What is Retail Execution?
Retail Execution is the practice of correctly getting the right item on the right shelf at the right time to maximize shopper engagement, promote the sale of its brand and, to win at the point of sale. It includes many aspects of a consumer-packaged goods (CPG) company’s go-to-market strategy that centers on the last phase of their product’s journey. These store activities include order replenishment, shelf space merchandising, retail audits, and more. It is critical to get the SHELF right to fully leverage the expandability of the Category and maximize annual sales.
Fundamentals of Effective Perfect Store Retail Execution:
- Provide the consumer what they want, when they want it
- Develop a mutually beneficial manufacturer-retailer relationship
- Create the optimal physical retail shopper experience by creating the “Perfect Store”
- Develop strategic pricing & promotions that can be deployed well in-store to drive traffic, awareness and incremental sales
- Data sharing to analyze store performance and generate store specific recommendations
- Information to educate Field Sales Reps and in-store management
- Integrate online, off-line, and supply chain data
- Improve Product Distribution and number of facings
POI 2021 State of the Industry Report Findings – Retail Execution
- Overall satisfaction with the ability to execute at store level increased 19% from the prior year. The largest change is seen with the “agree” category. The group rebounded from 23% agreeing in 2020 to 42% in 2021.
- 82% of respondents (5% decrease vs. 2020) say they have challenges moving capabilities from transactional to analytical.
- Many Retail Execution solutions being used today do not enable field-based users to make required decisions at the store level. Only 30% (up 6%) agree/strongly agree that they have the tools they need to make appropriate decisions.
- Some of this is due to a lack of off-line capabilities. Only 52% of respondents (up 15% from 2020) say that their off-line needs are being met, which leaves 48% of execution teams struggling. This too is an important functionality gap to close.
- Among office-based users, only 25% agree/strongly agree (up 12%) that their analytical needs are being met. Retail analytics is foundational to providing insights around the execution reality in the field. HQ personnel need analytical insights to compete with pricing, go to market strategies, shopper marketing intel, etc. A lack of analytics also impedes retail team leaders from generating region insights and managing field-based personnel.
Retail Execution Recommendations
- Prioritize functionality above delivery method. In the realm of retail execution, the lines between SaaS, managed services, hosted private cloud, and public cloud are blurry and highly dependent on where the deployment(s) will take place. On premise is still as popular as cloud for retail execution capabilities. Don’t be led to believe that you have to take less functionality or flexibility because there is a perception that RetX capabilities are all moving to the cloud. This is simply not the case.
- Continue to prioritize capabilities that will help users be more effective, i.e. to “sell more.” Otherwise, why spend the money? These capabilities include retail activity optimization (RAO), image recognition, guided selling, social selling, gamification, voice recognition, and in-flight analytics.
- Take Bring Your Own Device (BYOD) in Retail Execution seriously, not just as user preference, but also as a standard if you intend to be active in emerging markets.
- Test, script, and test some more to ensure that prospective solutions can meet your off-line requirements for in-flight analytics and complex pricing/promoting. The only way to know is to test pilot the functionality yourself.
- Recognize that a single solution is not likely going to meet your global needs. There is just too much disparity in price, suitability to local requirements, and availability of support. It is typical to have 3-5 solutions for truly global companies.
- Ask for best practices from your vendor or implementation partner. The POI Survey found that 20% of respondents felt strongly that they received best practices in combination with their solution. You often have to ask to receive best practice support from the vendors. You should find out the background(s) of those who are expected to deliver best practices as part of your project. Many vendors have a separate team that can support this effort. It is important to document upfront the sort of best practices you are looking for and incorporate this need into the scope of work.
- Understand specifically what the capabilities each Retail Execution solution offers relative to off-line and complex pricing. There isn’t a need to jointly develop or custom build the vendors solution. There are numerous solutions in market today that have these capabilities and have so for years.
- Consider how advanced retail execution capabilities like image recognition, gamification, retail activity optimization, embedded social capabilities, and guided selling can be added to your sales tool-kit to provide line of sight to in-store opportunities and execution at the store level.
Retail Execution Vendor Call to Action
- Support manufacturer business case development
- Support manufacturer project team with best practices
- HQ, internal team, involvement, analytics/reporting and training
- Vendor capabilities must advance to:
- Enable field-based users to make required decisions
- TPM and RetX system connectivity
- Enhance 3rd party broker connectivity (Ties in with TPM – RetX system connectivity)
- Provide off-line capabilities
- Retail activity optimization
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If you are investigating new solutions and want to know what’s possible in the TPx and RetX space, you can review capabilities and vendor offerings in the POI TPx and Retail Execution Vendor Panoramas.