The Branded Pantry

X (cross) Refer and document via pictures, any changes that are planned for the pog with the shelf status.

One of ShelfSnap’s discoveries in this journey with clients is that once a plan is built and agreed upon by trading partners, changes to that plan are never documented!  ShelfSnap’s experience with two of the top food marketers, with entries in both DSD and center store confirm the fact.

The ShelfSnap compliance service is very particular in delivering store by store discrepancies between what is found on the shelf and what is in the plan.  We routinely ask the client to review the store by store lists at the field level and at the supervisory level.

·         In one company no one could supply a list of approved trade-outs to the plan. 

·         In the other company we did manage to tease out the replacement products but no further approved changes could be documented. 

Recommendation to achieve X-reference to the plan and documentation of agreed upon changes: 

Whenever anyone makes a change to the section they need to take a picture of the entire 3-4’ segment(s) affected and send it to ShelfSnap.

Once uploaded to ShelfSnap the changes can be recorded, documented and incorporated into the current plan. 

ShelfSnap would also record the person submitting those changes. 

Using this method assures that agreed upon changes are documented in a way where they can be maintained.  It further assures that the period audits via pictures, and the pre reset “Fresh Start” will identify all unauthorized changes to the plan. 

Summary:

The F.I.X. process leverages current personnel to capture the shelf.  It takes very little time and almost no training to take and upload the pictures. 

The process leverages available technology as everyone has a digital camera or PDA. 

The process is primarily external to all current IT infrastructure for the retailer or the manufacturer with the exception of the direct feed into the POG software of client choice.

The process TCO is no more than other measurement techniques and yet it increases the probability that:

·         the plan will reach the shelf,

·         shelf changes will be documented and responsibilities identified

·         the plan will actually be able to be measured for impact

Other substitute methods for achieving the measurements necessary to support the F.I.X. are certainly possible.  Direct audits through surveys or hand scan methods have been available for years.  They are expensive to conduct because they take too much time to warrant the use of the normal in-store personnel.  They are difficult to record in a way that is accurate and does not involve some subjective collector judgment or even bias.  Any further clarification of the results is impossible because the source of the collection, the shelf itself, is consumed in the collection act. 

Another method is the use of  POS scan data or delivery data to at least confirm assortment.  This of course does nothing for position, size of set, facings and does surprisingly little for an accurate view of assortment. 

These tools have been around for at least a decade.  The use of these techniques has resulted in the compliance gap we have today.  The new news, is the innovation of digital merchandising measurements brought about through ShelfSnap.  

For a complete copy of this whitepaper,  please email cyndi.metallo@shelfsnap.com

Those words, were uttered by a senior customer officer from a top 10 CPG Food company in a meeting last week to which ShelfSnap was invited.  The words help delineate the line between individuals attempting to lead the industry through the next great leap in productivity and those who view the current state of in-store execution and maintenance as an acceptable cost of doing business.

It isn’t the sentiment that clearly puts the individual into the later group of industry executives.  After all every merchandising program, plan and expenditure made by either manufacturer or retailer has a business expectation of compliance.  As Doug Adams from Prime Consulting said in our white paper Measure Twice, Profit at Once “A lot of people discount the plan numbers about execution.  However if the plan is good, why shouldn’t things be done 100% according to the plan?” 

However, in the discussion reported above, no measurement had been part of the equation.  The discussion continued when ShelfSnap reported between 20-60+% variances from plan in planograms, promotion, new item cut-in and shopper marketing efforts.  The executive remained steadfast in his belief that those numbers should not happen and that it was the responsibility of the broker/distributor to execute flawlessly. 

The truth of course, is that those woeful discrepancies exist despite the best efforts of those brokers and distributors, and that the tools to manage execution and maintenance are simply inadequate to control the chaos that is the shelf within the store. 

So while the executive and his company pay for 100% compliance, they get far, far less than that and as long as they continue doing what they are doing today…that level of problem will continue to exist.  In fact those performance levels become the “cost of doing business” until industry leading companies break out of the pattern and establish new practices that change the result.

