When was the last time you popped to the shops? Have you ever wondered what manages the eco-system that controls not only the price and promotions, but also volume of products in-store?
Whether you are a hardened FMCG evangelist or someone just out to enjoy a bit of retail therapy (or both!), the point of consumption in a shop or online is the critical moment a manufacturer or retailer hopes to capture your attention and close the deal.
As a consumer, you may not be aware of how much effort has gone into getting us this far, the orchestration that is partnered between multiple companies to get the right amount of stock, in the right store, at the right time, and the right price to ensure we purchase the goods we desire.
For retailers, it is a constant rat-race of shelf replenishment of products, out-of-stocks, new for old, promoted branding for non-promoted branding, constantly checking all pricing for all products are accurate according to their own terms and the agreements they have with the manufacturers supplying the goods.
The brand manufacturer has invested heavily to help get here. Manufacturers spend a significant portion of their total revenue to get their products through the supply chain and to the consumer at specific price points that encourage higher levels of consumption than normal. This movement of funds carried through organizations to drive in-store activity has been a highly challenging area to both control and validate ROI, highlighted by the fact that 92% of manufacturers felt they could do more with Point of Sale (POS) data collected from retailers.
Retail Execution software has been helping manufacturers get improved control and validation of the execution of negotiated activities for many years. Being able to run surveys, shelf audits, take orders and plan for routes and deliveries formed some of the fundamental requirements to enable retail execution. In the past ten years there have been advancements around optimizing these core areas, led by 68% of brand manufacturers feeling they lacked the appropriate technology to manage retail activities. This has driven solution enhancements including optimization of the store visit routes that Field Sales Representatives (FSR) take, how analytics are reported, key performance indicators and workflows which are all aimed at helping ensure the manufacturer gets the level of compliance expected.
percent of retail sales are lost due to poor RE practices
this loss equates to $3.7 million in revenue for retailers
The evolution and maturing of mobile technology have fast tracked new capabilities that were previously unattainable due to the effort required to efficiently record and track compliance across stores.
Auditing of shelf space is not an easy manual task, yet this is part of the daily process for FSR. The combination of mobile technology, higher speeds of data transmission and image recognition software has allowed technology to bring substantial efficiency and accuracy to the in-store auditing process. Tied in with image recognition, further optimization of route planning, technology is really starting to pull together some serious benefits.
In North America, the Image Recognition market is estimated to be around $428m USD, and these technologies are expected to grow from $1.8 billion in 2021 up to $.3.7 billion by 2025, at a Compound Annual Growth Rate (CAGR) of 21.7% during that forecast period. This is just one area of technology that will start to change the way in which store information can be collected more efficiently.
In the first article of this Retail Execution blog series, Andrew Banks provides an intro into the world of Retail Execution. Understand what it takes...