Key measure of the health of the business. Amount that would have been sold if there was no merchandising. Drivers of base sales (sometimes called base volume) are distribution, regular price, advertising, consumer promotions, competition, consumer trends. Base sales are derived from weighting and smoothing the sales in non-promoted stores for the weeks before and after each individual week. At the simplest conceptual level, base sales are a weighted average of non-promoted sales.
Nielsen and IRI each have their own methods for calculating base sales which differ somewhat but use a similar approach. Each supplier has a proprietary statistical method and unfortunately they do not share their specific “formulas.” The models used involve some version of exponential smoothing time series, accounting for trend and seasonality.
You can read more about base sales in this post about its inverse, incremental sales:
Hi, Sandy,
I understand the base sales you illustrated here, then I came across a metric called Base EQ Display Only. Could you help me understand what it is? If base sales is sales without any merch, there shouldn’t be such a metric, correct?
Thanks!
Hi Lillian,
Base sales is an estimate of what sales would have been if there had been no merchandising. So Base EQ Display Only is an estimate of what sales would have been in stores with the Display Only condition if there had been no display. It sounds like you are confusing Base Sales with Non-Promoted Sales. To better understand the difference, take a look at this article from our blog:
Presence vs. Impact: Why Non-Promoted Sales ≠ Base Sales
Thank you so much, Sandy! This is very helpful!
Hi Sally,
Can you tell me what methods Nielsen and IRI use for calculating the base sales?
Each supplier uses its own proprietary statistical method for calculating base sales and unfortunately they do not share their specific “formulas.” As mentioned in the definition, you can think of it as a weighted average of non-promoted sales. Base sales in any given week is a derived measure, based on transaction-level data at the weekly, store level. The models used involve some version of exponential smoothing time series, accounting for trend and seasonality. Hope this helps!
For anyone wanting to know more about base sales, here are some other posts we’ve written on the topic of incremental volume (and base volume is mentioned in all of these):
For Aspiring CPG Data Guru’s: Incremental Volume Unveiled
CPG Data 911: What To Do In An Incremental Volume Emergency
Three Facts About Incremental Volume
Thank you Sally and Robin for sharing your knowledge with us. I do have one question regarding the Base sales. Is Base Dollar Sales and Dollar Sales Any Merch are one and the same or both different.
Sorry I meant Base Dollar Sales and Dollar Sales No Merch
Hi there,
Base Dollar Sales and Dollar Sales No Merch are not the same thing. Dollar Sales No Merch will only include stores without merchandising. Base Dollar Sales will include all stores – Nielsen/IRI will be estimating what sales would have been without merchandising, even in stores that DID have merchandising.
Here is a link to a post on this topic:
Presence vs. Impact: Why Non-Promoted Sales Does Not Equal Base Sales