Innovative Analytics: Outstanding Marketing

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A major FMCG company had one of its main products involuntarily delisted by a large supermarket chain. The supermarket’s belief was that the volumes lost on this product would be made up by consumers switching to other products in their store. We found something quite different which gave our client the ammunition to push for a relist.

Clever Modelling

Due to the nature of the product, and the availability of substitutes, everyone expected to find most of the volume recouped on other products within the same supermarket. No one expected that consumers would switch stores. Using econometric modelling in a clever way, we were able to determine precisely where the lost volumes were going.

A Surprising Result

Quite contrary to expectations, consumers appeared to be switching stores to buy the delisted product, rather than buying an alternative product within the same store. However, rather than ‘switching’, the true explanation lay in consumers shopping from a repertoire of supermarkets, carrying out in the course of a week a ‘big’ shop and several ‘top-up’ shops. Thus when their preferred product was not available in one shop, consumers were buying it from another shop. With the models we built, we were able to measure how much volume was being lost to other supermarkets.

The client was still losing some sales to other products, but rather less than they originally thought and, critically, less than the supermarket in question was losing to other chains. This gave the client the evidence they needed to go back to this customer and argue for their product to be reinstated. We created a win-win case for both parties, backed up with hard numbers and rigorous proof.