One of the newest forms of retail scanner information, census data enable manufacturers and retailers to market to consumers more accurately on a store-by-store basis.
TRACKING EVERY ITEM
Rather than a more traditional sample that uses a few stores in a chain to project sales on a national level, census data track every item sold in every store within a connected chain. Information Resources Inc., for example, claims its census data cover 80% of all grocery stores in the U.S.
"One of the benefits of census data is that it captures the entire retail marketing area, said Donald Stuart, partner at Cannondale Associates. "Then, manufacturers are able to identify the stores that are most important to [their] category, least important to their category and those that hold the best opportunities for brand or category development."
"The data are necessary for consumer planning and category management," added Karen Snepp, VP-customer and consumer insights for Frito-Lay Co.
But the information comes at a cost-about 30% more than sample data. "If the retailer that you are dealing with is really into category management, the data are definitely worth the expense," said George Solomon, sales manager at Thomas J. Lipton Co.
"Years ago, many manufacturers copied each other to make an item because it sells, but that's not really true category management," said Mr. Solomon. "Just copying something no longer will produce long-term growth."
Because stores may no longer have the shelf space to carry five or six packaged dinner mixes, for example, using census data to perform category management can eliminate five similar flavors of chicken and add a flavor like chicken-broccoli to expand the category, he noted.
Census data also are crucial in implementing micromarketing, enabling marketers to cluster or categorize stores within a certain chain by a category such as soft drinks. It allows marketers to form consumer clusters for each individual store and help determine which categories do better in which stores.
"Five years ago, we were clustering stores and now, we cluster categories," said Mr. Solomon. "One store may have five different clusters of shoppers per store in a category, and our goal is never to be out of stock in a store."
Because of its value, providing the census information has become a horserace for the industry's two biggest data providers.
IRI started collecting census data about three years ago, creating a database of roughly 23,000 supermarkets, mass merchandisers and drugstores.
"Census data give manufacturers a definitive read on their business in any given account," said Joe Battoe, president-sales and retail services for IRI.
EXAMINING STORE DIFFERENCES
For suntan lotion being sold in resort towns, for example, national sample information previously didn't reflect sales accurately.
"For certain categories or even specific items, the sample data were not reflective and it was not uncommon to have error rates of plus-or-minus 18%, which we found totally unacceptable," said Mr. Battoe.
In March, A.C. Nielsen-U.S. announced expanded census service offerings, which include demographic examination of store differences.
Census data doesn't, however, make sample data obsolete. Sample data are useful in tracking national consumer trends and obtaining national market share.