How are the Sales per Point measures (dollars and volume) calculated and what do they indicate? How do they differ from a s "Rate of Sale" measure that calculates using a standard physical distribution percentage?
In the CMA dashboards, the measure “Dollar Sales per Point” is calculated by dividing a product’s total dollar sales by its Category Weighted Distribution (CWD) percentage. Find a full explanation of CWD here. Volume Sales per Point is the same concept, and divides total volume by CWD. For the purpose of this article, we'll focus on Dollars Sales per Point. ,
Dollar Sales per Point represents velocity. But, the velocity isn't being measured by merely dividing total dollar sales by the percentage of physical locations where a Brand Family, Brand, or SKU sold. Rather, Dollar Sales per Point divides a Brand Family, Brand, or SKU's total dollar sales by its CWD percentage (which represents its level of availability/exposure to beer category customers in the selected geography).CWD shows us an item's availability to the dollars in the market, not just the percentage of store locations it scanned in.
So, if a 6pk of IPA generated $15,000 in a single geography over a period of 13 weeks and has a CWD of 40% in that 13 week period, the 6pk's Dollar Sales per Point is calculated as $15,000 / 40 = $375.
Dollar Sales per Point asks, "considering the level of availability (CWD) that your brand family, brand, or SKU has to the dollars in this geography, how rapidly is it selling? How is it performing?" In a particular market or retailer, if our 6pk is demonstrating higher velocity (Dollar Sales per Point) than competitive 6pk which has higher distribution, we can present this to a buyer in that market. If they increase our 6pk's distribution to the level of a competitor which has higher CWD but lower velocity, the 6pk will conceivably make them more money than the competitor 6pk. This may lead our buyer to give our 6pk greater distribution, greater availability in locations with high beer category traffic, and/or give it more visible shelf placements.