligned with your in-house data

The result? Data that provides less ROI for you.

4. Savings Through Efficiency

With data harmonization, your team no longer needs to scramble through different databases to find a specific source. With a centralized database, they can spend their time finding insights to guide business decisions, reducing inefficiencies and gaining more profit in the long term.

5. Centralizing Data Governance

Data harmonization is all about the long game. From rebrands to consolidations, a lack of historical data can throw you into disarray. Data harmonization makes adapting to and tracking these major changes easy.

Why is data harmonization important for eCommerce-focused CPGs?

The COVID-19 pandemic, changing consumer expectations, and alterations to old data frameworks have forced every CPG manufacturer to reevaluate its online strategy and sales. Consider the following changes to the eCommerce landscape:

Most CPGs that have both a brick-and-mortar and online presence are approaching the changes with an omnichannel strategy, which puts an even greater premium on data than before. Here are some key areas where data harmonization plays an important role:

  • With the ever-growing importance of eCommerce in CPG strategy planning, manufacturers need harmonized eCommerce data to make holistic brand plans. 
  • Syndicated brick-and-mortar datasets need to be paired with eCommerce datasets to better understand the shifts occurring between the two channels.
  • Varied datasets across online and brick-and-mortar stores make data harmonization an absolute necessity to fully understand your all-outlet sales trends.

How do you implement eCommerce data harmonization?

At this point, it’s clear that all CPG manufacturers should harmonize their databases. But how do they go about doing it?

It’s not a process that’s implemented overnight. It takes the right data software to perform the data harmonization process. 

The right data software is going to do a lot of the heavy lifting when it comes to the harmonization process, from gathering data in the original datasets to bringing it all together in one central location. 

It’s important that the software that you look into has the capability to handle the process of data harmonization:

  • Acquiring your data from multiple sources
  • Ingesting the data into a combined, cleansed, centralized source
  • Harmonizing and customizing the data based on your business and product hierarchy so that multiple data sources will have a consistent description and performance viewable in one place
  • Enriching with custom market metrics, such as productivity, that indexes an item’s velocity performance to the segment or category
  • Analyzing the data to gain actionable insights by channel, brand, or any customized subsegments

With a data harmonization process in place, you can analyze and visualize your data to make informed decisions.

Watch our webinar on Data Harmonization and eCommerce.

In this webinar, we’ll explore strategies for implementing data harmonization, including best practices for data collection, analysis, and integration.

Key takeaways include:

  • Why CPGs need Data Harmonization
  • How you can integrate eComm data
  • Use insights to develop and test new shopper strategies