Secrets of REX Excellence From L'Oréal, Unilever, AB InBev, and More

A robust retail execution (REX) framework is essential to drive growth and profits for CG companies today. However, REX is a multifaceted ecosystem with many internal and external stakeholders trying to influence how the strategy is carried out. Coupled with this, CGs must remain agile in the face of amplifying consumer demands, ongoing supply chain disruption, and the impacts of the pandemic. In this complex environment, smart tech investments are the difference between success and failure, with leading companies leveraging machine learning, AI, automation, and predictive analytics to level-up their capabilities. Read on to learn how CGs like Unilever and L'Oreal are strengthening their REX frameworks, synergizing competing channels and influences, and ultimately delivering more seamless consumer experiences. In a sprawling, omnichannel landscape, it can be a struggle for brands to unify initiatives, plan correctly, and keep moving in the right direction. CGs must balance strategic investments in hiring the right field teams and the technology to support their efforts. AI, VR, and machine learning remain areas of immense potential for REX teams, but these opportunities have yet to be tapped to their full capabilities. Leading consumer goods companies have recognized this room for growth and are focusing their attention accordingly, working hard to gain visibility into operations and balance the many different facets at play among their teams. Data is playing an increasingly important role in building robust REX frameworks, with shipments, pricing, and promotions — and, of course, revenue — all playing into how teams approach their strategies. By deploying data-driven decisions across the process, CGs can become more agile, responsive, resilient, and ultimately better positioned to serve consumers. “CG companies are still navigating the ongoing effects of a global health crisis and supply chain disruptions, which continue to impact different geographic regions and industries at varying rates,” Cheryl Perkins, president and CEO of Innovationedge and former chief innovation officer of Kimberly-Clark, tells CGT. “To stay competitive and drive growth, CG companies need to create and capture value in their REX operations," she notes. "The best way to do this is by using a nimble set of technology solutions that seamlessly work together to improve performance and deliver competitive advantage. Having access to real-time data is essential to adapt quickly to these challenges and identify future trends that may impact the consumer experience.” Here are some steps to elevate your retail execution framework. #1 Leverage Data to Learn From Consumer Behaviors and Choices As illustrated in the chart above, CGs remain vulnerable to a host of different conditions, with difficulties with inventory forecasting and planning topping the list in several categories: products with a short shelf life (29%), demand variability and difficulty forecasting (24%), concentrated production (26%), and low inventory or just-in-time production (25%). An effective retail execution framework can help mitigate these risks. Store inventory, sales and shipment data, competitive presence, shelf health, depletion, and performance numbers are all critical parts of the retail execution puzzle; however, without action, this data can remain static and unusable. A robust framework should incorporate consumer insights and put them to work enterprise-wide. By empowering their retail partners to use a single, consolidated platform, CGs not only stand to bolster sales, but also gather and harvest essential data that can then be blended back into future retail execution strategies. Anheuser-Busch InBev has done just this, rolling out a mobile-accessible B2B digital platform in 16 countries. The BEES platform allows AB InBev partners to place orders for more than 500 brands, manage invoices, schedule deliveries, and earn rewards. The company has also added alternative payment methods, allowing the company to do business across multiple markets. Through this widespread adoption — the platform has a 90% take-up rate among AB InBev’s retailers — the company is able to deliver localized recommendations to retailers based on popular items and ensure shelves are stocked with the items consumers are responding to most. “As we start to roll out innovations with digital campaigns, as well as the in-market physical executions — what's working, what's not working — that feedback loop is quicker with the digital technology that we have today," said Andrew Murray, AB InBev global VP, revenue and analytics for BEES, in a conversation with CGT. "And as we learn in certain markets, you have data that can be shared very rapidly with another country around [what’s] working or not working for portfolios that have similar issues they’re trying to address, [such as] with innovation." #2 Empower Retail Partners with Intuitive Technologies With consumers back in stores, it’s crucial to ensure the products they want are on shelves when they get there. If they're not, they’ll turn to other retailers — or other brands. A robust retail execution strategy ensures this demand is met the majority of the time, and so to plug missing gaps, more CGs are equipping their retail partners with intuitive, frictionless technologies — many of which can be used on a mobile device — to ensure all bases are covered. Unilever, for example, has enhanced its tech capabilities as a way to manage its ice cream category. Currently, nearly 40% of Unilever’s retail partners are using its Ice Cream ERTM (electronic route-to-market) app, which tracks and orders stock, electronically transfers payments, and monitors browser offers and discounts. The results speak for themselves, with performance metrics on the up and a more responsive system now in play. “We’re seeing order values and frequency of purchase increase,” said Emma Carrera, director, digital selling at Unilever's retail partnerships segment, in a statement. “This is because retailers can purchase 24/7. And there is also a reduction in stores running out of stock. That reduction of out-of-stock, plus the possibility of pushing our core products more effectively, is seeing the average order value increase.” #3: Streamline Organizational Misalignment and Go For Real-Time Communication While in-store visits have historically served as the method for field representatives to gauge their in-store success accurately, the pandemic forced a reevaluation of this process, and a significant segment of retail execution processes was forced to go digital. Much like consumer buying habits, these communication methods must follow suit to remain in step with