winning at & around the shelf_ekn_the top 5 retail execution strategies for 2015

8/18/2019 Winning at & Around the Shelf_ekn_The Top 5 Retail Execution Strategies for 2015

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Winning At & Around the ShelfThe Top 5 Retail Execution Strategies for 2015

The consumer is in control of her shopping experience in the age of anytime-anywherecommerce. With price comparisons, promotions and coupons, next-day delivery, reviews andrich product information at her ngertips, the barrier to choose another channel or producthas never been lower. Consumer goods manufacturers who understand that the “moment

of truth” now extends from “shelf to click” will strengthen their retail execution capabilities bydeepening customer insight and engagement, contextualizing and personalizing promotions,improving supply chain accuracy and agility, and building a smarter, mobile-enabled salesforce.

ndustry Point of View


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Winning Around the Shelf in the Age of the Empowered Consumer

State of the consumer expectations State of the industry

To meet or exceed changing consumer expectations, manufacturers will need to tighten their retail ex-

ecution focus on two very specic goals – winning at the shelf (ensuring right-time, right-place, right-SKU

availability) and winning around it (personalizing customer engagement and oering alternative paths to

purchase). Such a shift will not be easy and require strategic investments in organizational re-alignment,business process re-engineering, supporting tools and technologies and employee training. Those that get

it right stand to reap signicant rewards - 4.4% decrease in out-of-stocks; 5.4% decrease in costs; 6.3%

increase in sales1.

EKN recommends manufacturers aggressively build capabilities that allow them to:

• Maximize demand fulllment: Consistently ensure availability of the right item in the right SKU

at the right place, right time.

• Protect lost sales: Oer an alternative path to purchase to protect against lost sales from stock-

outs.

• Drive more interest: Better understand and engage customers in-store, oering contextual

communication and promotions.

• Protect brand premium: Oer experiences and information that help justify and protect the

value of the brand, making it more dicult for lower priced alternatives to steal the sale.

Source: EKN’s benchmark research studies, CGT Retail Execution research

EKN 2

1 Secrets to successful manufacturer-retailer collaboration, 2014

prefer personalized offers

85%look up product informationon their mobile device inthe store

1 in 2are dissatisfied with currentout-of-stock levels

53%

are dissatisfied with theirability to measurepromotional effectiveness

1 in 2rate shelf tag accuracy as akey to making their shoppingexperience easy

3 in 4struggle to capture accuratedata about shelf conditions

57%More than

$


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EXPAND FULFILLEMENT STRATEGIES

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Priority Focus Areas

• Invest in getting a single view of inventory across all yourchannel partners and fulllment partners.

• Scale Omni-channel fulllment models such as direct-to-

store (DSD) delivery, drop-ship, shipping to dedicated distri-

bution centers to improve product availability. A recent study

showed that products delivered by DSD were in stock 98.2%

of the time2.

• Work with the retailer to make sure that your products

can be oered via the endless aisle or be made available

from local stores even if they are out-of-stock at a particularstore.

Why it is important

• A product being out-of-

stock is a lost sale for both

the retailer and manufacturer

and impacts their brand

perception.

• Customers’ expectation of

anytime-anywhere commerce

and delivery demands that

retailers and manufacturers

evolve their fulllment models

to support this new reality.

Implemented a Mobile Sales Force Execution solution (including Direct-Store-Delivery) to help its eld

employees sell products directly. This ensured that smaller stores always had adequate stock, improved

product availability and led to a 400% increase in sales performance. The mobile system also oers built-

in intelligence that uses real-time data to help 2,500 eld representatives identify sales opportunities. The

solution was later extended to the pre-sales/account sales team.

2 Direct Store Delivery for Consumer Products Companies, 2014

Identify and evaluate new

fulfillment strategiessuch as Direct Store

Delivery or Drop Shipping

to reduce stock-outs and

protect the sale.

Manage trade promotion activities

with the help of tools and analytical

techniques to improve

speed-to-market, sales perfor-mance, customer experience and

operational efficiency.

Expand fulfillmentstrategies

Improve analytics maturity

and data-sharing with

retailers as an enter-

prise-wide capability.

Contextualize and personalizepromotions

Understand brand and category

performance by store and cus-

tomer segments, and develop anagile supply chain strategy tuned

to customer demand.

Improve supply chain accuracyand agility

Deepen customer insight

Leverage the power of

mobility to drive smarter,

more effective sales teams.

Mobile-enable the

sales team

5 strategiccapabilities to

help manufacturersexcel in 2015:


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CONTEXTUALIZE AND PERSONALIZE PROMOTIONS

EKN 4


• Coordinate marketing plans with retailers’ campaigns by

collaborating with their sales and marketing teams. Ensure

both are working o a common promotions calendar and

budget.

