CPGmatters: Has In-Store Implementation Reached Its Moment of Truth?

Discussion
Oct 27, 2011
James Tenser

Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.

With a mandate of finding ways to run stores more efficiently, the In-Store Implementation (ISI) Network hosted "Sense & Perform," a pre-conference workshop at the LEAD Marketing Conference. Many in the audience agreed: the next wave of innovation must be focused on finding ways to drive greater performance within existing stores.

Much of the ISI workshop program was focused on identifying and sharing practices and tools that are available to make a difference in in-store implementation.

In a presentation focused on sustainable compliance techniques, Greg Gates, VP, image merchandising solutions at Gladson, related case study examples applying tools for maintaining planogram integrity. "It’s important to execute planogram sets accurately and quickly at the store level and maintain planogram compliance for the life of the set," said Mr. Gates.

He reviewed how sustainable compliance and higher profits can be achieved through attention to three core elements: accurate product data, efficient planogram creation, and better shelf execution and maintenance tools.

Joe Nassour, CEO of RetailTactics, a founding supporter of ISI Network, presented a research proposal aimed at developing an action and communications tool for store managers that would automate best practices and reduce daily decision stress.

"Failure to properly communicate category objectives is cited as the number one barrier to implementation," he said. "The core challenge for store managers is how to handle too many tasks from too many sources."

Mr. Nassour noted that, "even an average store manager at an average supermarket chain is running a $26M company." With 100 or more employees to manage and hundreds of priorities to juggle, he added, "Store managers need to be coached on how to be better coaches."

In the ensuing discussion, audience member James Hare, regional manager for food marketer Mariani Premium, suggested, "For store managers to be most effective, don’t hold their reins too close. Empower them."

The workshop concluded with a roundtable discussion that featured ISI Network blue-ribbon advisors, Christopher Hoyt, president of Hoyt & Co., Dick Blatt, president of Planar World Consulting LLC, and former CEO of POPAI, and Win Weber.

"The structure of the store is decades outdated," argued Mr. Weber, who identified two key organizational changes he believes would enable a culture of greater implementation performance: "Number one, put a manager of merchandising into the store itself. Number two, put a senior executive of execution at retail headquarters."

Discussion Questions: Is the key to improving in-store execution empowering store managers? How may the organizational structures of retailers have to be realigned to better drive in-store compliance and performance?

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9 Comments on "CPGmatters: Has In-Store Implementation Reached Its Moment of Truth?"


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Ryan Mathews
Guest
9 years 6 months ago
It all depends what problem you are solving. My contention is that — from its inception — the self-service supermarket has not been primarily a merchandising venue, but rather the penultimate step in a logistical supply chain which begins at a manufacturer’s factory and ends in a consumer’s pantry. Most stores are set up like a mini-warehouse. Products are assorted to facilitate stocking and inventory, not necessarily sales. The “best” example of this is the cereal aisle where — in most stores — the product is shelved by manufacturer rather than product type. If, as a consumer, I wake up in the morning craving a nice bowl of General Mills with fruit I’m all set. If, on the other hand, I want to compare nutritional information on oat cereals I have to run back and forth the length of the aisle. So … back to the question. If I believe logistics is mission critical and the manager’s job ought to be labor scheduling, stocking, shrink control, receiving, etc., they don’t need to be empowered. In… Read more »
Bill Emerson
Guest
Bill Emerson
9 years 6 months ago

Given the diversity of the American consumer and their preferences, it is only common sense that putting decision-making closer to the customer is a solid objective. It is also supported empirically (Home Depot pre Nardelli, Bed, Bath & Beyond and Macy’s “My Macy’s” early results for instance).

That said, there are two major challenges. First is finding, paying, and training the individuals to assume these roles. Too often, national retailers put their highest paid/highest authority (and most desirable) positions in the corporate office. Secondly, and most complex, is changing a company culture that, for decades, has been consolidating authority into central offices and gauging performance on company totals. This is an incredibly messy task, a lot easier to talk about than to accomplish. There is, however, no alternative if a retailer is to be successful.

