The Retail Execution Gap

Transcription

1 The Retail Execution Gap From Loading Dock to POS Flowfinity Wireless Inc West Hastings St. Vancouver, BC V6B 5K3 tel (604) web

2 Consumer Packaged Goods (CPG) companies faced with increasing commodities prices and shrinking consumer spending must now more than ever squeeze full value from every merchandising dollar and every store visit. The growing trend to leverage mobile technology as a strategic differentiator has given many companies substantial efficiency gains and improved insight into operations. While many focus their attention on managing and monitoring supply chain and downstream data, improving the measurement of merchandising performance and compliance at the shelf remains a challenge for CPG manufacturers. Direct store delivery (DSD) technology offers insights about whether products were delivered on time and POS data indicates overall sales performance, but there is often a lack of valuable information about what happens between the loading dock and the checkout counter. The visibility gap between the loading dock and POS often requires a leap of faith, or an expensive journey, but it doesn t need to be either. CPG manufacturers fall into one of three categories: (1) Some manufacturers have no visibility into what happens after their products are delivered to retailers loading docks. They take a leap of faith that their products are priced, displayed, and promoted as expected, placing themselves in the hands of third party merchandisers and at the mercy of competitors who do have an in-store presence. (2) Some rely on third party data services to collect and report store visit information. They typically don t have direct access to the data collected, and even if they do, must wait for the data vendor to transcribe and process it. Limited flexibility in being able to request survey or report changes is also part of the cost. The price of this type of service is relatively expensive because it includes not only the cost of personnel to perform the audits but also the overhead cost of management, systems and margins. (3) Some collect retail execution data themselves, but the process is often inefficient. Because of the way store visit surveys are traditionally conducted, delays in having information available for analysis and action, loss of field staff productivity and increased overhead costs through the use of paper, spreadsheets, faxes, or data re-entry are common challenges. This gap in measuring retail execution can lead to misinterpretation of store delivery and downstream data, and translates into lost opportunities in verifying that products are actually displayed according to plan. By improving the management of merchandising compliance, CPG companies can ensure that their products are reaching consumers at the right place and time, ultimately increasing their top line. This can be achieved by leveraging smartphone and tablet technology in the hands of field personnel during any in-store visit. The Retail Execution Gap: From Loading Dock to POS 2

3 Challenges of Measuring Retail Execution Data Collection CPG manufacturers, brokers, or service providers who collect data about retail conditions can be faced with many challenges ranging from inefficiencies to high costs. While many realize there is room for improvement, the question is how and when to implement a new solution and how to calculate ROI. Limitations of Paper and Clipboards - Paper and clipboards are the prevalent method of collecting data from in-store visits. The direct and indirect costs of this process can add up: High printing costs for forms and revisions Difficulties in managing standardization of forms across different regions Inaccuracies from transcription errors or illegible writing Lack of consistency in documents with outdated and current forms in use Inefficient use of employee time through low valueadd activities such as data entry Delays in having access to the data While paper and clipboards are expensive and inefficient, they have until fairly recently been the only method of recording data in the field. Advances in mobile technology have led many organizations to reassess this approach. Lack of coverage - An inefficient or expensive audit process can lead to a lack of coverage in the number of surveys conducted or the number of stores visited. This impacts the ability to influence product performance as companies focus on the bigger volume channels, resulting in lost opportunities to maximize sales across a product line. Lack of independent information - Some companies may not have the resources, time or infrastructure to conduct their own retail audits, and rely on third-party services, brokerage firms or retailers to supply retail execution data. The lack of an independent source of information could lead to inconsistencies or uncertainty about in-store conditions. Costs of these services may also be higher than bringing the process in-house with an effective mobile strategy to manage the information. Analysis and Follow-Up Once store observations are collected, the task of collating and analyzing the data can be costly and time consuming. Many companies use manual processes such as synthesizing information from different spreadsheets and generating manual reports. This increases administrative overhead and causes delays in accessing results and acting on them. It also causes difficulties in identifying trends in particular products, chains, or regions. To effectively manage retail execution, companies should follow up store visits by closing the loop with the company or service responsible for product merchandising. Delays or holes in communication make it difficult to address issues needing attention such as out-of-stocks. With fast moving consumer goods, every extra day taken to identify issues reduces or eliminates the value of corrective action. at the store level. Entire channels might be ignored The Retail Execution Gap: From Loading Dock to POS 3