• Assess trade promotions eectiveness at the shelf level

by comparing actual vs. planned spending, revenue, volume

and protability derived. Regularly measuring the impact of

promotions eectiveness will help manufacturers identify

which strategies or combination of price and promotionsare working best. Taking a hard look at how promotions are

performing is the rst step towards improving performance.

• Optimize trade promotions by leveraging data and

advanced analytics: Manufacturers should use past

results, all relevant data (POS, demographic, syndicated

data) and advanced modeling techniques to enable real-

time comparisons of scenarios, pricing options and planned

budgets.

• Create contextual mobile oers based on in-store customer

location and behavior.

Created a children’s cartoon character for the entranc-

es of 7-Eleven stores, merchandised its products in the

open mouth of the character and oered a $1 discountcoupon on the products when a soft drink was pur-

chased. As a result it grew overall sales of confectionary

for the category and volume and value of sales for the

manufacturer.

Launched the Kellogg’s Family Rewards (KFR) program in

2012 to enhance brand engagement with digital shop-

pers and improve marketing eectiveness. The pro-gram tracks loyalty codes, unique to each package to

identify product type, size and avor and store location

from which the product is bought. Consumers scan the

codes in return for points, which they can exchange for

discounts or prizes. The loyalty code is linked to the com-

pany’s internal product codes, allowing Kellogg’s to gain

insights on real-time behavioral and transaction data and

create a more personalized experience for consumers.

Why it is important

• Trade promotion is the

second largest cost item for

manufacturers, but many still

struggle with measuring the ROI

of trade promotions.

• Manufacturers need to

design integrated and

comprehensive promotional

programs that are tailored to

the specic needs of the retailer

and its customers in order to

drive revenue, volume and

category growth.

3 CGT Retail Execution Study, 2013


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MOBILE-ENABLE THE SALES TEAM

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• Field visit management: Enable map-based visit planning to

help executives optimize their route plans. Provide account-

related information such as product lists, revenue-to-date,

order history, new campaigns on mobile or tablet devices to help

them maintain correct product assortments, planograms and

identify upsell/cross-sell opportunities and track performance.

To ensure planogram compliance and shelf availability, 60%

of manufacturers will deploy a system with Intelligent

Image Interpretation to analyze shelf conditions and

automatically compare them to planograms and proposedactions4.

• Notications: With more than 4 in 10 manufacturers being

dissatised with their retail execution system’s ability to create

intelligent ordering suggestions, collaboration becomes key4.

Collaborate with retailers to integrate with their inventory sys-

tems and institute alerts on stock levels to pre-empt stockouts

• Improved competitive intelligence: Enable easy logging of

competitive pricing, shelf displays and promotions.

• Real-time collaboration: Enable real-time collaborationbetween eld and corporate via social collaboration tools

optimized for the mobile.

• Sponsor in-store Wi-Fi to engage with customers across

multiple channels and to access more customer data.

Why it is important

• Provides the ability to oer

rich supporting data, insights

and capabilities to eld teams

that can help improve decision-

making and performance.

• Free up tasks that were tied

to a desk and enable them to be

performed on a mobile device,

ensuring sales teams remain

focused on their primary goal -

building a strong and mutually

benecial relationship with the

retailer.

Implemented a Mobile Salesforce Automation system– Mobilengine, to help the eld workers and to shorten

the business communication period. The solution ena-

bles sales executive to optimize tour planning, access ac-

count information and product catalogue, and enhance

ow of information between corporate oce and sales

representatives.

Implemented a new automated sales solution that en-ables eld sales teams to manage product, price and

merchandising execution in stores, plan store visits and

in-store audits as well as manage orders and claims. Ne-

spresso can now directly connect with their consumers

and Club Members worldwide through various touch

points. In addition, it introduced personal espresso ma-

chines and coee pads through which it can track exactly

how much coee each owner consumes. The company

also has a dial-in number, using which consumers can or-

der coee online by providing the serial number of the

Nespresso machine and get it delivered to their doorstep.

4 CGT Retail Execution Study, 2013

http://www.sap.com/bin/sapcom/en_us/downloadasset.2013-10-oct-24-22.nespresso-selling-the-perfect-coffee-experience-with-sap-cloud-for-sales-pdf.htmlhttp://www.sap.com/bin/sapcom/en_us/downloadasset.2013-10-oct-24-22.nespresso-selling-the-perfect-coffee-experience-with-sap-cloud-for-sales-pdf.htmlhttp://www.sap.com/bin/sapcom/en_us/downloadasset.2013-10-oct-24-22.nespresso-selling-the-perfect-coffee-experience-with-sap-cloud-for-sales-pdf.htmlhttp://www.sap.com/bin/sapcom/en_us/downloadasset.2013-10-oct-24-22.nespresso-selling-the-perfect-coffee-experience-with-sap-cloud-for-sales-pdf.html


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EKN 6


• Integrate customer analytics into creating category

plans. Use demographic, point of sale and store behavior

data to guide assortment, shelving, promotion and pricing

tactics.

