Baseline Sales Calculations – TABS AccuBase®
TABS AccuBase is a model that dramatically improves the accuracy of sales estimates (baseline sales being defined as sales in the absence of any promotional activity).
It is generally recognized by analytics professionals in CPG that the current industry models for baseline sales are deeply flawed. They exhibit the three following undesirable characteristics:
- “Phantom” spikes during promotional weeks, which are intuitively and theoretically impossible.
- High week-to-week volatility and variability, where we should instead expect to see a relatively stable estimate of baseline sales.
- Baseline sales are often at levels well below actual sales for extended periods, but there is no promotion or pricing activity that explains this gap.
TABS AccuBase addresses all of these problems, and even corrects other shortcomings in industry baseline technology. TABS AccuBase requires only unit sales and average price in order to provide vast improvements in forecasting accuracy. Specifically, TABS AccuBase provides the following benefits:
- Higher Accuracy: No ‘phantom’ spikes, less weekly volatility, and persistent understatement of baseline.
- Captures Structural Changes in Baseline Sales such as seasonality, distribution changes, and consumption shocks.
- Extends to all POS sources: It is not just reliant on the IRI/Nielsen/SPINS tracking universe, but provides a baseline model for specialty outlets, or any other data source, with scanner data.
- Reliable for shipment data: TABS AccuBase has been validated for factory shipments of high velocity items. Additionally, TABS is making great progress in validating AccuBase for shipment data of all products.
- Extendable to all countries: Most countries do not have baseline data available through their suppliers. TABS AccuBase can be a valuable overlay to your data package in these markets.
- Not reliant on expensive causal metrics: Because we need only units and price, we can deliver estimates without an expensive data gathering infrastructure.
- Creates base price and base units: This model fixes accuracy issues in both everyday price as well as base units.
- Underwent rigorous academic reviews: TABS AccuBase has been published in academy journals, including JCC and JORM and was a core component of Dr. Kurt Jetta’s groundbreaking doctoral thesis: