Encouraging but flawed

Posted by CometCKO (A) on May 1, 2015 at 13:08:02

In Reply to: These numbers look (and sound) good to me!!! posted by Dman on May 1, 2015 at 05:40:37:

The Nielsen numbers are a credible representation of trend, but absolute volume projection will be a function of how they estimate the channels not covered. There will always be a major difference between shipments & sales, as inventory & returns will have to be subtracted from shipments and they are usually not well known after things pass through the warehouses and distributors to get to actual retail outlets.

Nielsen will be a reliable trend yardstick as they will adjust for their coverage factors over time. Yet as noted, they will not cover the entire market. In consumer packaged goods, we always calculated coverage factors for Nielsen numbers by type of outlet. Their coverage of mass stores like Wal-Mart or Sams Club stores or of channels like Pharmacies, Convenience Stores and Grocery Stores were all different and affect forecast accuracy.

True sales estimates would require a knowledge of channel coverage factors as well as overall share by channel. It get's really dicey when considering direct-to-consumer sales and internet sales. Vinyl is not an easy market to measure or forecast.

Mikey is probably right that there is a huge understatement, but I'll bet Nielsen's not so far off either. Identifying and estimating all the above factors is probably too expensive relative to the value that Nielsen customers place on the sales reports. So likely, they are doing the best they can for the money and applying some science to sampling same stores and tracking the same categories of products over time.

Just commerce. An executive making an investment decision based on size & growth would rather be conservative anyway, so it's all good.

"Knowing what you don't know is, in a sense, omniscience"

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Follow Ups Full Thread

Topic - These numbers look (and sound) good to me!!! - Dman 05:40:37 05/01/15 (2)

Encouraging but flawed - CometCKO 13:08:02 05/01/15 (1)

RE: Encouraging but flawed - Dman 08:00:22 05/04/15 (0)

Follow Ups

Encouraging but flawed - CometCKO 13:08:02 05/01/15 (1)

RE: Encouraging but flawed - Dman 08:00:22 05/04/15 (0)

Encouraging but flawed

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