Mike Anthony @ engage consultants

Mike Anthony on Shopper Marketing

Why Is Excellent In-store Execution So Elusive?

with 16 comments

Whether you are in marketing or sales, poor in-store execution is a problem of nightmare proportions: all of the planning, the late nights, the negotiations, the blood sweat, tears and dollars that go into making a brilliant piece of work come to this: did it actually happen in the store in the way it was supposed to? And in far too many cases, the answer is no.

Why Is Excellent In-store Execution So Elusive?Across most of the world compliance is an enormous problem. POPAI suggested that in the UK it was around 50% and heading downwards, and that this may be costing the industry in the UK alone something in the region of US$600 million. I hear anecdotally in the US of rates in some chains in the low thirty percent range.  All that effort, and perhaps half of the shoppers (or maybe more) that were supposed to see the activity, don’t get a chance.

How did we get here? How in this world of collaboration, of integrated systems, and of real time data, are we still in a situation where the industry finds it difficult to set up a display, or put a product on a shelf, or fix a sign in a specific place for a specific period of time. The reasons are complex and many: and I’m sure I won’t be able to pick them all up here; but there are a few things that can be done which, in my experience, consistently improve the situation.

Key actions to improve in-store execution – guaranteed

Incentivize good compliance

The fact that retailers make money as much from fees as they do from sales creates a very perverse situation. In some store audits we have made, over 10% of the entire range in the store is out of stock. For many businesses this would be a shocking statistic as it suggests that customer satisfaction is poor.  Large retailers are insulated f (at least financially) in part by the fees they get from manufacturers, which for some retailers is the difference between profit and loss. Whilst I would never claim that retailers do not care about shoppers, the fact that much of their profit comes from a completely different source perhaps allows a level of sloppiness that might not be permissible in any other industry.

The solution? Increase the percentage of fees paid to be based on a pay for performance basis. We’ve worked with some companies where over 50% of their trade spend is unconditional – that is to say, the retailer gets paid regardless of what they do. Making payments conditional upon execution where possible would be a great first step to rewarding compliance and creating a focus on this.

Make sure what you want is possible

Too often ideas are developed by agencies that aren’t necessarily aware of what is and isn’t allowed in the retailer. Whilst I would never advocate limiting all of our thinking to what retailers will allow (we should push the envelope where it adds massive value), knowing where the boundaries lie and making sure that the agency understands that to break out of this would require special returns is a great start. And this means, marketers, a really good brief that really explains the retail reality. Few marketers on either the client side or the agency side have worked in retail – but this retail reality needs to be baked into the activity from the start.

Motivate ALL of the key people

Whilst the buyer is key to any retail relationship – it is not the buyer who actually does stuff. Logistics, operations, marketing: a whole raft of other people in the retail business are involved, and retail is a people intensive business. Understanding the needs of all of these people in the process, and ensuring that there needs are met, considered and addressed will always help with compliance. A good sales person will make sure her pitch meets the buyer’s needs. A great sales person will have a pitch for all of the departments and will either deliver this personally, or will arm the buyer with enough so that he can persuade these people on her behalf.

Do fewer things

The number of activities being executed at retail continues to rise. The number of staff in stores does not (in many cases it has gone down). I don’t have any data on this but it stands to reason that too many activities may well affect the quality of that execution. Doing fewer, more important activities and promotions might allow teams across the business to focus on what really is important.

Measure and monitor

Lastly, if it is important, measure it. Checking that things happened the way they were supposed to and then making changes to future actions to improve lies at the heart of everything. Too often marketers are too busy getting on this the next activity to check how the previous one went (which goes back to the point above).

The situation is complicated for sure. If it was simple someone would have cracked it by now. By addressing these key five things however marketers and key account managers can immediately make their scarce resources go further and deliver an immediate improvement in Return on Investment. I’m sure there are many other factors, and many other solutions – please share these so that we can all make progress towards better in-store execution.

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Written by Mike Anthony

May 17, 2013 at 9:38 am

Posted in Compliance, In-Store

16 Responses

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  1. Hi Mike,

    How’s life? Very good article!

    Best regards, Elco

    Elco Schwartz

    May 17, 2013 at 10:09 am

    • HI Elco,

      All is excellent thanks! And glad you liked the article too! Hope all is well with you – give me a call sometime!

      All the best,

      Mike

      Mike Anthony

      May 17, 2013 at 4:45 pm

  2. I could write a novel about this – but shall refrain – expcept a few remarks

    Some years back it became the trend to have a trade marketing manager (department), who were to be the gate keeper to ensure that the marketing plans “dreamed up” by marketing were executable in the field force and the trade.

    This works only if you have a strong enought trade marketing manager that dare to stand up to both the Marketing and Sales director and say “Hey, time out – we need to ….” .

    Many companies have started realizing this does and to get a more holesome process combined the Sales and Marketing Director positions into a Commercial Director position responsible for both Marketing and Field execution.

    In my experience only few people have equal strenght in both sides and tend to focus on the one where they are more comfortable, which means the problem is not entirely solved.

    Peter Andersen

    May 17, 2013 at 10:31 am

    • Hi Peter,

      Thanks for this and I agree – an effective trade marketer can be part of the solution – unfortunately as you say they are not always empowered, and are often just squeezed between their marketing and sales peers.