4 Assessing Retail Execution Measurement Strategies When determining the effectiveness of retail execution measurement strategies, organizations should ask the following questions: How well can sales be linked to campaign planning, campaign execution, delivery, out-of-stocks, and store conditions? What is the current level of visibility in retail stores? Planning Does it extend to all channels? What are outright costs of conducting surveys including printing, labor, fleet management and other expenses? How many hours are spent per day, per employee, entering or collating data from surveys? Can more value be added to every store visit by field personnel reporting on store conditions? How long does it take to generate results from surveys, and what would be the benefits of having immediate access to store visit survey results? What is the follow-up process with brokers or merchandising companies when gaps are identified? Loading Dock POS Voids & Out-of-stocks Promotion Execution Merchandising Compliance Competitor Information The Retail Execution Gap: From Loading Dock to POS 4

5 Opportunities Mobile devices have never been more widely adopted or accessible, and many organizations are already leveraging mobile apps on smartphones and tablets to gain competitive advantage. The consumerization of IT has grown rapidly over the past several years. This has led organizations to adopt new mobile strategies including bring your own device (BYOD). 75% of organizations are now permitting the use of employee-liable devices for business purposes. i With smartphone penetration in the U.S. mobile phone market currently at 43% ii and growing quickly, and an increasing number of employees opting in for BYOD programs, it seems that almost everyone has a smartphone or a tablet. Leveraging them is an economical way to deploy mobile enterprise apps. Brokers and Service Providers Brokers and service providers have the opportunity to leverage mobile apps to improve the value proposition of their offering through improved quality, speed, and coverage. The right mobile solution can also improve transparency to clients with automated reporting, photos, GPS, and automated timesheet billing. Opportunity #1: Reduce the cost of in-store surveys By eliminating printing costs and manual tasks such as data re-entry and analysis, the cost of conducting retail audits can be reduced considerably. Streamlined and easy-to-complete audit forms can reduce time spent on audits in every store, freeing field sales time for other merchandising activities. Opportunity #2: Improve retail survey coverage With dynamic mobile forms and workflows, retail surveys can be created and conducted faster during every store visit. This translates to better coverage and more teams in the stores performing high-value work. The ability to build and update forms and push them to users in the field makes the task of expanding a survey capability to all field staff simple and manageable. Opportunity #3: Bring surveys in-house for lower cost, independent information By conducting surveys in-house instead of, or in addition to using a service provider, organizations can reduce costs of measuring in-store conditions and gain access to independent information, enabling better management of merchandising services purchased. Opportunity #4: Improve Accountability of Field Teams Mobile apps equipped with GPS work location validation can be used to improve the accuracy of reporting, with records from mobile teams that are tagged with the location where the report was submitted. i Aberdeen Group: Enterprise- Grade BYOD Strategies, Sept 2011 ii nielsenwire/online_mobile/ generation-app-62-of-mobileusers own-smartphones/ Accessed The Retail Execution Gap: From Loading Dock to POS 5

