The Branded Pantry

The association recently interviewed Branded Pantry Blogger Mike Spindler about the evolution of the in-store environment.  The interview is repeated here.

An Interview with Mike:What needs to happen at Retail and how can manufacturers enable this?
There are at least five big trends at retail that are driving the need for change in the U.S. retail market.   All of the changes involve gaining transparency into the last great frontier…the store itself.  Today the store is a data-desert.  No meaningful, accurate in-store intelligence exists for effective demand signaling nor compliance measurements exists.  That is about to change. 1.       Retailers continue to build stores, albeit the “drive for size” is mitigated somewhat by both lack of real estate and the realization that shoppers interpret convenience differently than most retailers or manufacturers. 

2.       Manufacturers and retailers both are having a hard time successfully dealing with implementation problems in-store.  They spend billions to make plans and yet almost none of those plans are executed flawlessly, most of them are executed with some exception to the plan in every store.  The In-Store Implementation Share-group is the most vocal current movement to deal with these issues, but they have been on the table for at least 20 years, with no measureable improvement in execution noted.

3.       Plans generated by both manufacturers and retailers are targeting consumers more closely.  This includes store by store planograms driven by shopper insights (Safeway, Kroger, DelHaize elsewhere).  These types of store specific merchandising and promotion requirements exacerbate the demand signaling and supply chain issues which will increase the impact on implementation problems.  

4.       Manufacturers and retailers are beginning to understand the power of an effective brand message at the shelf, where the shopper can act.  This movement, focused through the P.R.I.S.M. studies and ongoing efforts will perhaps, move billions of advertising dollars out of traditional media venues and through retail stores, on TOP of the billions of promotion dollars.   These dollars will not move, nor stay without effective measurements of compliance and a strong ROI. 

5.       More stores, more store specific plans…..and all the while the ability of the labor force to support these needs has hit a plateau and will begin to shrink.  Both the size and the education/language/motivation capacity of the labor force has probably peaked and will begin to decline at a time when demand will rise.  Some demands are artificial (the myriad of tasks generated by HQ), some are made more difficult by current improvements (CAO ordering and forecasting which reduces pipeline inventory ….and as a consequence safety stock….which has protected consumers to some degree from ineffective compliance).  This labor issue will challenge the business as perhaps the most significant hurdle to retail success, and perhaps become the biggest competitive differentiator for both retail and manufacturer in the next decade. 

In order to deal with these issues we need to gain visibility into the store and onto its shelves so that we can build a true business cycle of planning – doing – measuring – planning – doing…….. 

Manufacturers will need to begin to address these issues in a number of ways:

·         Supporting systems methods for effectively, accurately, incontrovertibly measuring compliance routinely at a census level

·         Supporting the measurements with plan revisions that factor in the learning so that sales improve and waste is dealt with

·         Generating both the plans and information necessary to support this environment, while culling brand plans and practices that generate work but little prospect of payback when brought to store. 

How is your firm addressing this challenge?
Panther Mountain Companies works with and in some cases starts technology companies that offer important new capabilities in the CPG/Retail space. 

We have uncovered four companies that we believe will yield amazing transparency into the retail store shelf and floor.  Together they include both stock-sensing and visualization technologies, and engine to rapidly translate the results into feeds for CAO, DSD ordering,  Task Management, Forecasts, Theft Prevention, Space Management  and other tactical systems.  Support for this comes from a product information capability which overcomes all of the shortcomings that have precluded effective Data Synchronization and utilization in the CPG space to date.  The next 6-9 months will see these companies and their capabilities brought under harness. 

I have seen a lot of change, and been part of a fair bit of it over the years…and this set of technologies, together, bring the most potential I have ever seen of offering true relief from the demand/supply chain inefficiencies the industry has successfully identified but not been able to deal with over the decades. 

What do you think of the work the association has undertaken to advance professional standards in category management training and certifications?
Clearly the association is at an exciting crossroad.  It seems as if the industry is looking for leadership and the association is offering to re-define those involved in connecting the product to the consumer at the shelf.  If this group takes on the mantel of understanding and trying to influence all of the implications for their work with regard to the five trends mentioned earlier, than we have a logical place to begin the extension of planning – doing – measuring.    With the likes of Brian Harris and Win Webber at the Atlanta conference and reports generated by both the ISI Share-group and P.R.I.S.M. we have all of the makings of a new beginning for the profession category management and its role in both manufacturing and retailing organizations.