Mastering the Art of Retail Execution: What Every CPG Manager Should Know
Retail Tech Insights | Thursday, February 01, 2024
This article provides an in-depth look at the essential skills and knowledge needed to become a successful retail execution manager, helping CPGs master the art of retail execution.
Fremont, CA: The frustration of finding out that one's favorite product is out of stock (OOS) or in the wrong place is something that all devoted shoppers have experienced. However, consumer packaged goods (CPG) corporations find it increasingly difficult to maintain their products' prominence as the competition to win at the shelf heats up. As such, retail execution has never been more crucial or difficult.
Meaning and Significance of Retail Execution
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The goal of retail execution is to guarantee that a consumer products manufacturer's overall brand strategy is effectively implemented at retail locations. Retail execution ensures CPG companies can fulfill their KPI targets by placing the right product on the right shelf at the right time.
Because customers make rash decisions at the point of sale, retail execution matters. Customers may decide not to purchase a product if it is out of stock, inconvenient to find, or if a competitor's product is more tempting due to a promotion.
Impressive KPIs and a three to five percent increase in sales in a single category might result from effective retail execution. On the other hand, inadequate retail execution can cost a company between one and five percent of sales annually or millions of dollars. To boost sales and prevent poor customer experiences that could harm the brand, a solid retail execution strategy is necessary.
What Store Parameters Should Be Measured?
Manufacturers that know their shelves create retail audit standards using a go-to-market approach focused on the customer. This well-defined structure specifies the best brands and suitable packages, the proper prices, and the target channels for every occasion.
Stock levels (shelf and back stock), product placement in-store (ambient vs. coolers, gondola vs. end caps, etc.), planogram compliance (shelf location, number of facings present, number of SKUs current, missing/inaccurate shelf tags), quality of in-store displays and execution of promotional materials, competitor adjacencies and activity, and pricing compliance are some of the general topics covered by a store audit task list.
Who Should Be in Charge of Your Retail Audits?
You get more control over your resources by sending out specialized sales teams to visit stores regularly throughout each territory. Because your teams will inevitably fight more for your brand, it also has a high "ownership index." However, it can be exceedingly expensive to coach and inspire these teams.
On the other hand, third-party merchandising service providers can assemble and develop a team. It can be difficult to assess success because the team's performance is judged differently than your internal framework.
Regardless of who manages and executes retail execution, at its most effective, it goes beyond auditing; in the end, it boosts revenue growth by considering consumer, shopper, and customer motivations.
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