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What Is Nielsen Market Data and How to Use

Nielsen Logo

Nielsen is a global market research and data analytics company which generates revenue from its 2 major business units, ‘Watch’ and ‘Buy’.

The ‘Watch’ side of the Nielsen business tracks the number of people exposed to certain content and what actions they take thereafter. This is known as Reach, Resonance and Reaction and delivers an understanding of who is viewing content, what it means to them and whether, or not, it leads to purchasing. This measurement is important for advertisers to understand where and when to advertise and to what audience.

The ‘Buy’ side of the business continuously tracks:

  • EPOS sales, through the major shopping channels. This is delivered via Scantrack.
  • Shopping behaviour, via a representative Panel of Households who record all of their Grocery purchases. The Nielsen product is Homescan.

Below are 20 elements to help you better understand it.

SCANTRACK

The Market Dimension

  1. Understand what is being measured. The Universe is all of the channels which Nielsen are representing in their numbers. So, typically, this would be a figure of 80-90% depending on the Category but it is important for the subscriber to understand the source of the sales that are included in the reported Nielsen numbers.

Typically, and depending on the category, the following channels are included:

  • Grocery Multiples – Tesco, Sainsbury’s, Asda, Waitrose, Morrisons, The Coop, M&S, Boots*, Superdrug*, Wilkinson’s, Booths etc.
  • Impulse – Independents, Symbols, Forecourts, Off Licence’s etc.
  • Chemists – Boots*, Superdrug*, Lloyds Pharmacy, Moss Pharmacy

* The placing of Boots and Superdrug depends on the category. For Healthcare categories which are typically purchased as part of a weekly Grocery shop, such as toothpaste or shampoo, these retailers will be included as Grocery Multiples. For categories such as analgesics and cosmetics, Boots, in particular, would see their competitive set as being the Chemists. Boots do have a major influence in this area and they also apply ‘masking rules’, in some cases and categories, to protect their market share.

Conversely, the following are a few of the excluded channels:

  • Department Stores
  • Motorway Service Stations
  • Hospital shops

So, for example, of the 100% of sales of Cola in Great Britain, Nielsen represent, say, 85% of this and so 15% is not being measured (this is just a fictitious example and is not intended to be an accurate reflection of the Cola coverage).

  1. Census v Sample. For users of Nielsen data, it is important to be aware that most of the data inputs are census based, meaning that data is acquired from every store of that retailer. This, of course, means no projections/estimates are required to represent the retailer as a whole and is deemed 100% accurate in terms of the data coming in. Some inputs are ‘sample based’ meaning that statistical projection is required in order to represent the retailer as a whole. This data is not inaccurate but is a best estimate based on the data available.

 

  1. Subscription to Key Account Data (aka Named Account Data, or NAD, or KAD).The core offering from continuous data providers, such as Nielsen, is an aggregated service which provides sales data, and derived Facts, for the major channels such as Major Multiples, Chemists, and Impulse. This does not automatically break out the data by a retailer, as this is a royalty based system whereby the fee is a separate revenue stream for both agency and retailer. So, account specific data is available, to purchase, for all major retailers, many Impulse retailers and some Chemists. For Grocery suppliers, this is an investment that should be considered as it is standard practice to engage with retailers using the retailer’s own data.

 

  1. Fascia and Store Level data. An enhancement to Key Account data is the availability of fascia data e.g Tesco Express, Tesco Extra and, furthermore, Store Level Data. This is key for products which act differently, by store type.

 

The Product Dimension

  1. Ensuring the Hierarchical database accurately reflects the client category. The continuous data information received from Nielsen is, generally, either from a bespoke database, built to the client’s specification, or from a syndicated database which is a Nielsen defined view of the Category. In both sources, it is important that the database accurately reflects the category and is watertight for new products entering the market.

For example,

  • Smoking may, for a long time, have been comfortably split into Cigarettes, Cigars, and Tobacco. Then, of course, the innovation of Vaping undoubtedly meant that subscriber companies in this sector needed to rethink their view of the database. MBM can help with exploring the possibilities of this.
  • Take Salty Snacks, should this include Pretzels? Do Pretzels compete in the same market as a bag of Cheese & Onion crisps?

 

The Fact Dimension

  1. Basic Facts. The essential Facts, supplied by Nielsen, deliver an ongoing read of Value Sales, Volume Sales, Unit Sales and derived growth and share figures. These address the fundamental questions for understanding the performance of any Brand, such as:
  • How big is the market?
  • Which segments are growing/emerging?
  • How are the key manufacturers/brands performing?
  • What are the opportunities?

 

  1. Distribution and Out of Stocks. Distribution is an important first fact to be considered when analyzing sales results as it helps determine sales potential. If the product is not available there are no sales and the other measures (volume, price, promotion) do not matter.

 

  1. Identifying listing opportunities, by a retailer. This is, of course, one of the main uses of continuous data, alongside an understanding of long-term trends. Tactical listing opportunities can be identified through an understanding of the Nielsen metrics available, such as Rates of Sale comparisons between competing products. MBM can support clients in the interpretation of these numbers and in the influencing of listing decisions.