Doron Levy
Guest
Doron Levy
9 years 6 months ago

I would say it’s all about empowering the store manager. Empowerment has a residual effect as well. An empowered manager is most likely to have empowered associates that can make real time decisions accurately without having to wait for the chain of command. Let’s face it, the problems in execution lie in 2 areas: merchandising and customer service. We all know that the customer is always right but the person at the customer service desk that denies a $5 refund because of ‘policy’ is not empowered nor are they doing the business any favors. In terms of merchandising, from day one the associate and/or manager must be trained correctly to execute displays and plan-o-grams correctly. This creates empowerment and allows team members to think for themselves after gaining some experience on the floor. The organizational structure is already there. You have a store manager, a varied amount of assistants and associates. It’s just a question of getting them on board and allowing them to work unfettered.

Dan Raftery
Guest
9 years 6 months ago
Weber knows what he is talking about. He is offering a glimpse of what can be learned from the past successes and mistakes of supermarket operators. I’ll add from my personal experience, back when I had a real job. Weber’s suggestion of an in-store merchandising manager is what we used to call the assistant manager. And his senior executive of execution is what we used to call the vice presidents of each major department. The piece he missed is the squad of district-level merchandise supervisors who sit between HQ and store. This is the model I experienced in the ’70s and early ’80s. No planogram software. Little sales data. A lot of personal interaction, training and team building. The result: people performed because other people held them personally accountable — or they were gone. Oh, and the manufacturer sales reps were also around regularly to support these objectives and activities. A very important contribution. As this accountability system was slowly dismantled, the company that I had worked for shrank and eventually fell into bankruptcy. Today’s… Read more »
Verlin Youd
Guest
9 years 6 months ago

Manager empowerment can be a big contributor, if that manager has the proper level of training combined with access to the information and tools necessary to be able to make decisions and execute in-store. The challenge is that in most cases, retail training programs provide the minimum required vs amount required to enable success. In addition, store managers still don’t have access to information and tools to use that information in their daily execution.

Mark Heckman
Guest
9 years 6 months ago
As one that has spent most of his career on the retail side of the business, I know two things to be true. 1. (As Win Weber declares)… the structure and the priorities of the store are outdated. 2. Unless you can attach a monetary benefit to the retailer of making an investment for changing the store structure, it will likely not happen. If you buy-in to the aforementioned, then it is logical that we as an industry, or specifically those that are in position to measure monetary benefits of change and opportunity costs of status quo, must step up make a case for doing so. I know of no store manager who is looking for yet another thing to do in his or her day, so a monetary case must be made for providing additional labor and personnel necessary for a strong compliant operation. With the advent of “e-shopping” compliance and in-store execution has become increasingly important. While out of stocks, promotional compliance, and shelf integrity have always had their benefits…..now that many shoppers… Read more »
James Tenser
Guest
9 years 6 months ago

Kudos to the commentators so far. I’m personally quite proud about what ISI Network accomplished with its first-ever public gathering at the LEAD workshop.

Most of us understand quite well, however, that clearly identifying the business opportunity and challenge is only the first stage of a fairly large and intricate initiative for our industry.

I invite RW readers and colleagues to visit and download presentations from the ISI Workshop, and to share them with colleagues. Better practices are coming, enabled by superior tools and methods.

We have an opportunity, with the help of big thinkers like Win and Mark and the BrainTrust, to define the vanguard of the next era of retail performance.

Dave Wendland
Guest
9 years 6 months ago

For any retailer who wants to increase sales 20%+ in every category they need look no further than the shelf. There are four key elements that create the “moment of truth”: 1) plans developed based on shopper needs and solid data (including fixture details, product images, dimensions, and correct space allocation); 2) communication strategy that lets store personnel know when the category plan is arriving and when it needs to be implemented; 3) shelf execution that is timely, accurate, and consistent; and finally 4) measurement and modifications — categories need refinement between major resets but these changes must be based on performance metrics and shopper expectations.

The bottom line is that there is not one single element that fuels the Moment of Truth at shelf. However, as the age-old expression suggests, “You can’t sell what you don’t have.” Increasing sales at the shelf requires the right product be available when the shopper is ready to make a purchase.

Mike Spindler
Guest
Mike Spindler
9 years 6 months ago

You said a mouthful, Dave.

Compliance to the plan at shelf is less than 50%. ShelfSnap has measured this number in over 200 projects in big and little categories across the largest retailers here and abroad. There are two things NOT done today. Effective compliance measurement is one of those. The second is actually TASKING people with compliance. That responsibility is either no one’s today or it is “everyone’s” which is the same thing.

Until these two things change there will be no progress, as there has been no progress over the last thirty years. What is it worth? 8-14% of full margin sales.

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