Driving Impact through Efficient, Effective & Integrated Retail Execution
In the ever-evolving landscape of the consumer packaged goods (CPG) industry, retail execution plays a pivotal role in the success of CPG companies. Retail execution encompasses the strategies, activities and operations that bridge the gap between product manufacturing and consumer purchase at the retail level. It involves optimizing product availability, visibility and customer experience to drive sales, build brand loyalty and gain a competitive edge.
Importance & Benefits of Retail Execution
When effectively implemented, retail execution can help CPG companies achieve a variety of benefits, including:
Ensure products are readily available, correctly displayed and promoted
ENHANCE BRAND IMAGE
Create a positive brand image with well-executed merchandising and consistent messaging
IMPROVE CUSTOMER SATISFACTION
Build a seamless shopping experience to drive higher customer engagement and satisfaction with positive reviews
OPTIMIZE PRODUCT ASSORTMENT
Monitor sales data and consumer behavior to make changes at the SKU level
STRENGTHEN RETAIL PARTNERSHIPS
Enhance relationships with retailers, leading to increased shelf space and preferred placement
ENABLE DATA-DRIVEN INSIGHTS
Gain valuable insights into market trends, consumer preferences and the effectiveness of retail strategies.
Challenges that CPGs face with Retail Execution Today
The path to enabling successful retail execution for CPGs is not without its hurdles. From navigating the complex retail landscape to addressing issues related to data, competition and in-store operations, CPGs face several challenges that require careful consideration and proactive solutions:
- Complex retail landscape: With presence across several markets, multiple channels, diverse store formats and varying levels of retailer collaboration, CPG companies must navigate complexity to effectively drive their strategies. Managing different retail partners, aligning with their requirements and tailoring execution plans to different store formats is one of the biggest challenges for CPGs.
- Execution inconsistencies: CPG companies often face challenges in maintaining consistent execution across different retail locations. Issues, such as varying planogram compliance, shelf stock levels and product placement, can negatively impact brand visibility and customer experience. Achieving consistent execution requires effective communication, training and monitoring across geographically dispersed locations.
- Limited influence on in-store execution: CPG companies often have limited control over in-store execution, as the final responsibility lies with the retailer. Retailers may have their own priorities, strategies and resource constraints, which can affect the execution of CPG initiatives. Managing this lack of control and aligning with retailer priorities can pose challenges for CPG companies.
- Intense competition for visibility: Retail execution becomes challenging with numerous brands vying for limited shelf space and customer attention, as companies need to differentiate their products, capture shelf space and stand out among competitors. Continuous monitoring to optimize placement and visibility in crowded retail environments requires immense efforts from the field force.
- Higher rate of turnover in field resources: With thousands of field resources executing in-store operations daily, having a high attrition rate is perilous for CPGs. As new resources are retrained and establish new relationships with customers, this attrition often results in revenue loss for CPGs.
- Fragmented retail data and data governance: Obtaining accurate and timely retail data can be challenging due to the fragmented nature of data sources. CPG companies often rely on data from multiple retailers, each with different reporting systems and data formats. Consolidating and analyzing this data to derive actionable insights can be time-consuming and resource intensive. Governance is critical, as data is sourced from various business activities, including activity data on how field team is performing, observational data on information about the brand’s presence in-store, sales data that covers transactions and master data for mapping and alignment of business functionality across different BUs.
Mitigating Retail Execution Challenges with Technology
|Retail Execution Solution||Enable field sales representatives to access real-time information, capture data and perform various tasks enabled with guided workflows while onsite at retail locations|
|Integrated CRM||Manage and coordinate various aspects of retail execution, including territory planning, customer tagging, promotions, pricing and merchandising|
|Data & Analytics||Turn data into insights by leveraging retail execution data related to sales, inventory levels, product performance, promotional activities, competition and customer feedback|
|APIs||Enable real-time transfer insights from retail execution for better planning, along with providing on-the-spot nudges and guidance to maximize opportunities for field force|
|Computer Vision||Accelerate field visits via automating data entry activities for pricing, promotion, inventory and more by leveraging computer vision embedded in retail execution solutions|
|Internet of Things (IoT) Devices||Capture real-time data on product availability, stock levels and consumer interactions with IoT devices as smart shelf sensors, electronic shelf labels or beacons|
|Route Optimization (Geolocation & Mapping Tools)||Help field representatives optimize their travel routes, plan efficient store visits and ensure they cover the right locations within their assigned territories|
|Collaboration & Communication Tools||Enable efficient communication, task assignment and coordination between field representatives, merchandisers, sales teams and head office personnel|
How CPGs Can Advance Capabilities in Retail Execution
While several commercial-off-the-shelf (COTS) products offer most of the required advanced capabilities, having the flexibility to customize solutions to improve adoption, efficiency and effectiveness is one of the critical success factors in any retail execution solution, especially if the required capabilities are not part of the solution roadmap.
Driving success in retail execution depends on the implementation of the right solution with the right set of capabilities. It is highly critical to blueprint the desired solution to consider the organizational structure, commercial strategy and goals, and channel mix and store formats, along with internal people and process factors.
We’ve experienced success leveraging a framework in advancing the retail execution solution implementation journey.
This framework is applied along with robust business case development across strategy, people, process and data and technology. From what we’ve seen, projected value is realized in multiple ways:
- ↑ 3-5% net sales growth driven by improved compliance at retail coupled with integrated commercial capabilities
- ↓ 1-2% OpEx realization through productivity gains, route optimization and IT cost savings
In conclusion, retail execution is a critical factor for success in the CPG industry. By effectively managing product placement, inventory and promotions, CPG companies can drive sales, enhance brand visibility and improve customer satisfaction. By advancing capabilities in the technology stack, CPGS can leverage data analytics, foster collaboration with retailers and optimize retail execution to gain a competitive edge in the market.