Measures for Distribution (Width)

Distribution, the metric commonly used for tracking product availability, has several variations — purchase, sales, and handler distribution; in-stock and out-of-stock (OOS) distribution; forward stock and total stock. It is calculated as a numeric ratio and as a weighted ratio, and the weights may be in volume or value.

The following are key measures, encompassing various terms and variations, that are pertinent to distribution:

• Handler: A store is considered a product handler during a time period if it stocked the product at any time during that time period. Thus, if the store has recorded any opening or closing stock, purchase, or sale of the product, it qualifies as a handler for that particular time period.
• Numeric Distribution: Percentage of stores handling product.
• Weighted Distribution: Percentage of stores handling product weighted in value or volume, by product category sales. This is equal to the trade share of category sales by handlers. (Unless otherwise specified, distribution is weighted in terms of category value sales).
• Numeric Sales Distribution: Percentage of stores selling product.
• Weighted Sales Distribution: Percentage of stores selling product weighted by product category sales. This is equal to trade share of category sales by the outlets selling the product.
  Note: Since information on stocks is not captured in scan data, for scan channels, the numeric and weighted distribution is computed in terms of numeric sales distribution and weighted sales distribution.
• Numeric Purchase Distribution: Percentage of stores purchasing product.
• Weighted Purchase Distribution: Percentage of stores purchasing product weighted by product category purchases.
• All commodity value (ACV) weighted distribution: Whereas weighting of stores on category sales is the norm, for certain categories, it is advisable to assign weights based on ACV (i.e., the sales value of all categories) or based on a collection of related categories. This practice is particularly beneficial for small, new, or growing categories that have a limited number of brands. For such categories, ACV weighted distribution is a better indicator of the quality of distribution.

Numeric Distribution tells us the proportion of stores distributing a product. Weighted distribution, on the other hand, reveals the product’s presence as percentage of category sales by handlers. It is a better reflection of the quality of distribution.

Usually, the weighted distribution of a product is greater than its numeric distribution. This is because bigger stores typically carry more brands; they tend to be the stores that brands would enter into first.