The Branded Pantry

We have been looking at the same in-store conditions statistics about the success of new product introductions, the correct placement of POP materials, display compliance, planogram execution, distribution voids and the like for decades.  The industry has attacked supply chain, manufacturing, assortment planning, pricing and CRM with some success.  However, those issues have had little impact with the inefficiencies at the shelf in the Fast Moving Consumer Goods Industry.   

In order to manage the in-store conditions environment, we have to actually measure the in-store conditions in every instance where we spend money to change results.  This is the only way we will be able to identify the cause of results variance in the planned execution vs. actual implementation.  Was it the plan . . . or the execution of the plan?  In some respects both CPG and Retail companies are organized to obfuscate the answer to this issue or even the desire to answer it.   In manufacturing Marketing creates the plan and Sales executes the plan.  In retail Merchandising creates the plan and Operations executes the plan.  Silos have been built which either parent (MY plan was successful) or orphan (THEIR execution was lacking) activities depending on the business results achieved in an effort.  Some of this is caused by politics, however, much of this obfuscation is caused by the lack of verifiable, undistorted data on in-store conditions.  Some examples of this issue we have run across in the last month or two, where some clear in-store measurements would help: 

·         $ 2 Billion Dollar Grocery Retailer, “Our set teams take care of new product cut ins and do it very well.  We have never heard a manufacturer complain about our timing or execution.”

·         $ 8 Billion Dollar Grocery Retailer, “We do not have a formal display program.  Our store personnel decide which products to display.  Manufacturers know we will sell a great deal and are happy with the arrangement.”

·         $4 Billion Dollar Manufacturer, “We were asked to do store by store POGs for a retailer.  It was our first time and was quite expensive.  We have never actually checked to see how they were implemented.”

·         Top 3 Broker Category/Space Planner, “I am responsible for dozens of POGs for my clients in X retailer.  I haven’t been in a store to look at the execution in three years.”

·         Review a divisional shelf set, self-reported status report from combination of system provider, MSO companies servicing a top three grocery retailer.  Review of major category reset across 1,000 stores.  All stores completed on time, perfectly. 

These “results” certainly do not tie out to the findings about the deplorable in-store conditions reported in study after recent study.   Whether because of the lack of reliable, affordable measurement or the organizational obfuscation these inefficiencies in in-store conditions have become too expensive for the industry to afford.   Recent studies show that the efficiencies in supply chain, manufacturing and the like are not enough to sustain profitability.  Those studies include results showing: 

·         Market share of brand leaders are declining.

·         70% of brands show lower sales lift from traditional promotion efforts in the last few years.

·         At the same time display compliance, even for the most popular new brands is less than 10% according to IRI.

·         And, according to Catalina, only 2.5% of consumers account for 80% of the average brand sales.   

With recent innovations such as ShelfSnap™ there is no longer a reason not to know how well a plan is executed.  This system makes the measurement and analysis, affordable, quick and reliable so client’s can make the determination of whether the Plan or the Execution of the plan is the cause of variance from expected results.  ShelfSnap™ also produces an unimpeachable measurement so that internal and external business partners can sit down to a productive discussion based on facts.  With this measurement these long standing in-store inefficiencies and profit drains can finally be managed toward better results.