Guideline for Retail Professional to Excel in Retail

Guideline for Retail Professional to Excel in Retail

For decades, CPG companies are implementing retail execution on a daily basis, some manually and some by using technology. As we speak, the transition from manual to automatic continues from west to east and small to big brands. Thanks to all the revolutionary retail technology innovators. However, even with all the innovation and transition, many CPG manufacturers and distributors still explore the perfect execution strategy for their brand.

“Only 28.5% of respondents agree/strongly agree that they have the tools they need to make appropriate decisions.” – POI 2019 State of Industry Report Stat.

More than ever, retail execution is crucial for CPG owners and brands to maintain or retain success at stores. Many industry professionals around the globe are either unaware or passive about “Retail Execution.” These professionals do not realize that all the marketing activities they implement at the stores are part of the execution. Here are some 2019 search engine stats from English speaking countries, to consider:

retail map

Just 41.25 searches per month on retail execution. Now, one thing that we have all learned since the 2000s, The Internet Never Lies! Moreover, along with its partner-in-cahoots, eCommerce, the digital world is drastically affecting brick and mortar.

This reality points out the impending need to continue educating the owners and distributors of CPG brands as well as retailers about retail execution; it’s aspects, technology, importance, and application into the future.

So, What is Retail Execution?

In simple terms, it’s what a CPG company SHOULD do to maximize engagement with its shoppers, encourage the sale of its brands, and elevate shopper experience for continued success. Let’s understand this SHOULD!

Retail execution POPProbe

Understanding the SHOULD – Retail Execution Components

Shopper Experience/Journey Evaluation

page.test

In recent years, eCommerce has started siphoning shoppers from brick & mortar by providing them convenience. An experiential journey to which they cannot say “NO.” Let’s take an example of Amazon – The Giant that’s squashing retail as we know it. Here’s how convenient it is:

A shopper/browser goes to the Amazon website -> browses through various products they have to offer -> checks the discounts -> can also check the reviews of each product -> adds the desired products into the cart -> check out -> gets the products delivered to home in few days.

With this convenience, shoppers can buy products without ever leaving their home. Though this is effective, shoppers desire to have physically engagement with the brands & products before they purchase. And this is where Brick & Mortar or physical retail can WIN!

Many retailers & CPG owners have already started exploring these opportunities. This venture is evident as many retailers and CPG companies continue to digitize their stores and at the same time E-commerce brands have established physical stores to promote shopper experience.

Omnichannel experiences, pop-up shops, and much more are erupting to bridge the gap. We’re entering a phase where Ecommerce and Brick & Mortar will complement each other.

Moral of the Story: Shopper Experience/Journey is ABSOLUTE!

On the road to find your perfect Retail Execution strategy or solution, you should ask yourself this question: “Does this strategy/solution enable us to give the best shopper experience/journey?”

Establish Productive Manufacturer-Retailer Relationship

This relationship has long been a pain to CPG companies and manufacturers. If maintaining a supply chain for on-time delivery is one end of the challenge, the other end remains the poor execution of the defined strategies at the store-level by retailers. This fragile cooperation and inefficiency continue to have a significant negative impact on the industry in general.

Data acquisition of POS data and shopper experience remain vital for manufacturers to make decisions that drive sales. However, according to POI, more than 75.7% of CPG companies face challenges in retrieving this information.

Therefore, it’s pertinent for every CPG company to establish a productive manufacturer-retailer relationship from the get-go. Field Reps are vital to the success of this relationship. They need to be equipped with digital and manual tools, as required, to: access the performance analytics of the store, check the in-store compliance of proposed plans, record KPI measurements, negotiate better deals with retailers, gather POS data, and most importantly analyze the shopper interaction & experience with the range of SKUs present at the store.

So, when you need a perfect retail execution strategy/solution, ask yourself or your team this question:

“Will this retail execution strategy/solution help establish a productive relationship with our retailers?”

Create a Plan of Action

A strategic plan from supply & distribution to in-store execution should be drawn and defined after every review of existing relationships and new ventures. A route to market strategy should be a priority in order to achieve distribution efficiency, increase availability, and improve brand communication.

Some of the factors that any CPG company should consider while creating a plan of action are:

Current performance Segmentation Distributor network assessment Territory Planning Channel classification Sales Incentive Program Key Performance Indicators Technology to use Implementing the plan of action Reviewing for results. When you’re searching for a retail execution solution, ask yourself, “Do we have a robust plan of action?”

