Do you know these situations when you are out shopping for a product from a particular brand but then its shelf space is empty? Or when you get distracted by some really great in-store promotion and end up buying another brand than the one you actually intended to get?
What if that is happening to your company’s products without you even being aware of it?
Most companies already know that good retail execution is fundamental to successfully sell products in stores. In this post, we talk about why, even in times of increasing online shopping possibilities, retail execution is still very important for companies to consider. Also, we dig a little deeper and outline a process towards successful retail execution management.
A Short Recap – What Is Retail Execution?
In the past, several authors have shown that the term Retail Execution is not universally defined; different people and especially different kinds of companies tend to have different perceptions of it. Research has noted that, for instance, a company’s size and industry has a particular influence on its definition of the term.(i)
For this post, we want to keep it simple though. So here is the general idea:
Companies usually determine a strategy for how they want to present and position their product or advertisements in the stores – this is the theory. Retail execution is the practice: How the product or advertisement campaign is actually displayed at the Point of Sale (POS).(ii)
Why Is Good Retail Execution Necessary?
With more and more people going online for shopping, it may seem unnecessary for some companies to keep spending a lot of time and money on good retail execution. Yet, this can have severe consequences.
Statistics show that a large part of customers still prefers to actually go into the stores and shop offline (iii). Additionally, it has been found that more than 70% of purchasing decisions are made directly at the POS.
Do You Prefer To Shop Online or Offline?
Why Shoppers Prefer To Shop Offline
This means that poorly planned and/or implemented retail execution can cost you millions, if not billions of dollars.
The two questions asked in the introduction of this article, which you both most likely had to answer with “Yes”, might have given you an idea.
So, imagine it is your product that is not on the shelf when a customer is intending to buy it. What is he/she going to do?
In some cases, when it’s not that urgent for him/her to get the product, they might either go to a different store or maybe even come back some other time hoping to be luckier then. In many other cases, though, they would look around the store some more and buy the product from a different brand.
While this may not be as bad this one time, what could happen is that the consumer starts to prefer the other brand over yours (e.g. because it’s cheaper but serves the same purpose for him/her). Consequently, he/she will continue to buy the other brand and you lost yourself a customer.
The same applies to the second situation in which a customer gets attracted to a particularly appealing in-store promotion and ends up buying the other brand’s product instead of yours.
So, what should this imply for you and your company?
First, it means that you want your product to always be available on the shelves in the stores. Second, it also suggests that, whenever possible, you should think about a special in-store promotion to make your product more visible between all the other products.
Successful retail execution, therefore, means to have your product in the right place (i.e. in front of the customer) at exactly the right time (i.e. when the customer wants to buy). In any case, you should make sure to never fall behind in comparison to your competitors.
In this way, you increase the chance of your product being the one picked over another in the scenario described above. This, in turn, directly results in more sales and, thus, higher revenues for you.
If this isn’t reason enough to have a closer look into how you can improve your retail execution!
You know that you could or need to improve in this regard but don’t really know how? Read on to get some ideas!
Find out how Streetspotr can help you improve your Retail Execution!
Four Stages Toward Successful Retail Execution Management
Before thinking about fancy in-store promotion campaigns or where to best have your products positioned, you should first define what your objectives are. Ideally this is done in cooperation with colleagues from different departments to get all distinct perspectives and make the best possible decisions.
This can be everything from evaluating in-store conditions to increasing your sales figures to striving for a higher acquisition of new customers. Even the optimization of processes around product delivery to the various stores can be a goal for your retail execution.
As with any other goal make sure it is measurable; otherwise, you will never know if your strategy is successful.
Once you have set one or more specific goals, you can start designing a strategy to reach them. As with many other things proper planning is key to succeed.
In retail execution that includes the selection of the stores you want to focus on. Maybe there is a geographic region or a particular store chain where your product doesn’t seem to sell well; then you should probably concentrate on these first.
Additionally, you need to determine what you want the in-store execution to look like. This can include, for instance, creating planograms for how your products are to be organized on the shelves or designing the promotional display which you want to put in the stores.
Lastly, you have to think about how to best put all the plans you’ve made in this stage into practice. Who is going to the stores and when? This should be done in cooperation with your sales manager(s) in order to figure out the most effective and efficient way.
Throughout this phase it is essential for you to always keep the goals you are pursuing with your strategy in mind and to not get lost in the multitude of different possibilities.
After you have done all your planning and preparation, it is time to finally implement your ideas.
In some cases this is done by your field service. Depending on the size of your company, this can involve a rather large number of people; managing the whole process can, therefore, be hard and complex. In order to still organize everything as efficiently as possible, a great solution today are mobile field service management tools. Not only does that enable you to communicate with your staff, it also allows them to communicate with each other in real-time.
Additionally, they usually offer all sorts of possibilities for customization. That way, you can arrange all the incoming information in exactly the way you need them to be. Another positive aspect of having a mobile field service management tool is that your field service can report back to you about what your competitors are doing in-store. You have access to this knowledge instantly and can start drawing your conclusion
In other cases, however, information and marketing material is simply sent to the store chains and the staff on-site is expected to implement planograms or set up promotional displays for you. Many companies then send their field service only to check whether everything has been executed correctly. While being a lot faster, you don’t get to know immediately whether your strategy has been implemented as planned.
4. Evaluate (and Adapt)
As with every other strategy, your work is not done after just implementing it. Once your plans have been turned into reality, you have to evaluate and measure whether you are reaching your goals as intended.
Are your sales figures increasing? Are you noticing a higher number of new customers (e.g. through more likes on Social Media pages), etc.?
If this is not the case even after you thorougly planned and implemented your strategy to improve retail execution, you will have to see why that is and make adaptations accordingly. Especially in those cases where it was not your own field service that implemented your strategy, this can, however, be a tedious process.
Due to the usually rather wide spread of the stores, it will take your field service a lot of time and effort to go to every single one and figure out where the problem is in order to ultimately solve it. Not even talking about the costs for you!
In this regard, mobile crowdsourcing may provide relief and save your company a lot of time and money. Problems can be identified in real-time without your field service having to leave their office and you can start planning necessary adaptations immediately.
This process can be repeated as often as necessary until you reach the goals you have set in stage 1. (iv)
This article shows that retail execution should play an important role in every company offering and selling their products offline.
Many people, even millenials (v), still choose going to a physical store over online shopping. The presentation of products in-store can be a decisive factor in the purchasing decision of many customers customers and thus directly results in higher sales and revenues for your company. For that reason, a retail execution strategy should never be planned and/or executed carelessly, simply so that you can say you have one.
In order to succeed in maintaining existing clients and also acquiring new ones, proper in-store presentation and advertisement of your products is key.
There are various options for good retail execution strategies. In order to find the one which will help you reach your goals, comprehensive preparation, execution, and evaluation is necessary.
What are your experiences (positive or negative) with retail execution? Have the situations described above happened to you before? We’re looking forward to your stories in the comments below!
(i) cf. https://sales.everystoreperfect.com/blog-6/improve-retail-execution-6
(ii) cf. https://blog.compliantia.com/2012/08/29/why-in-store-execution-matters/
(iii) cf. https://www.emarketer.com/Article/Shoppers-Germany-Prefer-Buy-In-Store-Rather-than-Online/1014900
(iv) four stages adapted from https://www.infosys.com/industries/consumer-packaged-goods/white-papers/Documents/ideal-stores.pdf
(v) cf. http://www.diamonds.net/News/NewsItem.aspx?ArticleID=59011