Early in my career, I was lucky enough to work for Columbia Pictures. My role was with the home video division, and I looked after our business with major UK grocers like Tesco, Asda, and Sainsbury’s. I was in my mid-twenties, and it was a really exciting time and a great job. And though VHS tapes have since been consigned to the museum, I learned some valuable lessons during my time in that industry. In those days, a major video release might sell 90 percent of its total volume in the first two weeks of launch, so perfect availability was an absolute must, and getting your product on display in volume was a major success factor.
During the early 1990s, Disney had been incredibly successful in getting its classic titles out to the mass market via grocery stores. They’d created a marketing machine that powerfully combined heavy TV advertising with great in-store displays to convince grocery shoppers to add the latest digitally remastered copy of The Jungle Book or Snow White and the Seven Dwarfs to their shopping baskets. They were the envy of all the other studios. So when Columbia’s Matilda was a huge summer box office success, we knew we had a chance of emulating the Disney model for the VHS release later in the year.
Working with Tesco’s buying team in Cheshunt, UK, we built a plan. Matilda was to be displayed in a freestanding display unit in every store. As a special offer to Tesco’s shoppers, we added an exclusive Tamagotchi (a small handheld gaming device that simulated a pet—the player had to look after this “pet” by “feeding” it, “cleaning” it, and so on), which at the time was the must-have toy for preteens. The launch was set to be huge.
On the day of release, I began visiting stores to bask in what I believed was going to be the glory of a top-notch release. By 9:30 a.m. I’d been to three stores, but not one had the video, let alone the Tamagotchi, on display. The VHS tapes and toys all languished in the stockroom, with no one to merchandise them on the shop floor. By 11:00 a.m., my phone began to ring; and by lunchtime, I was in emergency meetings with the team at Cheshunt.
It became clear that in-store teams had decided not to put up the display. Some felt it was too big; others felt it was too difficult to erect; some claimed that the display didn’t stand up when it was built; many said they hadn’t been informed; and I suspect many others just felt that the video wasn’t important enough to warrant the extra effort it would take to put the product on display.
At the end of the day, just over 20 percent of Tesco’s stores had actually executed the plan. By the end of the week, we got this number up to just under 40 percent, but by then the key selling window was closing. As a result, both Columbia and Tesco lost out. Despite months of planning and negotiating, and thousands of pounds in mutual investment, piles of videos and toys went unsold that week and in the weeks after that. It took three more months and large amounts of additional negotiation and investment to finally clear the stock we’d accumulated.
For a young key account manager, this was a deeply humiliating experience, but it is far from an uncommon one. A recent survey conducted by TradeInsight suggested that 31 percent of consumer packaged goods manufacturers cite trade compliance as a major issue in their business. It’s an issue that has far-reaching implications.
Take, for instance, a typical new product introduction. The process of developing a new product requires many thousands of hours and huge volumes of research dollars to bring to fruition. It takes entire teams months of effort to build marketing plans, packaging and creative designs, and media budgets. Production and logistics investments are required, and sales teams are deployed. After configuring, executing, and evaluating promotions, it is new product development and introduction that absorbs the greatest amount of marketing and sales management time. Yet the success or failure of a new product is dependent on one thing—a shopper being able to buy the product in a store. This means that without outstanding execution at retail, new product introductions are destined to fail.
This blog found in Course 28: The Impact of Poor Execution.