Product Distribution

Where you distribute and how you distribute your product plays a key role in the entire retail execution process. Starting from your manufacturing unit to the end-user, your consumer, there are many people involved before your product finally reaches your end user. A typical product distribution cycle involves:

Manufacturers Distributors Wholesalers Retailers Consumers Also, agents are involved wherever additional distribution or out-of-stock replenishment is required. Though this process seems simple and straightforward in writing, in reality, it is the most challenging part of the retail business. A delayed or insufficient delivery results in the loss of potential sale or detraction to a competitor. This reason is a driving factor for extended investments made in distribution.

Likewise, as a product owner, you SHOULD research, and evaluate which stores require intensive distribution, selective distribution, and exclusive distribution of your SKUs. What works at store A may work in Store B.

For example, Jam & Jellies may sell more at store A, whereas chocolate & candy sell more in store B. In this situation, both stores should have the necessary stock replenished on time for the continued satisfaction and retention of your consumers.

This need for information and insights into which stores need what requires a retail execution solution that quickly updates this data on to your analytics dashboard. By the way, do you have one?

When it comes to Product Distribution, the question you need to ask is: “Does our retail execution strategy/solution improve product & SKU distribution across all the stores involved?”

Merchandising

Some well-known terms that are common in this section are Share of Shelf (SS), Share of Visible Inventory (SOVI), Facings, Plan-o-gram, and Phantom Inventory. You define how and where your SKUs should be placed within a store. So it’s critical!

A clearly defined merchandising strategy will state in which aisle should an SKU be displayed, where within the aisle should it be displayed, how many facings do they get, the number of units that should be present at any time, what are its neighboring products, how shopper-friendly is the placement, and much more.

Your merchandising plans and strategies should change from channel to channel. A traditional store merch layout will not be beneficial in a modern store. It’s also a common blunder, especially when it comes to traditional trade channels.

Most CPG producers concentrate more on modern and on-premise trade channels while neglecting traditional trade. However, that’s a blunder that will cost dearly. Especially in many countries in Asia, consumers are more inclined to buying products in traditional stores as opposed to super/hypermarkets.

So, when you are creating your merch layouts as part of retail execution, the question you need to ask is: “Will the solution/strategy make my product visible and available to the shoppers across all trade channels?”

Pricing & Promotions

Zeus went to Store A to buy XYZ cereal, and Jupiter also went to buy XYZ cereal, but at store B. In both stores, XYZ cereal is priced at $4.99. However, at the end of their shopping, Zeus ended up buying ABC cereal, whereas Jupiter did buy XYZ cereal. What happened? Why did Zeus change his mind? Let’s look at a few factors that could have influenced Zeus.

Found a less expensive cereal with the same nutrition and value. Came across a competitor who offered the same pricing but more nutrients. A competitor is a couple of dollars more expensive but offered 25% extra cereal. A newcomer has a promotional offer for a bundle pack. There are no attractive promotions for XYZ, but ABC had quite a few. Zeus made a last-minute decision to try something different. These are some of the many factors that could have influenced Zeus to detract from his go-to cereal.

Moral of the Story: Along with Merchandising, Pricing & promotions are essential within the store. Based on the POS and shopper data that you collect, you have to determine what pricing and promotions would help your brand maintain or gain shoppers’ attention and sale, at that particular store/area/geography. Failing to do so will affect you dearly.

So, as part of your retail execution strategy, you should ask yourself: “Will this retail execution strategy/solution help me in strategizing pricing and promotions for different trade channels and stores?”

Store Audits (Compliance Audits)

Also known as Retail Audits, this activity is at the core of the entire retail execution process. Without audits, you will never know what’s happening at your stores. Merchandising, pricing & promotions should be continuously audited.

The primary motive of audits is to check compliance of the marketing strategy. Many hours are spent in perfecting retail strategy and plans by sales & marketing managers, VPs, and CXOs. Nonetheless, when these plans are not effectively applied or executed at the store level, it becomes a waste of time.

When required, your supply and distribution functions should also go through the auditing process as they replenish the stock at stores.

Moreover, in general, audits also take time as your auditor/field rep should analyze each parameter and KPI to ensure maximum compliance. (Maximum because a 100% compliance is practically unachievable). Some CPGs need this process done daily.

So, when you are creating your retail execution strategy/solution, you have to answer the question: “Does the strategy/solution make my retail audits fast, effective & efficient?”

Analyze Store Performance

Dashboards, Analytics, Infographics, Business Intelligence – These are some terms that come to our mind when we say “Analyze Performance.” And yes, they are needed when it comes to analyzing store performance.

