Volatile economy, meet stability: CPG revenue growth management
CPG companies need systems that with agility + flexibility to revaluate promotions, plan capacity, and adjust forecasts. Old, manual systems just can't keep up.
Retail execution is the strategy and activities created to help brands with the in-store promotion, placement, and pricing of consumer packaged goods (CPG) in retail stores. Also known as REX, retail execution also includes inventory management and employee training. REX is the final leg of the sales process for in-store purchases, and last opportunity for CPG brands to capture consumer attention and seal the deal. In the simplest terms, retail execution is the retail activities (from merchandising to order replenishment) designed to bring the brand strategy to life in-store and increase sales.
Where retail execution can get complicated is amid the transition from CPG brand managers to field teams. Field teams are the people on the ground responsible for store displays, inventory management, and product knowledge. (So, in many ways, field teams are also the final steward of your brand.)
And while a well-implemented brick and mortar strategy can make your CX standout, the hard reality is that poor retail execution is responsible for 25% of lost sales.
That stat alone probably makes you want to achieve a certain level of excellence when it comes to retail execution, right?
Yes, CPG companies need a retail execution plan
Creating, implementing, and supporting a retail execution plan will take time and resources, so it’s important to understand why you need one in the first place. After all, the more you believe in what you’re doing, the more likely you are to succeed.
Perhaps the best way to demonstrate the value of the program is to understand the cost of not implementing one:
A whopping 82% of consumers surveyed said they prefer buying CPG products in-store, while Deloitte estimates 90% of companies fail to deliver on their retail execution strategy.
A clear retail execution plan ensures your field team knows exactly how to bring your brand vision to life and gives you the best shot at your product making it into a customers’ cart.
Key elements of retail execution include:
- Merchandising: Choosing product assortment, deciding on in-store product placement, and price determination are all a part of merchandising.
- Promotions: Campaign planning and execution, sales and discounts, and events drive shoppers to retail stores, thereby boosting sales.
- Inventory management: Keeping shelves stocked, and making sure employees can see real-time stock levels, as well as simply reorder items is crucial to successful retail execution.
- Relationship management: Getting feedback from retailers about what works best for in-store promotions and helping them quickly resolve any frustrations improves trust and foundational relationships, which is critical to better outcomes.
- Employee training: The best retail execution strategy in the world won’t work unless you train retail associates in the store on the product, as well as upselling and cross-selling opportunities.
- Data, data, data: Understanding and analyzing customer behavior, sales performance, and retail operation data helps hone your REX so that your next promotions can be even more successful.
Data: The foundation for a retail execution plan
Building a retail execution plan starts with understanding the basics: What’s your goal? What are your methods? How will you measure outcomes?
The goal of REX is simple: To achieve in-store sales. And the method is essentially an ongoing cycle of improvement involving the field team and execution compliance.
Measuring data to continually optimize your plan is key. When it comes to a retail execution plan, there are three types of data that come into play:
- Observational Data: It’s exactly what it sounds like: What do you see in the store? What’s missing? What can be improved? Create attention at the retail level to products and the quality of their presence.
- Activity Data: What are you going to do with what you see? Plan for what ground teams can do to improve displays, keep shelves stocked, and a system for covering the territory.
- Sales Data: Are products moving? How much? At what time? Track the volume of merchandise that’s moving and compare that with the integrity of the displays.
The reviews are in… and they matter a lot when it comes to CPG and retail execution
The top three factors when it comes to researching – and then purchasing – a new CPG product are:
- Product reviews (82%)
- Family & friend recommendations (51%)
- “Best types of products” lists (50%)
If you’re selling a CPG product, you need to make sure your commerce platform is built to perform for the modern shopper. You’ll need great search functions, review options, and real-time information on where a customer could purchase in person, since a majority of customers will search online, but would rather purchase in-store when buying a new item that they’ve never used before.
Understanding the relationship between the marketing and storytelling, the retail presence, and the ultimate stewardship of your brand on the sales floor allows you to leverage every resource. When executed well, the result is a seamless customer experience.
Remember, a customer might ask a store associate a question about your product. At that moment, that team member becomes part Google, part Yelp, and the final voice of your brand. Do they have the information they need at their fingertips? Are they being provided all the data and details that they need?
A report from PWC revealed that 78% of shoppers identify “sales associates with a deep knowledge of the product range” as one of the most critical factors for them when shopping in-store.
How do you make someone else care about quality?
Demonstrate through your actions, and remove any guesswork. Provide your field team with a thorough and thoughtful plan, offering background information, product details, and the importance of the entire chain—from manufacturing to shipping to in-store display to purchase. You can also incentivize high-quality work through bonuses, spiffs, or public praise, instituting a transaction of gratitude and recognition.
Connecting the dots for in-store promotion strengthens your bonds with your field teams, and create a cycle of continuous improvement. Commit to checking in, listening, investing, and appreciating teamwork-driven accomplishment to achieve sales and brand loyalty.
