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.
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 (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.