After all the plans, execution, audits, and evaluation, the results should be recorded as data with multiple data points. It is by analyzing this data, that insight into a store’s performance is obtained. This aspect is vital, as it helps you change your strategy for each store.

As the first point of contact for your retailers, field reps should have access to insights for all the stores assigned to them. It helps them make better decisions and initiate negotiations with retailers, to make changes, if necessary.

As you strategize your retail execution, you need to know, “How can we analyze and gather accurate data from the retailers while sharing the same information to store reps in real-time?”

Field Rep Management

An area of challenge for every product manufacturer and distributor out there. Let’s understand field rep management with a simple example. Rajesh, the area manager, has ten field reps and 40 retailers assigned him to currently. He also has a target of increasing sales in the area by 10 % by the next quarter.

Now, he has to effectively assign these ten reps to the existing 40 retailers to check merchandising, pricing, promotions, shopper experience, and also explore new opportunities within the area. If all these functions are carried out at their max effort, then Rajesh can most certainly meet his target.

However, at the end of the quarter, Rajesh could only achieve 3% of his target through his field reps. Let’s look at a few reasons that could have facilitated this result:

Field reps could not reach the stores on time. Misusing work hours for unproductive activities. There was no way to monitor the daily activity of the reps. Insufficient store data on existing retailers. Ineffective tools to analyze in-store performances, thereby hindering productive decisions. Replenishment of stock is inconsistent Unable to analyze competitor’s product offerings. The list can go on. Nonetheless, all these causes of failure are realistic. So, every manager should have a robust field management strategy as they play a critical role in enabling sales. According to a survey done, 61.7% of a field rep’s time is spent on unproductive activities. More than 72% of field reps agree that they can do their jobs better if stores are assigned appropriately along with a navigation facility.

Especially when it comes to Direct Store Delivery and Van Sales, field rep management must be part of everyday operations. This need demands that managers should consider a solution to manage field reps and also provide them with all the tools necessary to effectively do their job.

A question to ask yourself: “How effective is my field rep management and how efficient are my field reps?”

Educate Staff/Field Reps

An uneducated staff/field rep, who is not updated on the plans, strategies, changes, tools; will perform poorly in their job. Field reps, especially, need to have access to the latest updates at all times. CPG companies must invest their resources in providing sufficient training to their staff.

Retail Execution Solutions – BI Tools

BI Tool

Every CPG company, distributor, and retailer SHOULD have a Retail Execution Solution. For a very long time, companies used paper or excel based applications for retail execution. Some still do. However, the rapid changes occurring in the retail world demand adoption of technology into the everyday process.

Since the ascension of SaaS, cloud, and mobile technologies, many innovators have established revolutionary retail execution software which created transparency around daily operations and paved the way to identifying new execution opportunities. These opportunities, in turn, improve brand presence and enable sales.

This result establishes the importance of utilizing retail execution software or solutions to its max. And so, it is pertinent to know the features that should be present in a retail execution solution.

Note: The retail execution requirement can define features in a solution, and quite a few solutions offer custom enhancements to suit the needs.

Data Visualization & Analytics Dashboard

Visualizing data is necessary from CXO level to Field Reps & in-store staff. Your retail execution solution must possess Business Intelligence or Retail Intelligence as part of their solution. They should enable creating KPIs, measuring KPIs, analyzing trends, and make necessary changes to the business process.

It is through analytic dashboards that insights are gained on sales, merchandising, promotions, and shopper experience. Moreover, it is the only way to measure individual or collective performance of stores. A failure to have an intelligent dashboard as part of your retail execution solution will hinder your growth and affect the manufacturer-retailer relationship.

Geospatial Analysis

Geotagging & Mapping Integration makes it easier for tracking and analyzing from a store level to country level, effortlessly. It facilitates a top-down approach, where a decision-maker can identify areas that need improvement and take necessary action. So, the application that you choose should let you record the location of the store as well as align the performance metrics to it, thereby enabling geospatial analysis.

This feature is also required when it comes to field rep management. A solution that can track the route activity to all of the rep’s decision in a day helps in assessing time management. It also helps in optimizing the rep’s route for better productivity.

Mobile/Desktop UX Would you buy a Ferrari with a top-notch engine under the hood but has an alien-like interface for operation? We certainly hope not. The same logic applies for UI/UX of your retail execution solution. The user interface should be simple to operate and easily understood.

Be it navigation through the app or making changes where required, the user experience should be seamless. A complex UI maybe fancy to look at, but everyday activity will end up being a nightmare. Choose a retail execution solution that has a simple user interface yet powerful enough to get the job done.