• Establish a more collaborative work process and improve

manufacturer and retailer relationship by creating a common

planning calendar and category plan. Work with the retailer

to align strategic goals, create more localized assortments

and dene a common set of KPIs to measure categoryperformance.

• Invest in integrating demand signal data with baseline

forecasting applications so that forecast accuracy improves.

Constantly track performance against forecasts and adjust

them based on demand spikes and troughs.

5 Secrets to successful manufacturer-retailer collaboration, 2014

IMPROVE SUPPLY CHAIN ACCURACY AND AGILITY

Implemented a single solution for Retail Execution and

Trade Promotion optimization across its European sales

operations. The Retail Execution system enables eld

sales sta to access real-time customer information and

report back to account managers. The Trade Promotion

system helps in improving return on promotional spend.

It also implemented an on-shelf availability project; as a

result of which it has gained near-real time visibility for

each of their SKUs at over 20 retailers and over 30,000

stores, including a two-year history. Information provid-

ers can now submit in-store audit data into the Unilever

data warehouse and business managers can use that in-

formation to make shipping and supply chain decisions

to increase on shelf availability.

Implemented Trade Promotion Management and De-

mand Signal Management solutions. The initiatives in-

tegrate retailers’ POS data, inventory level, shrink and

reclaim data for each product, every day, in each store

to enable a consistent forecasting process across all ac-

count teams and enable them to see which products are

not selling for abnormal periods of times in stores where

they are authorized. By matching this analysis with ship-

ment data, the manufacturer can address distribution

voids and increase forecast accuracy.

4.4% decrease instock-outs

5.4% decrease in

costs5

Why it is important

Impact of successful

collaboration with retailers in

terms of product assortment and

visual merchandising:

Impact of successfulcollaboration with retailers

in terms of demand planning,

fulllment, and supply chain

processes:

6.3% increase in

sales

3.9% increase in

prot5


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• Focus and prioritize use cases/application: Manufacturers

must recognize that attempting to address every conceivable

application of downstream data is impractical. Hence, they

must prioritize use cases that tackle the most common pain

points – on-shelf availability, forecasting and replenishment,

trade promotion eectiveness and category management.

• Standardize data management approach by providing

a common tool for all internal teams as well as to external

retailer partners. Replace manual processes (spreadsheets or

other les) of sharing the data with an automated, web-based

portal that gets updated real-time.

• Create transparent data security and condentiality

guidelines to ensure retailer partners can trust

manufacturers with their data. Also, help them understand

the potential benets, such as becoming higher priority to the

manufacturer and improved manufacturer’s service levels, of

sharing data.

Why it is important

Real-time analytics and customer

insights are the key enablers to

successful retail execution. The top

benets that manufacturers can

gain by data sharing and analytics

include6:

• Improving on-shelf availability

• Lower inventory and safety

stock levels• Sensing product acceptance in

new product launch execution

• Improving shopper/customer

experience

EKN 7

6 The State of Data Sharing, CGT, 2013

DEEPEN CUSTOMER INSIGHT

With the consumer in complete control of their shopping experience, there are fewer second chances in retail.

The “moment of truth” in the store is more eeting than ever. To succeed in this environment, manufactures need

awless retail execution that delivers right time, right place, right product availability and contextual customer

engagement. They must begin by:

• Leveraging the power of analytics and mobility to create a smarter, more pro-active sales force.

• Improving supply chain accuracy and agility with a focus on reducing stock-outs and improving shelf

accuracy.

• Improving in-store customer engagement and conversion through personalized promotions and fulllment

innovation such as endless aisle.

Implemented a cloud-based data management system

to access POS data from one of its retail partners in Ger-

many. The system provides Nestlé with real-time down-

stream data from the retailer’s stores, enhancing supply

chain visibility, improving on-shelf availability and ena-

bling quick response to any potential out-of-stock issues.

Implemented a Multi-Enterprise Demand Sensing system

globally, wherein it uses downstream data from various

sources including POS, channel inventory, warehouse

withdrawals, retailer forecasts and distributor data to

gain visibility into product movement and improve de-

mand forecast accuracy.

http://www.retailsolutions.com/sites/default/files/reports/CGT_Data_Sharing_Study.pdfhttp://www.retailsolutions.com/sites/default/files/reports/CGT_Data_Sharing_Study.pdfhttp://www.retailsolutions.com/sites/default/files/reports/CGT_Data_Sharing_Study.pdf


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