With new tools such as ShelfSnap, accurate measurement of the critical on shelf conditions and facings are finally possible and since the actual data is based on pictures, it is indisputable.  For the first time pictures drive the data, they are not arm candy for data collected by the old fashioned, inaccurate, distorted and very disputable hand scan techniques of the past.  The leading edge image and object recognition technology pioneered by ShelfSnap in the middle of the last decade and improved upon every day since, has generated important new clarity and understanding of the vast opportunities that exist simply by level setting actual conditions back to the plan based on ShelfSnap direction.

Some companies led by executives who know that the early adopters will reap the largest competitive gains have a new motto, “trust but verify”.  Or if you like a less controversial statement, this one from Mr. Churchill: “no matter how beautiful the strategy, you should occasionally look at the results.”  

CG companies are struggling with the prospects of having line items, entire brands (and in some cases entire companies) delisted from the shelf lineup at the “BIGS.” The “BIGS” are the large retailers such as Safeway, Kroger, Wal-Mart, Walgreen, 7-Eleven, Target and others.  These retailers have been the engine of growth for CG companies for over 20 years.  The retailers, following each other and now being followed by mid-tier players are all pursuing at least a two prong strategy to bolster profits and build a stronger bond with their target customer segment.  Prong one is the systematic reduction of entire national brands or sizes/flavors of national brands in order to reduce stocking and inventory costs.  Prong two is the introduction of a stronger lineup of Private Label items. 

CG companies will lose sales on the items and brands “rationalized” out of the lineup.  Profitability on items that remain on the shelf will be challenged as the CG companies are being asked to spend more of their ad & promotion dollars supporting those remaining items.  Interestingly the items that will no longer greet consumer on the shelves of the BIGS all have assets, the most important of which are brand equity, roughly translated into consumer interest and loyalty.  Manufacturers who own these brands/items now have decisions to either harvesting them or to build a strategy to thrive, without the “BIGS.” 

Life is possible, and can be quite good the “BIGS.”  There are tens of thousands of items and thousands of brands that have never been distributed, at least broadly, through the “BIGS.”   One such product is SPARKLE. Sparkle was born in WWII as a military formula for reliably cleaning B29 Gun Sights.  After the war it was produced and sold by a paper company, A.J. Funk throughout select channels nationally and more broadly in certain geographies.   Over the years Sparkle was sold by a direct sales group coupled with brokers and distributors.  It gained distribution primarily in grocery stores.  It used the usual promotion and advertising vehicles including radio, print and some local TV.   

As more and more retail consolidation occurred, it became evident that Sparkle needed to find distribution independent of the traditional grocery channels.  Sparkle feared delisting due to limited geographic distribution.  It was also tougher to fund promotions profitably in a market dominated by national brands with much deeper pockets.  In one sense Sparkle was very much caught between a rock and a hard place.  It was a product with some unique glass and plastic cleaning characteristics, but was used most often for cleaning windows and in that regard, was unremarkable vs. the national brands.   Dick Lane came to Sparkle from Jewel to head up sales.  He moved into the President slot after a few years.  He put his very considerable skills to the task of laying out a strategy that would see less dependency on traditional, more competitive markets while developing a path to increased consumer brand recognition and appreciation.   

Dick recognized early on, the appeal of home centers as an alternate shopping choice for Midwest staple needs, particularly general merchandise and cleaning products.  There are some strong local and rural retail brands in the home center space and Sparkle worked hard at becoming a featured brand in those outlets with key seasonal promotions.   He also moved the brand, and high end companion products onto the consumer direct web store years before most brands even began to think about that channel.   

Leveraging the unique streakless-smearless cleaning characteristics of Sparkle, particularly on sensitive surfaces, was the next target.  Sparkle re-sized the product and packaged it with accessories for the professional the academic and the scientist.  Reaching those audiences with a focused message, focused media and focused distribution put Sparkle on the map, and more importantly in the supply cabinet of this new niche group. The native “green” status of Sparkle’s formula was the next brand focal point; with a line extension brought out to accentuate that status, again well ahead of the trend.  

These moves have not just kept the brand in consumers pantry’s but increased year over year sales consistently, with the latest quarter ahead by 30% vs. year ago.   Life after the “BIGS?”  Heck yes, and then some.  According to Dick, who has worked with Panther Mountain for years, “to stay ahead, you need to re-invent your brand every day.”