6 Components of an effective mobile strategy Offline - Being able to depend on a mobile solution continuously, so that field work is not interrupted, is key to an effective solution. As mobile staff travel in and out of coverage, they need to be able to rely on their mobile applications, and this is only possible with full offline functionality. Modifiable without Programming - The ability for a business user to modify surveys and forms, without having to rely on overburdened IT departments, ultimately delivers control back to the departments responsible for streamlining and improving sales operations. This can be accomplished if the mobile solution is fully customizable without requiring programming for each change. Cross-platform - The advantages of selecting a solution that is compatible with many different smartphones and tablets are multi-fold. Companies who already have mobile devices deployed can benefit from the flexibility to adapt their mobile strategy to new devices in the future without losing their software investment. Organizations considering BYOD strategies must select Flexible - Typical packaged solutions will solve an immediate need, but often cause difficulties for organizations who then have to change their business processes to match the way the software works. There can also be problems down the road when business processes change but the software cannot adapt. A good solution should be flexible enough to adapt to an organization s existing processes and workflows at the outset, and adapt as change is required in the future. Intuitive - A solution should be intuitive to use, with ease of use extending from field personnel collecting data in retail stores through to managers and head office staff accessing real-time information and generating reports. Adaptable - A solution should be adaptable to support multiple business processes, so that additional software is not required to support additional business workflows. Accessible Data - Real-time data should be available in the field and at head office, with full access to all information in a structured format to support both operational and analytic reporting. cross-platform mobile solutions. The degree of flexibility between platforms should also be evaluated, such as whether any reprogramming or re-configuration is required to migrate from one device to the other. The Retail Execution Gap: From Loading Dock to POS 6

7 Proven Results Flowfinity provides an end-to-end mobile solution that meets all of the above criteria, with proven results from leading CPG manufacturers. Anheuser-Busch Bacardi U.S.A. H.J. Heinz Laura s Lean Beef McCormick & Co. Anheuser-Busch deployed Flowfinity Actions to conduct retail surveys across the U.S. America s leading brewer reduced the time taken to access survey data from weeks to 24 hours, improved the efficiency of conducting surveys, and streamlined surveys to create one version of the truth across retail channels nationwide. Bacardi previously contracted retail audits to a third-party service provider. With Flowfinity Actions, this leading spirits and wine producer brought the process in-house, enhancing their ability to capture store-level information, a key indicator of retail performance. With the automated system, the company reduced overall survey costs by 75% and improved the speed of accessing survey results to support decision-making. H.J. Heinz implemented Flowfinity Actions to improve the quality of information gathered about their brands in retail stores. A Flowfinity user since 2005, Heinz has significantly expanded its in-store intelligence, improved its ability to influence product performance at the shelf, and improved efficiency of operations. One retail business manager (RBM) reported saving two hours per day by using Flowfinity Actions on a smartphone instead of paper. Laura s Lean Beef armed field sales personnel with Flowfinity Actions on smartphones. The deployment was complete within a few weeks with immediate results: the number of sales calls per day doubled, response time for customer service issues was reduced to hours instead of days, and management gained quick insight into inventory, merchandising, and customer service at the store level. McCormick replaced paper-based audits with electronic audits on smartphones with Flowfinity Actions. The results were improved communication and feedback to brokers who handle merchandising, better visibility into operations, and the realization of a standardized audit process across the U.S. The Retail Execution Gap: From Loading Dock to POS 7

8 Conclusion Measuring retail execution is key to knowing how merchandising campaigns are executed, determining whether products are in fact positioned at the right time and place in front of consumers, and effectively communicating to brokers and merchandisers with data about their performance. But for many organizations, there is an information gap between the loading dock and POS. Process inefficiencies, high costs, and limitations of paper and clipboards have prevented many organizations from accessing this valuable shelf-level and in-store conditions information. With growing trends of mobile IT consumerization and rapid smartphone and tablet adoption, mobile solutions are now within reach of every CPG manufacturer, broker and retail audit services provider. About Flowfinity Flowfinity provides a proven, fully customizable solution for building enterprise mobile apps without programming. Since 2000, we have helped our customers empower their mobile workforces from sales and service to executives to access, report, and share information when and where they need to. We do this by making it easy and fast to implement systems that mobilize day-to-day business processes on tablets and smartphones. Flowfinity partners with key customers such as Anheuser-Busch, Bacardi, Heinz, Kellogg and McCormick, who rely on our software as the standard for automating critical business processes. Our robust mobile enterprise software solutions help companies across industries enhance productivity, engage management, and improve business insight through all areas of the organization. For more information, visit Flowfinity Wireless Inc West Hastings St. Vancouver, BC V6B 5K3 tel (604) The Retail Execution sales@flowfinity.com Gap: From twitter Dock web to POS 8