Its encouraging to see the ISI (In-Store Implementation) work group start to talk about in-store implementation and the need for the CPG industry to improve on execution at the store.
I think it important that the group define its tasks appropriately so that the solutions sought do not yield “point” solutions only or limit the scope of the “fix” to corporate “silos“. This narrow definition would potentially exclude funcitons that contribute to what might appear to be in-store implementation issues, frustrating solutions.
One of the focal points of the ISI group and a good example of an expensive, stubborn issue is the out-of-stock “symptom”. This issue has generated consistent study results in 52 studies, for 17 years:
- 8% overall out of stock levels in grocer, drug, mass and c-stores, here and abroad
- Mid-teen percentages on promoted products
- 4% lost sales for retailers (3% for manufacturers)
- 70+% of cause is viewed as in-store
Lets examine some of causes contributing to the ”in-store root cause” in the study, but which actually occur as part of some other “silo” of responsibility. (more…)
by: John Pryslak, Prime Consulting
While current, accurate and complete product information data is the foundation of any Health & Wellness program, any competitive advantage is NOT contained in the data itself, but rather in how the program (Guiding Stars, ONQI etc.) is designed and communicated to the consumer.
That said, a lack of current, accurate and complete product information data will be the Achilles heel for a retailer’s Health & Wellness program. Imagine a program where individual products are rated against a defined and proprietary set of nutritional criteria and assigned a rating based on how good they are for you (not TOO hard to imagine since several such programs are already in place). The overall nutritional worth of any item is communicated through a shelf tag that essentially tells the consumer if a product is “safe” to eat, or if they should consult their doctor before ingesting.
The health and wellness effort represents an altruistic endeavor on the part of a retailer to help consumers purchase the most nutritionally dense foods for their money. Unfortunately, the reality that underlies this system is flawed since most of the available data used for these systems is not designed for Health & Wellness in general much less any single rating scale.
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If you remember your tales of Vlad, you may recall that slaying the un-dead requires a stake through the heart, a chance encounter with the light of day or…a silver bullet!
I have had the good fortune to spend some recent time with a few pretty sage industry ICONS and an ICON-in-the-making or two.
There were enough threads in those conversations to weave a bit of common wisdom.
We discussed long standing, unsolved industry ills. These center around the trading partner friction points in the demand chain…. implementation miscues and mis-translations, compliance and actionable measurement, mostly in-store.
If teased hard enough that fabric from these icons we find a couple of truths, some causality, and perhaps a real solution.
The Truths:
- There are no silver bullet solutions to these industry ills. If there were, we would have seen progress in fixing them! And while we have seen billions taken out of supply chain inventories we have seen no real improvements in the in-store implementations that frustrate consumers and waste BILLIONS. The proof of this lies in the statistics measuring out-of-stock levels, excess inventories on slow movers, wasted or ineffective in-store task labor costs, poor promotion execution, and even in shrink levels and price implementation costs and timing. These issues remain at the same levels of inefficiency as was the case when first measured.
- The skepticism that the industry shows in its adoption of new technology is to some degree justified (see truth 1!) but will doom the industry to a continuing, unresolved dialogue of these subjects for years to come. This doesn’t mean we have not spent (we have spent billions) but that we probably look at things too narrowly and seize the solutions that are the least expensive, simplest or constitute “point” fixes that appear to generate “hard” savings.
The cause (or some of them). We, as an industry, have tended to compartmentalize problems (out-of-stocks VS.
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