today’s modern operational strategy. CGs should consider a multichannel contact approach to retail execution and customer relationship management (CRM), one that combines the personal touch of face-to-face interaction with the efficiency and seamlessness of digital communication. Preventing communication breakdowns is absolutely critical when it comes to staying ahead of the REX curve. At times, however, there can be a disconnect between the technology and how store managers actually do their work. These problems are only exacerbated by field teams in stores with low signals or Wi-Fi dead spots, causing issues when attempting to connect to online communication platforms. When moving between an analog and a "face-to-face" world, it can be a struggle to align the priorities of suppliers and retailers in terms of scheduling, pricing, and issue resolution. CGs should invest time and effort into building an effective communication channel between stores and suppliers and ensuring they remain in step throughout the process. As part of their expansion project, craft beer manufacturer BrewDog opted to build field-friendly elements into their CRM platform. Where field reps had previously been dragged down by their purely online platform, new technology enabled them to add data while out and about, identify where colleagues need assistance, and cascade priorities and best practices throughout the business. This meant sales teams no longer spent hours manually filling out data logs in stores, Jerry Shedden, BrewDog’s head of on-trade, told CGT, greatly improving efficiency. Predictive analytics are also fueling agile decision-making and effective communication across the complicated REX ecosystem, and they can help leaders transform planning across their organizations by developing strategic plans that foster alignment across tightly integrated efforts and encourage cross-functional collaboration. “When used correctly, predictive analytics allows leaders to develop plans with confidence, knowing that their decisions are backed by trusted data,” Perkins notes. “Having access to live, accurate data can also increase agility, accelerate deployments, and make it easier to identify the prepackaged best practices based on specific functions or industries, which can streamline the approval process throughout organizations.” Many elements of retail execution will remain in-person, but in the same way that savvy CGs are interlocking sales and marketing channels across digital and analog worlds, an effective communication strategy can be built into CRMs, enabling representatives to speak with and learn from leaders and retail partners seamlessly, whether online or offline, at any time of the day. #4 Modernize Store Visits With AI & ML Technologies With manual store visits, data gathered is often outdated by the time field representatives arrive. Leveraging computer vision technology into smart store visits, reps can scan or capture shelf images to maximize operational efficiencies. Internet of Things (IoT) technology supports many of the frameworks behind these innovations, enabling further connectivity and data insights. “CG companies need to remain nimble and look for opportunities to improve the coordination and execution of their field teams by automating tasks and integrating AI to improve efficiency. Integrating the right software and technology solutions is the key to improving performance metrics, maximizing sales, and remaining competitive,” Perkins shares. Machine learning and AI represent untapped areas of potential for retail execution strategies. Leading CGs such as L’Oreal are ahead of this curve, recently announcing plans to build out their cloud-based retail execution strategy. Using sophisticated algorithms and artificial intelligence, the platform identifies the highest-value stores in the vicinity and directs representatives for visits using advanced routing technology. Once in-store, representatives focus on high-value displays and products which are highlighted on screen via an app. Insights gathered during this process are then fed back into the platform and used to inform future algorithmic decisions, increasing accuracy and driving value for the CGs who build their strategies around them. The ability to visualize what’s needed in store before arriving there gives sales reps a competitive edge. By taking the guesswork out of store visits, representatives have more time to focus on value-added tasks such as relationship building, identifying key growth trends, and building out business strategies. In fact, “winners” in commercial capabilities spend the majority of their time on these value-added activities. According to McKinsey, successful salesforce teams spend just 28% of their time on non-value-add activities, including store checking, pricing compliance, surveys, order taking, cash collection, drive time, and administrative tasks. Less successful sales force teams spend 41% of their time on these activities. Food company Mondelez is just one of the many businesses seeing this trend in action. On a recent earnings call, Martin Renaud, the brand's chief marketing and sales officer, revealed their investment in digitizing sales force teams to enable more precise customer targeting and delivery. Renaud said over 1 million Mondelez stores worldwide were now using the automated access in-store execution tool, freeing up their reps to engage 45% more time in "robust selling rather than administrative tasks." The investment has also increased revenue by 3% to 5% per sales goal, according to Renaud. For some time now, consumers have driven the conversation around retail execution innovation. Personalization, safety, product availability, convenience, and even a brand’s social responsibility are all consumer-led considerations for brands. Simply put, consumers will no longer settle for experiences that don’t keep them at the center. However, there are also now more opportunities than ever to get this balance right. By delving into consumer data, CG companies can segment and get granular about their retail execution strategy and address any gaps in the pipeline. Investing in the right tech integrations will also help teams improve performance metrics, maximize sales, and boost the bottom line. To up the REX ante, CGs must focus on harnessing insights directly from consumers and use these insights to take action and inform inventory planning as a foundation for an effective framework. CG should also be mindful to update legacy or siloed systems that cannot facilitate real-time data insights and are a hindrance to the level of interconnectivity, seamlessness, and efficiency that a modern retail execution strategy requires.

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