Competitive Intelligence

The Data Isn’t Wrong: Why are my comps up but my market share down?

One of the questions that our account directors and executives hear most frequently from their clients is “Can you explain why my shares are down on TraQline even though my in-store sales have increased?” As someone who picked her college major because it didn’t require any math classes, this seemed like a fair question to me! I went to David Garcia, one of our National Account Directors, and asked him to break down the disparity that sometimes occurs between a store’s comps and TraQline share. As it is a question he has fielded before, he was able to quickly highlight the differences for me:

What do we mean by Market Share?

Market share is a brand or retailer’s percentage of products and/or services sold in the marketplace over a given time-period. Because TraQline surveys a representative portion of the US population, we can give a confident overview of the entire market. This means that both large national chains and smaller hometown stores are represented in the data – all adding up to 100% of the market. Regardless of the base size of the market – 1 million units in Q1 or 1.5 million units in Q2, market share always adds to 100% in each quarter.

What about store comps?

Retail stores keep careful records of category sales from one period to the next. Based on that record keeping, a retailer may see that in Q1 they sold 100,000 units of a product, and in Q2, they sold 120,000 units. This retailer saw a twenty percent increase in sales from Q1 to Q2 (and a commensurate increase in revenue for that category).

Comps are just the tip of the iceberg

A store’s comps are a little bit like an iceberg, where only a fraction of the whole is visible. Because retailers cannot see their competitors’ in-store sales, it can be difficult to get a sense of what the entire market looks like. Just using the numbers in our earlier examples, we can see that our imaginary retailer had ten percent of the entire market in Q1 (with selling 100k units out of the 1MM that made up the entire market). However, in Q2, the market grew more quickly than sales at the retailer did. The retailer would see a slight loss in market share, dropping to eight percent of the market (120k units out of 1.5MM total) .

Without a tool like TraQline to get a holistic look at the market, it would be easy for our retailer to feel extremely confident and not realize that while they’ve done well, their competitors are outselling them. However, that first look at the data can be a shock. The immediate impulse is to feel that the data is incorrect. And, just as David explained it to me (albeit, in a very simplified manner), the TraQline team is able to demonstrate how the math works out. Both observations are true, and both are important for understanding your place in the market and why comps are up but shares are down.

Have any other questions about understanding the data TraQline provides? Do you want easily digestible explanations on analyzing data? Let us know how we can keep you updated. If you are not already subscribing to TraQline, our world-class team is ready to chat with you and help you access the most trusted source for consumer durables data.