The importance of offline tests for CPG brands

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In an industry where millions can be won or lost by the slimmest of margins, having accurate data is imperative. The difference between two and three percent can determine whether or not you turn a profit this quarter. You need to be certain that when you test an initiative you do so scientifically and accurately, gaining a true sense for the drivers of your success or loss. MarketDial’s software allows CPG companies to create accurate offline tests in mere minutes – no data scientist required.

Test and learn is vital to your success

In our experience, too few CPG companies accurately run offline tests on their store initiatives. Even seemingly small decisions like the color of a display shelf affect not only your sales but also your perceived value and reputation. Becoming the lead CPG company in your stores helps in both short-term profit and long-term staying power. Where subtleties can mean the difference between becoming a category captain or a bottom-shelf brand, recommending or executing an initiative in your stores without first testing whether that initiative will positively impact revenue can prove a costly mistake.

Benefits of offline tests

Unfortunately, not all analysts are created equal. Without our platform, we often see companies spend months designing tests that, unfortunately, are both inaccurate and unscientific. In low-stakes endeavors, relying on slow and imprecise testing may not prove fatal, but with millions on the line, imprecision is unacceptable.

Using MarketDial’s platform you can accurately test any initiative, giving you the data you need to determine whether your company should invest behind that initiative. By testing all your initiatives on one platform, you can score each initiative and have an apples-to-apples comparison between initiatives. With this standardized approach, your company can ensure that it spends its resources only on the highest-leverage ideas.

Examples of how testing saved millions

A client recently approached us to analyze a test they had conducted before using our platform. In this test, the company reorganized the juice section of a grocery store by use cases (also known as organizing by “jobs”). In its test, the client examined sales data and determined that the new juice layout resulted in a 3 percent lift in revenue. Simultaneously, the grocery store conducted its own test and determined that the new layout created no impact whatsoever.

Our client faced a conundrum: its analysis differed starkly from the grocer’s. Without an objective and repeatable test, it couldn’t convince the grocer to implement its initiative. Luckily, MarketDial’s software allowed one of the company’s analysts to easily run a test for the juice layout, ensuring proper selection of treatment and control stores (something that is too often overlooked). In doing so, MarketDial’s software determined that the true lift generated by the changes resulted in a 6 percent lift in revenue.

Before, using poor testing strategies, our client was at risk of not only abandoning its successful initiative (and losing out on potential revenue) but of losing its credibility with the store and its position as category captain. After implementing the layout across the entire fleet of stores and achieving a 6% lift, the grocer gained over $4 million in revenue ($4,500 in increased sales across over 900 stores). Imagine this! If our client had simply accepted the grocer’s test, all that revenue would have never been captured.

MarketDial’s software is key for empowering teams on all levels to test and learn what works and what doesn’t. Given its intuitive and straightforward process, MarketDial allows anyone from entry-level analysts all the way up to c-suite executives to craft and track multiple tests, giving you a clear insight into what is and isn’t bringing the best returns. Whether you’re testing in Brooklyn or Berkeley you can be sure your tests are up to the highest standards in the industry.

If you are interested in improving the speed, accuracy, and scalability of your testing efforts, check out these resources:
What is test and learn?
Test and learn examples of retail success
A test and learn mindset: discover, adapt, and succeed

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