5 Key Metrics to Track Through Retail Research

The Indian retail market is predominantly offline as online retail just accounts for around 5% of overall retail business. Hence, offline retail research becomes extremely essential in order to formulate winning strategies. Retail research is important for start-ups to identify potential of a segment while for established firms, it is important to have awareness about the as-is scenario in order to maintain or improve their standing among competition.

Channelplay is a market research firm which touches retailer channel across many retail segments and suggests the following 5 essential metrics to track:

  1. Category Penetration: Category penetration is the availability of the category/segment in relevant retail stores. Low penetration does not necessarily mean that the category is unexplored and hence have potential, it might also be due to non-preference by target consumer or presence of alternate categories fulfilling the need of the consumer.  
  1. Competition Intensity: Competition intensity is the number of competitors present in the retail environment. The magnitude of category penetration (Penetration) and competition intensity (Intensity) can present various strategic directions for a product as follows:
    • High penetration, Low intensity: Increase availability
    • High penetration, High intensity: Introduce augmented product with advanced features
    • Low penetration, Low intensity: Increase availability & retailer push
    • Low penetration, High intensity: Increase availability
  1. Share of shelf: Share of shelf is the space occupied by various brands present in a category. It is calculated by considering a brand’s width i.e. no. of variants present & depth i.e. no. of SKU’s present in each variant. Brands which either have strong consumer demand or good relationship with retailer enjoys reasonable width & depth.
  1. Offtakes: Offtakes are sales – can either be category sales or brand sales. Offtakes are also measured with respect to share of brands present, share of variants, price segments, pack types and sizes.
  1. Trade terms & Retail schemes: Trade terms & retail schemes is the most important driver in predominantly unorganized markets. Trade terms include minimum order quantity (MOQ), booking to delivery cycle, margins, credit terms (cash/credit), credit period etc. Retail schemes are quantity discounts, offers, freebies and are very common in segments with high competition intensity.

The above key metrics must be tracked regularly in order to introduce relevant strategies timely. In case you are looking to conduct Retail Research, then Channelplay is a market research agency which carries relevant experience across various types of retail segments. Please feel free to leave a message in the form at the end of this page or visit our website.

Topics: Market Research

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