      Your suggestion of a Commercial Director is an interesting one, and in our book “The Shopper Marketing Revolution”, we advocate this in some circumstances as part of a full set of organizational recommendations for this area. It’s not always the right solution but it can sometimes help.

      Thanks for adding to the list of things that can be done… Maybe you should write a book on the topic (but read mine first) 😉

      All the best,

      Mike

      Mike Anthony

      May 17, 2013 at 4:50 pm

  3. In my experience working with office superstores in the U.S., the weak link in the chain of executing displays or special merchandising campaigns is the store personnel. Strong competition ensures a low-wage, high employee turnover environment that attracts mostly the less-motivated, less-educated store associates. Store management is often over-worked and the hourly wage workers often have neither the knowledge nor the motivation to pull a pallet of merchandise out of the back room and set it up properly in the correct store location. Best way for large companies to ensure proper store execution is essentially to do the store’s job for them by having their manufacturer’s sales reps coordinate execution with a 3rd party group that goes into each store and if necessary, set up the display themselves. It might cost upwards of $1M to do that, but what’s the cost of 25% non-execution rate when your national ad campaign is running and your product is highly seasonal?

    Jeff Haines

    May 17, 2013 at 10:00 pm

    • Hi Jeff,
      Thanks for this – and I agree very much with your point.
      Store Management are overworked and whilst your display is important to you, it is hardly a priority to them.
      The staff are on low wages with no incentive scheme so who cares enough?
      As you say, the choice is either poor compliance or take accountability and take action. Too many on both the manufacturer and the retail side of the fence simple don’t seem to care enough ( perhaps because they are too busy planning the next activity). Do less, well would seem to be what is required.
      And as for your point about paying for things to happen – that should be a simple RoI equation – either it pays to execute the activity well, or one should question why it is being done in the first place.

      Thanks for reading and for contributing!

      All the best,

      Mike

      Mike Anthony

      May 18, 2013 at 5:54 pm

  4. Hi Mike

    Seeing an excellent article after very long time

    great

    regards
    das

  5. Hi,
    It is a very good article and I agree. The point is we clearly show and tell the benefits of retailers because we have to build our business based on relationships. ..

    Volkan Muşlu

    May 18, 2013 at 3:07 pm

    • Hi Volkan,
      Thanks – and yes building the right relationships is key. But that isn’t always the head office buyer – there are many others too.

      The challenge is to take ownership and work out what needs to be done, and do it. We spend too much money to do stuff badly.

      Thanks again for joining the discussion.

      All the best,

      Mike

      Mike Anthony

      May 18, 2013 at 5:57 pm

  6. Hi Mike,
    It would be an interesting concept to see an article from the wholesalers / retailers perspective. Often the focus from the brand owners can drive poor in-store discipline due to a number of factors;
    Wrong pack formats, wrong products, wrong consumer mechanics, margins are too slim or even that the product has no above the line marketing spend.
    Wholesalers and retailers supply the consumer demand created by the brands owners, not the other way round!
    Wholesalers sales resource is a key component to keeping the retailers focus on the important features and what is expected, they are a trusted source with long term relationships with the retailers who can and do influence in-store excellence. Creating an all encompassing “road to successful for promotional execution” for brand owners, wholesalers and retailers would be a very useful tool.

    An excellent thought provoking article Mike – well done.

    Simon Hannah

    May 21, 2013 at 3:50 pm

    • Hi Simon,

      Thanks for this – and you are right – the failings that lead to poor results in store can be found in many places. Simple mistakes, not enough motivation, or memories of past disasters often contribute. People typically don’t screw things up deliberately – usually it is because they didn’t know, or it simply wasn’t important enough (to them, relative to everything else they have to do).

      Understanding what needs to happen, who needs to do it, ensuring that they know what they need to do, and then motivating or persuading them to do it, is the key to getting anything done…

      Thanks very much for your kind words and for your contribution to the discussion – very much appreciated.

      All the best,

      Mike

      Mike Anthony

      May 22, 2013 at 11:03 am

  7. […] last post focused on poor in-store execution and how much it was costing the industry. But what about the activity that is activated exactly as […]

  8. Indeed execution in the U.S. is at least as challenged as your report of the UK. We find the same in Europe both East and Western, in South and Latin America and in the Middle East.

    Using traditional measurements such as audits, does not give enough transparency to execution to be useful. In a recent seasonal promotion in the largest retailer in the world over one third of their “execution” was missing an important component which rendered the displays impotent and caused a return of product at a cost that turned a country wide profit into a year long-country wide loss! Traditional audits missed the miscue altogether.

    Mike Spindler

    May 27, 2013 at 9:39 pm

  9. never experienced some of the problems mentioned here. One big item that affects execution is communication at store level and merchandising level PRIOR to product arrival and subsequent “correction of errors” after placement. Most promos are significant relative to making and exceeding last years numbers and that is significant in getting buyer and store support for placement.

    Bobby C.

    June 20, 2013 at 12:58 am

    • Hi Bobby,

      Thanks – I agree that getting and maintaining cooperation at store level is critical. In this case the execution was great but six months on the display had deteriorated – clearly what was once a priority is no longer – perhaps both retail and manufacturer teams have moved on to new “priorities” – which I think is one of the problems. There is so much Instore activity (30%+ products on deal in some chains) which ones are the priorities? Perhaps less is more?

      Thanks

      Mike

      All the best

      Mike Anthony

      June 20, 2013 at 11:15 am


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