INSIGHT on INSIGHT: Getting beyond POS data (that’s Point Of Sale)
POS data is both a blessing and a curse. This is scanner data retailers capture at the cash register or through online checkout recording the numerous data points related to the moment a particular product is purchased.
Access to raw POS data like Walmart’s Retail Link can provide priceless understanding of a company’s business at a very granular level. Metrics like sales, profitability, in-stocks and inventory turns can be viewed at the item and store level and almost any recent time frame.
Highly accurate sales performance can be looked at a hundred different ways.
However, it can also become a crutch as companies standardize reports that fail to include more creative or insightful analyses.
They can miss out on even bigger opportunities as analysts operate on intellectual assembly lines, churning out more and more reports while having less and less curiosity or instinct to know when and where to dig deeper into the data.
POS data creates a false sense of having a complete picture of the business. It has caused many companies to ignore asking the more important questions:
Why does the POS indicate shoppers are behaving in a certain way?
What if we need to react to a competitor in the future?
What if we could control a future change that was favorable to our business?
Answering these forward-looking questions through primary shopper insight work complements the backward-looking understanding provided by the POS.
DON'T STOP ASKING DEEPER QUESTIONS
The next time you are reviewing weekly, monthly or quarterly POS reports, ask yourself some of the following questions and consider the value of knowing the answers:
Are we running data to discover new opportunities or just to deliver mandatory weekly reports?
What analytical approaches are we overlooking that might change how we view the business?
When was the last time a POS report revealed a significant insight?
Do we really know why sales are behaving a certain way or are we operating on assumptions and speculation?
What aspect of our POS would have the greatest impact on our overall business if we could find a way to better control or influence it?
What is the POS not telling us?
on't stop using POS for all it is worth, but realize that POS only provides part of the picture. Make sure you are aware of the parts POS doesn't show.