Image Recognition/Picture Capture

One image can explain better than 100 words. A picture of the aisle with your products can give you a better understanding of the number of facings, out-of-stock, empty spaces, the share of shelf, the share of visible inventory, strategic compliance (planogram, pricing, promotion, and more), and competitor strategy at the store level.

Similarly, image recognition is an advanced feature which can automatically detect all the above, without any manual interference. This feature utilizes Machine Learning technology and is in high demand amongst many CPG companies and retailers, despite a higher price tag. A capable image recognition application will help you scan to the minute detail on the shelf and analyze it with pre-defined KPIs and compliance metrics.

Voice Capture & Enablement

Your solution should be capable of recording conversations between field reps and store managers. These recordings, after manual quality checks, can establish the authenticity of store visits and audits. They can also be used for future training of field reps. With such detail, store analysis and KPI measurement become effective.

As an advanced feature, your application can also possess natural language processing (NLP) for faster operations and retrieval of data. This saves time in navigation. For example, instead of manually searching for Store C’s performance among 100s of stores in that area, you can state the name, destination, and locality of the store to fetch the information.

Though an advanced feature, it is currently available with multiple vendors and quite a few offer custom development to include this tool as part of the overall solution.

Field Rep Management

As mentioned earlier, this feature is critical for success and should be part of your retail execution solution at any cost. It will also help you track your field rep activity as well as assign stores and optimize routes. Apart from these necessary capabilities, an effective execution solution with field rep management should enable the following:

Retail Activity Optimization:

Utilize POS data to determine the next store that deserves attention and what to do there to improve sales. This feature makes the job easier for professionals in DSD and Van Sales.

Gamification –

This feature enables gaming activities as part of the execution, to encourage competition among field reps and staff. Also acts as a stress buster on a stressful day.

Inflight Analytics –

This feature is used for gaining essential insights and performance opportunities during Flight. It can be just before a rep enters the store or while waiting at the store.

Social Capabilities –

A solution that lets the managers, reps, and their peers communicate with each other is very useful in driving sales. Faster feedback results in rapid improvement.

Distributor Management

Establishing, analyzing, and improving the manufacturer-distributor relationship should be part of your solution. It allows you to connect with your distributors, quickly discuss strategy, and implement the discussion with your distributor.

Advanced Features – Features that should be present in the near future

These features, though present in a few solutions, are currently expensive to adopt and not a priority for many CPG companies. Nonetheless, as we enter a new decade with undeniable paradigm shifts in brick and mortar, these features will help determine your next move for sustenance and success.

Predictive Analytics

By integrating AI and ML, your analytics platforms evolve into intelligent partners. They begin to recognize patterns that human minds often skip or overlook. These predictions lead to exploring new opportunities and ponder on ideas that have a lucrative potential.

Virtual & Augmented Reality

They are already part of many industries such as gaming, entertainment, manufacturing, and more. It’s only a matter of time before VR and AR become a staple in retail execution. It can be part of a holographic planning event for managers or help a shopper gain a virtual/augmented experience of the product; the number of application possibilities is limitless with this feature. It is bound the elevate retail execution by many leaps.

Types of Deployment

Any retail execution solution is designed, built, and deployed as per requirement. Predominantly, there are two types of deployment in the industry:

On-Site

Some CPG companies may want to host their solutions on a private server and have them installed on-site. The reasons for this type of deployment can be many; however, access to authorized personnel within a base of operation is hailed as primary.

Cloud

Many manufacturers have shifted their focus on mobility and accessibility, as it offers convenience to work from multiple locations. Also, with increase in BYOD (Bring Your Own Device) policy across the industry, opting for a cloud-based solution makes decision making faster and easier.

Note: Type of deployment you choose should always depend on the areas where retail execution is required.

Importance & Future of Retail Execution

It is MORE paramount than ever! The retail business is evolving very fast, and keeping up with changes should also pick up the pace. CPG companies must invest their resources in effective retail execution strategies, solutions, and ways to measure performance at the brick & mortar.

Nobody likes change, but change is inevitable. With retail environment changing, CPG companies should embrace it with arms wide open and enter a new age of retail where technology becomes Man’s Best Friend!

Conclusion

In conclusion, we declare that this article is a guideline to any retail professional who wishes to learn and excel in Retail Execution. This information is gained from multiple resources, some internal and some external. Nonetheless, this is a definitive guide which covers the following:

Current State of Retail Execution Definition Aspects of Retail Execution Retail Execution Solutions Features Needed for Execution Types of Deployment Importance & Future of Retail Execution

POP Man