Retail Execution: What to Measure and How to Optimize
Imagine this.
You have been planning to buy a certain item on the shelf after your salary gets credited. So, when you reach the supermarket, extremely excited to buy the most anticipated product, and find it out of stock! Feels frustrating, right?
Consumer packaged goods (CPG) companies are finding it harder and harder to keep their products in the spotlight as the competition to win at the shelf grows fiercer. As a result, retail execution has never been more crucial—or difficult.
How does retail execution work and why is it important?
The goal of retail execution is to make sure that a consumer products manufacturer’s entire brand strategy is carried out in retail establishments. Retail execution simply seeks to place the appropriate goods on the appropriate shelf at the appropriate moment.
Generally speaking, it follows this cycle –
How to Prepare for Flawless Retail Execution
From relationship management to store audits and in-store merchandising, this procedure covers a wide range of tasks. Because consumers make 70% of their purchasing decisions at the moment of sale, retail execution is important. If a product is out of stock, in an unexpected place, or if a competitor’s product is more alluring due to a promotion, a customer may reconsider their decision. A single category’s sales can increase by three to five percent with effective retail execution. On the other hand, bad retail execution can lose a company 1% to 5% of annual sales, or millions of dollars.
The first step to faultless retail execution is to be able to see what needs to be fixed. Your focus should be on empowering your field teams to take action rather than just collect data. You can do it by continuously tracking your physical presence. When feasible, gather information from individual stores, link it with sales information, and look for areas where the numbers don’t add up (lagging sales is a great first clue that something is wrong).
Crowdsourced mystery shoppers, field team management tools, and the aforementioned sales data are all sources of assistance.
What to Measure in Your Quest for Execution?
Whether you send in mystery shoppers or ask your staff, a good retail audit to find execution flaws should check for a few key things.
On-Shelf Availability
On-shelf accessibility should come first on your list. Did the item actually make it to the shelves? Or is it a result of a supply chain issue that it is stuck in a backroom or not even at the store? Naturally, if it’s not in stock, customers can’t purchase it.
Product Location
In connection with that, you should seek for the products’ locations during your retail audits. If you anticipated that your product would be organised in a specific display, on an end cap, or by the registers, “on the shelf” could mean a number of various things. Even more specifically, you can be on the incorrect shelf—either too high or too low—next to a competition you didn’t expect.
Store Associate Knowledge
Many companies develop training courses for store employees on how to talk about their products, particularly in the consumer electronics industry. Because these employees have the power to make or break a sale, this is an excellent area to concentrate a retail audit on. You want to make sure that they are appropriately representing your brand, praising the appropriate goods, and doing it frequently enough.
Planogram Compliance
Once installed within stores, your planograms will also be worth the time it takes to measure. Your team spends a lot of time developing efficient planograms, therefore it’s not encouraging if the strategy isn’t carried out correctly in practise. During your audits, pay attention to things like shelf layout, facings, item count, shelf tags, and other things.
Prices
Prices are yet another crucial aspect of retail performance that shouldn’t be ignored. Are the prices of your goods reasonable? Your promotions—do they exist? How do your prices compare to those of your on-shelf rivals? Make sure the pricing for your brand is in line with both consumer expectations and your reputation.
Don’t Forget to Act
The first step in executing your retail strategy is to measure your ground reality. It’s not the only step, though. Acting on the data you’ve collected is the next step. Create prioritised, actionable lists from the information for your field teams. Look for the stores that, in relation to your actual sales data, have the biggest foot traffic and the greatest potential for sales. For immediate gains, these are excellent areas to start. Next, rank the remaining locations according to criteria including the volume of issues, overall sales, and strategic importance (like geography or new product launches).
Execution in retail is primarily about consistency. Plan your strategy, put it into practise, assess how it went (the “execution” element), and close any holes. Develop, test, and iterate. When done correctly, this may be a great method to boost sales, safeguard your brand, and expand your company.
Tools for successful retail execution
Multiple teams rely on store-visit data, so sales reps must acquire it promptly and make it available right away. This is necessary since teams frequently need to move rapidly to respond to change. 44 percent of respondents still utilise manual methods for retail execution tasks, which frequently provide inaccurate and out-of-date data, which is an issue. The real-time data and detailed insights that are so important for enhancing salesforce efficiency, fostering improved decision-making, and boosting revenue growth are missed by CPG teams.
Forward-thinking CPGs are relying on digital image recognition along with advanced analytical technologies. This can help to augment the efforts of the field team members. CV gives a real-time view of how products are doing on the shelf (as well as when products are OOS, where they sit, and how this influences purchase), allowing CPGs to quickly address problems.
For companies to be able to gain that knowledge in terms of their retail execution, having a consumer enter and observe how a product or line of items is being portrayed and, hopefully, advocated for, is a really powerful thing in today’s customer centric world.