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Episode Seven: Man And Machine
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Nielsen is looking to fill the e-commerce data void with the first syndicated sales measurement service to get at least some of its information directly from retailers.
More than a dozen "retail cooperators" have agreed to provide data, including Target, Peapod and supermarket chain Giant Eagle. Those are the only three retailers Nielsen is authorized to name, said Karen Fichuk, Nielsen's president-North America. Industry heavyweight Amazon is not providing data, and she declined to comment on whether Walmart is. At least one club-store chain is participating.
Nielsen will be tracking more than 200 retailers with receipts drawn from panel partners she declined to identify. And it will get additional data direct from hundreds of thousands of consumers on its HomeScan and Harris panels.
"The combination of this retailer data with consumer-sourced receipts provides an incredible data set from which to calibrate and project a total e-commerce channel," Ms. Fichuk said. Nielsen will draw on its data science acumen to merge data from these sources, then work with a handful of clients to validate the estimates during the first half of the year, with plans for a full release during the second half. Data will be reported monthly.
Several large providers already estimate e-commerce sales using panels, such as Slice Intelligence, which draws on more than 3 million consumers who provide access to their e-mail receipts, and 1010data, which uses online clickstream data from more than 10 million people. InfoScout, with more than 300,000 people scanning or otherwise providing receipts from their offline and online purchases, can also do flash polls and track detailed cross-channel shopping histories from participants.
Even with other alternatives out there, the No. 1 question Nielsen has been getting from consumer packaged goods clients is, "When are you going to be able to measure the e-commerce channel?" Ms. Fichuk said.
She doesn't believe large receipt panels alone can tell the full story. "The ability to tie together several sources including actual truth of sales from retailers and the right data science that knows how to identify and correct bias" is "where ultimate value is unlocked and where differentiations begins," she said.
E-commerce is still well under 10% of sales for most CPG players in the U.S., but growing fast. An analysis by 1010data showed CPG e-commerce sales soared 42% last year, and IRI, another Nielsen rival, estimates it will account for half of industry growth in the years ahead. Speaking at the Consumer Analyst Group of New York conference last week, L'Oreal Chairman-CEO Jean-Paul Agon said his company's e-commerce sales rose 38% last year to $1.4 billion, or 5% of total sales.
Michael Stich, chief innovation officer of WPP's Rockfish, welcomes Nielsen entering e-commerce measurement. "It's a big issue," he said, and marketers are trying hard to work through a complex array of data sources.
While monthly reports will be useful for tracking sales, he said, marketers looking to use e-commerce data to optimize digital ad campaigns would prefer at least weekly reports.
Ultimately, getting more data directly from more retailers – particularly Amazon -- would make the data better. But CPG companies can get category sales data today from Amazon through its partner program, provided they hit targets for ad spending, Mr. Stich said, and some other retailers and manufacturers have been doing private data-swapping deals – the retailers trading category data for brands' multi-retailer data.
"We certainly expect more retailers to join as they too can benefit from the total channel measurement insights that we can provide," Nielsen's Ms. Fichuk said, "and they would receive that as participants."