 

  1. Interrogate performance of promotions. The cost of Promotions means that an understanding of their outcomes is essential. Nielsen provides standard Promotion metrics, such as Promotional Distribution and Incremental sales (versus expected sales) and these identify the uplift from a particular type of campaign. The learning enables suppliers and retailers to collaboratively employ mechanics which deliver the greatest return. More advanced analysis can deliver a more in-depth understanding of promotional elasticity, actual mechanics, and store by store performance.

Overall, examining Promotional activity can answer the following typical questions:

    • What portion of my sales is on promotion?
    • What portion of my competitor’s sales is on promotion?
    • Do my sales increase with a sales-driven promotion?
    • Am I over-promoting or under-promoting?
    • What promotions have been the most successful?

 

  1. Pricing. Understanding price points are essential for a sustainable successful brand. Average Price is a standard feature of Nielsen core data but can be further interrogated through multi-regression analyses which can deliver valuable learnings in areas such as Price Elasticity.

Price analysis can deliver answers to some very common questions:

  • How is my price positioning against the competition?
  • Is the pricing relationship of the items in my portfolio structured in the best way?
  • Is the price gap to competition affecting my performance? Should I act?
  • Has the change in price affected my performance?
  • How am I performing within specific price segments?

 

The Time Dimension

  1. Time Periods. The core service supplies 160 individual weeks of data as the raw material which is used to build industry standard aggregates such as MAT (Moving Annual Total), YTD (Year to Date) and Latest 4 Weeks. But, in addition, the client has the ability to create their own bespoke time periods such as ‘Fiscal YTD’ or ‘The Summer Season’, for example.

 

Delivery frequency

  1. Delivery frequency. Subscribers to Nielsen data should be aware that content can be delivered at any frequency that is appropriate for their needs. Typically, clients with a larger budget would receive weekly updates, delivered 10 days after period end, while, for those who operate in categories that, perhaps, move less quickly, or are at an early stage of development the requirement might be 4 weekly, Quarterly or Annual.

 

The Software

  1. Answers are the Brand name for the Nielsen software through which all of the above content is supplied and interrogated. Some clients may only receive reports, without the software, but, for those who do subscribe to Answers, MBM are able to support in the training and optimal usage of its functionality.

 

Reporting

  1. Automated reporting. Typically, Grocery clients would prefer to use their fixed resources on analysing and gaining actionable insight from the data available. Nielsen data is easily extracted and incorporated into self-updating reports and charts, and MBM can provide the support to achieve reductions in time spent on these tasks.

 

HOMESCAN

 

The Market Dimension

  1. Understand what is being measured. Unlike Scantrack, Homescan tracks EVERY purchase, from any store, brought into the home by a Panel of 15,000 Households. So, there are no Coverage gaps.

 

The Product Dimension

  1. For Products, the same diligence, as Scantrack, is required to ensure the database accurately reflects the category. The value of Homescan is in the capturing of every purchase made, that is brought into the home, and it delivers information around the actual purchaser in terms of age, gender, family structure, residential status etc. In terms of ‘watchouts’, subscribers should use caution when using Homescan as this method is less robust when users wish to analyse low distributed products, such as NPD, which may be less likely to appear in a panellist’s shopping basket, or Impulse products, such as single cans of drinks and confectionery, which are less likely to be brought home, having been consumed away from home.

 

The Fact Dimension

  1. Homescan Facts are fundamental to a Product’s performance with the commonest measurements being Penetration (the number of Households buying the product, and/or Category), Repeat rate (the extent to which a Household repeat purchases the product), Frequency of Purchase (how often does the Household buy the product and/or Category), and Weight of Purchase (how much does a Household spend on the product and/or Category).

 

The Time Dimension

  1. Homescan is measured over a longer time frame than Scantrack because it is a sample and requires a greater quantity of data for robust output. Typically, the time periods are 4 weeks, 12 weeks and 52 weeks without the weekly granularity that we see in Scantrack.

 

Panel and Demographics

 

  1. Homescan offers the additional dimension of Demographics to the user which gives an extremely valuable steer on the nature of the Households buying a particular product and/or Category. So, information about the size of household, the age of the panelist, their gender, cat/dog owner, the age of children and stage of life etc. are all very important in understanding the medium and long-term trends for a product and/or Category.

 

  1. In terms of the Panel itself, Nielsen will maintain a stable group of panelists over a long period of time which accurately reflects all the dimensions from point (19). However, users should ensure that the Panel accurately reflects their Category in terms of, say, regionality and type of Category.

 

Read our Ultimate Guide to Category Management to understand how data is best used in todays Catgeory management.

Andy Palmer

About Andy Palmer

Andy started at the coal face with eight years in food retailing. Prior to joining MBM he then spent five years in the supply base in positions of category analysis, category management and account management. He works as part of the team enabling suppliers to UK supermarkets to secure more profitable wins through people development. He specialises in Category Management Training and is a qualified HBDI practitioner.

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