Merchandising, CPG KPIs & Reporting, Field Sales

Retail Execution: The Ultimate Guide

CPG companies need to put an emphasis on strong retail execution to stand out on the shelf.  Still, plenty of brands struggle to execute at retail, and as a result experience lost opportunities and less sales. In this post, we will go over everything you need to know to make sure your retail execution strategy is successful.

 

What is Retail Execution?

Retail execution refers to any and all actions a brand takes to get to the final step of the buyer’s journey: purchase. Your retail execution strategy is directly linked to your sales success.

For example, featured displays can lift CPG sales by an average of 193% when executed according to plan. BUT, despite the huge upside of these promotions — not to mention the investment they take from brands — less than half of all displays are executed as planned. This can be due to a variety of factors such as failed retailer compliance, overstocks or out-of-stocks, and poor planning.

 

The Different Aspects of Retail Execution

Merchandising

Merchandising takes into account how your products come across to consumers as they interact with them in a retail setting, and applies certain techniques to make those interactions as impactful as possible. It can consist of activities carried out by both marketing and sales, such as organizing shelves, setting up promotional displays, and tracking results of merchandising efforts. Having a strong understanding of merchandising, how to execute it, and how it impacts your business is essential to growth.

 

 

Retailer Negotiations

A huge part of successfully executing at retail has to do with negotiating with retailers for shelf space. Your retailer negotiations cover everything from winning shelf space, to determining order sizes, to pricing and promotions. As we will discuss later, maintaining strong retailer relationships is key to winning during negotiations.

 

Data Analytics

It is one thing to track data, and another to analyze it. Data analytics help brands take the data they are collecting at retail and turn it into useful information by analyzing it and spotting trends. Think of it this way: data are the different points on a graph. Analytics are the insights you get from studying that graph.

Once you’ve analyzed your data and gathered your insights, the next step is to plug that information into a cycle of continuous improvement that will help grow your brand. This cycle empowers brands to take the insights they have uncovered and use them in a planning stage to then take data-driven action in the field. These three components -- insights, planning, and action -- are what make up the cycle. Check out our post on the benefits of data-driven retail execution to learn more.



Retail Execution Best Practices

Below, we’ve listed five out of ten best practices for retail execution found in our best practices guide for building your retail presence. For more detailed descriptions and to access best practices six through ten, be sure to download the full best practices guide! You can also check out our retail execution webinar to go even further into depth when planning a retail execution strategy.

 

 

 

Understand Retailer Relationships

Retailers carry your product to the masses, but remember: these stores have a product all their own. That product is shelf space. This is why having a strong relationship with your retailers is a key component of successful retail execution. Strong relationships will give you leverage when negotiating for more shelf space.

Since retailers charge businesses based on the amount of space they want on the shelf, bringing in high returns is critical to your brand’s success. One important step to make before jumping into the shelf space competition is to seek out a patent attorney. If a product or its design is unique and not yet trademarked, it can be very easy for larger retailers to simply take ideas that work well in their locations. Be sure to cover your basis on the legal front first.

Another way to prepare for negotiations with retailers is to join GS1 US. This nonprofit company is a necessity for any businesses who want their product in retail locations because they supply part of the UPC found on unique products.

UPC codes are only one of the factors to take into consideration when considering the costs of

bringing a product to retail. Shipping, packaging, and returns (if the business plans on shouldering return costs) should all be considered before entering negotiations with a retailer. The more research and preparedness that suppliers bring to the table, the more leverage they will have against retailers in negotiations.

 

Build a Support Plan

For the same reason that bringing in high returns for retailers provides leverage in negotiations, having clear plans for how to create demand for the product is a surefire way to show retailers that they are not wasting their time on your product. This includes how the business will avoid stocking problems such as shortages or product returns. Setting up a system for regular maintenance of product displays and stocking helps to reassure retailers, and lets them know the business is committed to their outlet. A team of field representatives who act as merchandisers can ensure that every display looks exactly how it should.

Entrepreneur Bonnie Marcus, creator of “The Bonnie Marcus Collection” started out creating wedding stationery in her living room. Now her product is featured in large retailers such as Target and Bed Bath and Beyond. When asked what the critical steps are for getting a product into retail outlets, Marcus says “An important buyer probably receives hundreds of emails a day. We always recommend taking the time to send a handwritten thank you note, to develop a more personal relationship with the buyer.”

 

Create Killer Packaging

An often underestimated aspect of the retail process is product packaging. Deep considerations should be taken depending on the type of product a business is bringing to market as well as what would be most appealing to the audience.

Not only is packaging vital to attracting the attention of potential customers, but retailers also won’t want to stock a product with boring and plain packaging. A major contributor to consumer decision-making has to do with visuals. Create packaging that pops and seek outside opinions before sending it to the press.

 

Sparkling water brand Spindrift nailed their packaging with simple yet eye catching designs. 

 

Fight Hard for a Position

Once you’ve locked in a committed retailer, it’s time to nail down the details. Shelf placement can make-or-break your product and should be one of your first points of negotiation. Shelf-location, both horizontally and vertically, directly affect your product’s visibility and, in turn, your sales.

Another point to discuss is facings. According to a 2010 study which focuses on retail shelf allocation, the effect of vertical facings on sales is nearly double that of horizontal facings. By effectively placing the product in retail locations, businesses can further the already high returns that packaging and planning ahead have provided for the brand.

 

Capitalize on In-Store Promotion

While shelf location and packaging are extremely important, if you want to optimize your returns in retail channels, look to your in-store promotions.

Once the consumer is engaged, it’s time to seal the deal. Window posters, drink-cooler stickers, floor stickers, hanging signs, and in-store radio ads are great examples of effective retail merchandising. To learn more about creating a strong in-store promotion plan, we’ve put together a comprehensive post that covers a ton of different ideas for your demos and displays.

 

While retail outlets often limit the amount of promotional material a certain brand can put in-store, and will certainly ask for some form of compensation for the ability to do so, it is up to each individual business to decide if the extra sales from the materials will outweigh the costs.

 

Melissa Sonntag

Melissa is a recent graduate of Northeastern University and a content marketing specialist at Repsly, Inc. She is committed to applying her skills in order to bring value to Repsly readers and customers. Outside of work, Melissa enjoys practicing yoga, making music, and anything dog-related.

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