Analyzing the performance of a product can be achieved from several angles. One of the most important aspects remains distribution nonetheless. Measuring this involves calculating two major indicators: digital distribution and value distribution.
How to work out digital and value distribution?
Digital distribution (DD) gives you the rate of presence of a product in available points of sale. As such, it corresponds to the number of stores in which the product is found on the shelves. In its equivalent percentage DD is connected to the total number of points of sale offering goods in the specific category. DD lets you know the “quantity” of products made available in stores: https://www.retailshake.com/2021/05/distribution-numerique-le-kpi-de-la-grande-distribution/
Value distribution (VD) also corresponds to the percentage of points of sale in which the product can be found, except that the weight of stores in the calculation is adjusted according to their importance, revenue and sales volume. Major retail distributors will therefore have greater weight in the percentage than grocery stores for example. VD is therefore used to find out the “quality” of a product’s provision.
These two indicators are useful for analyzing commercial performance.
Using KPI’s, such as digital distribution or value distribution, is only really useful if they are combined. Together, they help us to know the product’s coverage in a distribution network and therefore to know whether a product is offered to consumers to a sufficient degree to generate a satisfactory level of sales.
When DD is higher than VD, this means that the product is available in a large number of points of sale, but principally in stores which are small or of minor importance. If the opposite is true, the product is only accessible in a small number of points of sale, but these represent a relatively large proportion of overall sales. Generally speaking, a company will strive for the latter scenario. While a good ratio between DD and VD is important to know the quality of the product referencing, it is also useful for planning the marketing strategy. For example, the company may waste money if it opts to launch its communication campaign at a time when the product is not yet sufficiently available to consumers. Furthermore, knowing a product’s DD and VD is vital in order to take corrective measures regarding its distribution.
Retail Shake, your competitive intelligence monitoring tool
One of the issues facing companies when it comes to calculating digital distribution and value distribution is the lack of up-to-date and relevant information about points of sale. With Retail Shake, you can access data in real time from thousands of stores throughout France. In this way, you can track the deployment and availability of your products or those of your competitors without worrying about the information received being unreliable. Thanks to the interactive map, you can select the retailer of your choice and browse the different points of sale, to know which ones sell a given product and how much stock is available, and all in just a few minutes. You can also use filters to choose the retailers of interest to you, according to the criteria you have defined.
