What is Modern Retail Execution?

What Is Modern Retail Execution?

Retail Execution (REX) is the business process designed to ensure that a Consumer Products company’s overall brand and promotional strategy is executed in store. It’s all about performing the right actions, in the right outlets, at the right time on every channel.

These in-store activities can include retail audits, promotional checks, asset merchandising, sales orders and proof-of-performance information collection. Due to the nature of these engagements, these activities are often carried out on a mobile device where offline data access is required.

But the real power of Retail Execution is not just about the activities executed in-store. The power comes from the real-time connected planning that takes place before the visit is scheduled. It’s about the intelligent insights that are used to drive Promotion Planning, Visit Planning, Route Scheduling, Agenda Building and Recommended Orders.

And of course, Retail Execution needs to be seamlessly integrated with your Trade Promotion Management processes to enable Trade Promotion Execution (TPX). As highlighted in the recent Aforza Spring 21 release webinar, this is the only way to ensure positive financial performance and ROI on your trade marketing spend.

Let’s think about this from the consumers’ perspective for a moment. As a widely discussed metric across the industry, research shows that about 70% of purchase decisions are made in-store and approximately 7 out of 10 store shoppers prefer to leave a store with a purchase in hand.

When shoppers visit retail stores, they intend to purchase something. However, they are easily influenced and may change their mind on a purchase if a product is out-of-stock (OOS), not located where expected, doesn’t have a compelling promotion or if promotional activity makes a competitor’s brand more appealing. These are all areas that Retail and Trade Promotion Execution should be addressing.

Research shows that brands lose up to 25% of sales annually due to poor Retail Execution practices and even more shocking is the aggregated $634 billion that retailers globally chalk up to out-of-stocks.

So why is Retail and Trade Promotion Execution so important to addressing these pitfalls? Well, it all starts with Compliance.

Consumer Goods companies spend billions of dollars on sophisticated strategies and promotions to influence shopper decisions in store. In fact, they typically spend 20% of their revenue on this. With the combined sales revenue of the top 50 Consumer Goods companies worldwide being more than one trillion dollars, that’s some serious investment in these activities.

You can have the best product, with the catchiest marketing and promotional offers, but if it’s not available in store at the time when the consumer wants it – it may as well not exist.

A recent survey revealed that whilst Consumer Goods companies perceive their promotional compliance rate for in-store displays at over 70%, the reality was that it was a mere 40%. It is critical to close this huge gap between what gets planned for at HQ and what actually takes place in the store.

Leading Consumer Products companies close the loop between Trade Promotion Planning and Retail Execution. They are able to dynamically plan, execute and improve Promotions in real-time. This is where the term Trade Promotion Execution (TPX) comes from, with field execution activity providing real-time visibility into both promotion compliance and resulting performance.

More than ever before, you need to make sure that the right products are in the right place at the right price and crucially at the right time in order to set a solid platform for growth. Unfortunately, too many Consumer Products companies do not have the connectivity they need with the shop floor to see the impact of their own, let alone competitor, promotions.

Aforza uniquely provides real-time visibility into Promotion effectiveness, uncovering performance that allows for in-flight Promotion tuning. Our integrated Trade Promotion Execution (TPX) platform allows you to:

• Plan: Define Promotions using Active Segmentation that are highly targeted and simulate customer reach to determine budget impact.

• Execute: Eliminate in-field execution errors by connecting Planning to Execution in real-time with Retail Audits, Compliance Checks, Competitor Surveys, Order Capture, Pricing and Validation. All available on the mobile and offline.

• Optimise: Have the financial progress and ROI of your Promotions at your fingertips, in real-time, allowing you to change tactics in-flight.

In order to provide real-time visibility into the compliance and effectiveness of a promotion, there are a number of tasks that need to be completed as part of a Retail Visit. These tasks should never be static, and best-in-class Consumer Goods companies leverage Active Segmentation, Configurable Audits and AI-driven Recommendations to dynamically assign and recommend tasks at the 1:1 account level.

In Aforza’s Spring 21 release, real-time visit templates were released for the mobile application based on active customer segmentation rules. Whenever a new visit is created, the tasks, duration, and notes will be automatically defined from the most relevant visit template. Visit and task recommendations, that leverage historical insights, are also displayed in the agenda builder when adding visits to the calendar.

This framework ensures that the correct compliance checks are in place to ensure the right products are in the right place at the right price, with the correct promotions running and via the right channel.

To ensure this compliance, a typical Retail Store Audit would cover:

• Availability and Stock Levels (both shelf stock and back stock)

• In-store Location of Products (shelf, gondola, fridge, standalone display)

• Promotion and Pricing compliance

• Agreed Planogram Compliance (shelf location, number of facings, number of SKUs, missing/inaccurate shelf tags)

• Competitor Placement, Promotions and Activity

• Quality of In-store Display and Promotional Materials

• Retail Order (to replenish stock immediately)

 Aforza supports configurable audit types that make it extremely fast and flexible to define audit processes that are unique to specific account and market segments.

Even today, many Consumer Products companies still rely on manual methods and outdated legacy systems for Retail Execution activities, which return unreliable and error-riddled data. The majority fail to connect planning to execution in real-time which breaks the feedback loop for promotional compliance and a positive trade promotion ROI.

Forward-thinking companies are looking to the cloud to digitally transform, connecting planning to execution in real-time. At Aforza, we don’t talk about Trade Promotion Management and Retail Execution in isolation. We deliver Trade Promotion Execution (TPX) which brings everything together in one connected business platform.