3 Retail Execution Rules for the Next Normal
If 2020 was a Dickens novel about consumer goods, it might be called a tale of two categories: essential and non-essential. The former saw the better of times in which the belief in their products gave consumers hope. For the latter, it was, indeed, an “epoch of incredulity” with what seemed like no end.
Field sales reps for all types of goods found themselves either locked out of stores all together or with limited retail interactions. Those who remained in the middle of disruption were dealing with supply chain issues, unpredictable consumer behavior and increased pressure from competition. Now, amid what’s commonly becoming known as the “next normal,” retail execution (REX) is still in flux.
Steve Sigrist, VP of customer service at Newell Brands, says, “I continue to see developing gains in the collaborative planning space, and the pandemic impact often made the dialog absolutely necessary.”
Even with these challenges and likely some more bumps in the road ahead, CGs can still find sustained success. Read on to find out how, and the steps it’ll take to get there.
“To get it moving further forward, both sides should continue to be as transparent as possible about challenges, improvement opportunities, and where best practices are taking place across the industry.”
Regarding the last year, Sigrist also noted, in a previous interview with CGT, “We are wiser from what we’ve been through. We can leverage that experience base and become agile and creative in our approaches.”
For field reps and REX, the lessons learned can be translated into three main rules that will guide them in 2021.
#1. Be nimble and flexible to shift strategies quickly.
REX teams are still focused on growth, velocity, positive in-stock positions and closing the SKU gaps — all through the lens of agility now. Applying this attribute to teams, assortment, merchandising and promotions will allow for quicker response to market fluctuations.
“How do we continue to provide delicious, better-for-you options while recognizing overall shopping trips are down and basket-size is up?,” asks David Miller, chief sales officer for The New Primal, a specialty meat snacks and condiments manufacturer. “I'd contend that evolving and reacting to the many changes in consumer needs that were presented by COVID-19 are the keys to success in retail in 2021 and into the future.”
Creating products that consumers want, especially when helping them navigate a crisis, requires deep insight. Field teams are often first in line to see what’s changing, and given the right structure and tools, can identify areas of opportunity. For example, based on in-store data, a leading juice-maker in Canada introduced two new multipack products that were not originally in their 2020 roadmap to close the gap on growth and velocity caused by the pandemic.
Another way to uncover potential is through competitive intelligence. Retail is still on a rollercoaster ride of being open and closed. CGs can stay on level ground by reallocating teams more widely to gather information on overall trends in a category.
Greater field team coverage will generate more data and support more surveys. While a dedicated rep can still concentrate on their brand’s partner conversations, shelves and SKUs, other team members can assess what’s going on with competitive products in the same or complementary categories. If a rival is constantly out of stock, a brand could seize the chance to steal share by providing additional inventory or creating an entirely new product.
#2. Digitize. Digitize. Digitize.
Agility, insight and intelligence will be out of reach, however, without the right technology, i.e., data. Field reps are often equipped with retail execution platforms, but many struggle with getting the right information.
They must be armed with real-time data to respond effectively — especially to issues like the supply chain challenges seen in 2020 — while real-time communication directs teams to the right customers and initiatives.
Having out-of-stock info every day at the store level brings agility to a higher level. In addition, understanding visit frequency, creating dynamic routes and knowing the speed of in-store actions are critical, especially when capacity restrictions limit visit time.
Speaking at NRF 2021, The Hershey Company’s SVP and chief growth officer Kristen Riggs credited the ability to read consumer and retail sales quickly for enabling them to meet an unexpected demand for Hershey Milk 6-packs. In turn, the company rapidly increased production and inventory, and then leveraged layered retail data for where COVID-19 trends were highest.
The result was a 40% to 50% increase in those markets for the 6-pack, and it subsequently altered strategies to make merchandise more available. Hershey also changed its marketing creative from the traditional block party events to backyard themes, where they knew consumers were connecting in small groups with their families.
A REX platform that can integrate data comprehensively and meaningfully will provide field teams with insights into opportunities. It will also help with team standardization — shaken up by the pandemic pivot — and in-store program compliance across the field.
Overall, must-haves for REX tech stack features are a way to communicate priorities to teams and the ability to measure the execution of plans, plus the integration of three data types: activity data (visit frequency, total territory coverage, time in-store, etc.), observational data (stock levels, active promotions, etc.) and sales data.
#3. Serve retailers better, for better results.
For successful REX, no matter the times, the strength of the manufacturer/retailer can’t be overstated. And, speaking of data, trust and transparency remain critical to the relationship, but data sharing needs to improve.
COVID-19 has certainly reinforced the precept that neither can go it alone and given CGs a chance to re-evaluate their roles. Forrester urges brands get beyond a supplier mentality and evolve to be truer partners, but also believes providing the right customer experience is a joint responsibility.
The firm says, “Facilitating access to the same data sources, whether point of sale, supply chain, or loyalty, will help brands and retailers to conduct joint business planning using common language and shared KPIs to reach better decisions.”
Common pain points call for common solutions, and given all that’s changed over the last year, CGs and retailers should consider expanding their work together across the value chain. To that end, Cheryl Williams, CIO of Wakefern Food Corp and co-chair of the CGT/RIS Executive Council, notes on the CG/retail relationship: “These connections are typically founded around common goals for supply chain improvement, demand planning, product assortment, promotional strategies and merchandising by the individuals who lead those initiatives.”
She also points out that it’s time for a new approach, focusing, unsurprisingly, on technology. In her experience, CIOs from the two sides are often disconnected, yet she sees “endless” opportunity for solving mutual problems with technology.
The More Things Change, The More They Remain the Same
In a statement that sums up both the simplicity and complexity of REX, Williams adds, “There are a number of initiatives that clearly drive business benefit for both organizations but remain highly dependent on the right technology being in place.”
Despite plenty of news to the contrary, stores aren’t going away anytime soon. In fact, RIS News research shows that nearly 87% of all retail sales still have a store component. This means that agility, digitization and partnership must be top priorities for REX in 2021 and beyond, as CGs move forward even wiser from this experience. Solidifying these capabilities will also ensure they're better prepared for any future consumer behavior shifts as retail evolves into the post-pandemic environment.
