Nielsen shutters retail intelligence operations in Pakistan

LAHORE: Nielsen has reportedly shuttered its retail measurement service (RMS) business unit in Pakistan. In an internal email, Nielsen Managing Director for Arabian Peninsula and Pakistan Andrey Dvoychenkov wrote that Nielsen had thoroughly evaluated the business and the ability to deliver growth in the long run. 

“In the past years, we have taken action to adapt to the market’s reality transforming our company into a product-driven organisation, and more recently to understand the extent of impacts caused by Covid-19,” wrote Dvoychenkov. “Therefore, it is with a heavy heart that I must inform you that we have taken the decision to close our Retail Intelligence operations in Pakistan.” 

Dvoychenkov added that the company will continue to offer consumer intelligence services to its clients, insisting that Nielsen wants to create an organisation and operating model that puts it in the best position to succeed and directly address clients’ concerns. Speaking to Profit, Nielsen Managing Director for Pakistan Quratul Ibrahim said that the company has only shut retail audit operations from the retail intelligence unit in the country.

According to a pitch deck seen by Profit, the RMS team helped businesses acquire quality data in product movement, market share, distribution, price and other market-sensitive information. The service covered modern trade and traditional trade, which collectively accounted for chain supermarkets, hypermarkets, convenience stores, and independent grocery stores. 

“They are undergoing massive restructuring globally and every market,” said Abdul Sattar Babar, the managing director of Ipsos in Pakistan. “My impression is that in many countries, they’re closing Retail Measurement Service (RMS), and in others, reducing the [scope, categories, and clients]. RMS demand has gone down substantially. Except for [only a few] categories (e.g. hand sanitisers), stocks are stuck.”

In July, the data analytics firm announced that it would prioritize resources to focus on key strategic initiatives, higher-margin products and services, and greater efficiency.  The action plan included exiting several smaller and underperforming markets while permanently reducing the global workforce by 3,500 employees in the second half of 2020. Cash payments for the severance costs will continue into late 2021. 

The broad-based optimisation plan was projected to result in approximately $250 million in pre-tax annual run-rate savings, which would result in 2020 pre-tax restructuring charges of $150 to $170 million. 

“We had closed the services even earlier as the coverage wasn’t good enough for the amount they charged,” said Abbas Arsalan, head of global insights at The Coca-Cola Company. “If [Nielsen] fixed their issues, it was a great service. Also, we should rather focus on predicting the future than looking backwards.”

Arsalan told Profit that marketers have other options for retail measurements, which are admittedly not as good, and have the same issues as Nielsen. He added that the real alternative is a household panel – which measures consumption in a home – and that over the long run it is best to digitise the system.

A recent entry into the market intelligence industry is SurveyAuto.

“The closure of Nielsen’s retail intelligence unit reinforces that the old school brick-and-mortar operations of physically collecting data from retail shops is no longer applicable where large FMCGs have digital data readily available,” said SurveyAuto CEO Dr Umar Saif.

SurveyAuto connects with the sales systems of FMCGs and uses its blockchain smart contracts and AI models to automatically compute market shares and sales performance, while its Uberised marketplace of enumerators can ground truth data from the field in real-time, he added

Operating in the predictive space, a spokesperson from Ogilvy told Profit that the British advertising agency offers shopper marketing services in Pakistan, within which retail measurement is included. In Pakistan, the largest client within the shopper marketing service by Ogilvy is British American Tobacco, which uses the acquired information to drive sales in-store at the point-of-purchase.

“This is a very specialised and costly exercise,” said the Ogilvy spokesperson. “[It is] currently being done by Nielsen and Access Retail but mainly Nielsen. All multinationals use Nielsen retail audit to get this data., so no need for an agency to do it as it’s already available from research agencies like Nielsen.”

A representative of Leopards Courier Service told Profit that the logistics service also has an RMS for its corporate account holders within the warehousing business segment. As stated above, a full-service RMS helps businesses acquire quality data in product movement, market share, distribution, price and other market sensitive information. 

The solution offered by LCS only covers product movement, providing live tracking of items from the warehouse to an order management system wherein orders are booked and delivered on behalf of customers.