The nation’s leading data collection, processing and reporting firm is advancing its methods and systems in leaps and bounds, which will have a positive impact on the vending industry. Two years ago, Custom Data Solutions Inc. (CDSI) began producing weekly reports that show sales of all consumer packaged goods by segment, state and region, among other details, for its CPG supplier customers. In full effect, this new reporting system provided relative sales data for 2021, compared with 2020 and 2019.
As a result, CPG companies working with CDSI were able to modify their sales approaches precisely to what was happening in the vending channel, according to CDSI president and chief executive Michael Nudi.
“Reporting helped management fully understand what was happening in the channel,” he said. “Our team worked diligently to create reports and made adjustments based on feedback.”
Custom Data Solutions’ enhanced reporting, started March 2020 at the onset of the pandemic, is a weekly snapshot of the vending channel’s performance. The outbound reports use consolidated data across all CPG clients showing percentage changes from one period to the next. Due to confidentiality concerns, reports only show consolidated percentage changes. Much of the data reported to Custom Data Solutions is delivered daily.
This year, CDSI is developing a new web-based reporting system. It will be the company’s fifth-generation web application, built on the newest reporting tools and technologies available.
“CDSI was the first to embrace that ‘new-fangled’ thing called the ‘internet’ as we developed and released our first-generation web-based reporting solution in 1999,” Nudi recalled. “Thinking back to that time, people were still using modems and plugging in their landline telephones to connect to the internet. It was slow, but it was well-ahead of the information curve where CDSI has always been.”
Founded as a software company in 1981, CDSI began developing technology to analyze snack food data in 1994. In the early days, reports were generated quarterly, later advancing to a monthly rate. Today, CDSI provides much of the reporting for the vending channel, or convenience services industry. CPG data analytics giant IRI, on the other hand, does not have direct visibility to the vending channel, so it cannot provide CPG suppliers with the same direct operator/retailer purchase reporting that Custom Data Solutions can.
IRI data are like report cards that monitor past actions, according to Nudi, and do not meet the requirements of a trade class like vending that has fluid distribution. “In vending, the decision points are much more varied to the many operator/retailers’ headquarters, the route drivers and even the consumer preferences at the machine’s location level,” he explained. “There is a constant review occurring at several levels requiring near real-time visibility.”
To accomplish this, CDSI has developed a unique identifier, or the “CDSId,” for each operator; no matter where they purchase their products, they are linked to the common identifier. Additionally, a product broker that represents multiple CPG products will see the same CDSId across any CPG to which they have access.
“The definition of vending has really changed over the past 10 years or so,” Nudi said. “It is no longer just the glassfront vending machine.” CDSI’s reporting is now organized under numerous segments. Today’s vending segment comprises traditional vending machines, self-checkout micro markets, fundraising and concessions. Other CDSI segments include theaters, correctional facilities and specialty/alternate markets, as well as some parts of hospitality, campus retail, and travel and leisure. The specialty/alternate segment could include such retail venues as Lowes, Home Depot, Michaels, Bed Bath & Beyond, Auto Zone and Fastenal.
“Sales in each of these segments go hand-in-hand with the segments of business that the vend distributors have evolved into over the years,” Nudi explained. Today, the vending and specialty/alternate segments, combined, represent more than 88% of the convenience services business, Nudi reported.
Interestingly, sales in the correctional segment, a relatively small market, never slowed during the pandemic. In fact, sales there continued to increase throughout the COVID crisis, even surpassing 2019’s levels. “Inmates really love their snacks,” Nudi concluded.
CDSI can also provide incentive program data. These marketing programs allow the operator/retailer to earn points or rebates for their purchases. In 2020, CDSI calculated and disbursed more than $51 million in rebates for its CPG clients. “This does not include the rebates paid by CPGs where we do not do the calculation, although they use our data as the primary source for these payments,” Nudi noted.
“Vending is truly a pioneer business model that evolves quickly to changing trends and moves away from declining trends faster than any other trade class,” Nudi said. “Timely reporting magnifies the growth potential for CPG suppliers, product distributors, brokers and operators. Data is essential to maximizing assets and returns for all concerned.” ■