Through a special arrangement, what follows is an excerpt of a current article from CPGmatters, a monthly e-zine, presented here for discussion.
Sophisticated shopper insights, automated planograms, segmentation, targeting and shopper media have the potential to revolutionize the way categories are managed and products promoted. But these advances in marketing method are frequently stymied by in-store implementation breakdowns, experts say.
"The absence of in-store implementation practice is like an elephant in your stores. Nobody likes to admit it's there, but it is absolutely stomping on your category and promotional plans," said Warren Dawson, corporate development officer for Retail Tactics.
Mr. Dawson spoke at the recent Category Management Conference as part of a panel that included executives from Nestle Purina, Procter & Gamble, Retail Tactics and VSN Strategies. They are members of the ISI Sharegroup that is devoted to identifying and solving in-store implementation challenges.
"Our analysts work so hard to assess and analyze the right business problems and make sound decisions. Then they find only 30 percent of the work actually gets implemented," said Brad Anderson, director of the Strategic Selling Team at Nestle Purina.
"There is just way too much complexity and too much work for the present process," he added. "This is shameful and painful! The goal should be to reduce the workload on the analysts and know that the work will get done."
The conference was produced by the Institute for International Research (IIR), and supported by Association for Category Development Professionals (CPG CatNet) and CPGmatters, among others.
Shelf space allocation, assortment, promotions, pricing, and in-store media activities all revolve around the effectiveness and efficiency of in-store implementation. ISI Sharegroup members advocate a "Plan-Do-Measure" approach to in-store implementation that would ensure effectiveness and confirm performance by establishing systematic, continuous processes for maintaining shelf sets and monitoring their conditions.
"If we can't positively answer the questions: 'Did it happen?,' 'When did it happen?', 'What did it cost to make it happen?' and 'What was the result when it happened?' every day, routinely, and systematically, then our programs won't be fully effective," said Mr. Dawson.
JP Brackman, global presence manager for P&G, explained that by putting the right tools and practices in place, a broad in-store implementation initiative will have its first dramatic and rapid impact on planogram compliance, an area where effectiveness is poor and complexity is growing fast.
He added, "If we don't do this, the detail will bury us. Retailers with 11,000 stores already have automated planogram software."
With the industry facing a ramp-up in implementation challenges due to an increase in store-level planning, promotional segmentation, and shopper marketing, the ISI Sharegroup is targeting compliance as a fundamental capability. The group is preparing to release a working paper by year-end that outlines the cost to the industry of poor in-store compliance and defines areas where new best practices are needed.
"Simply throwing more labor dollars at the problem is not the answer," Mr. Dawson said. "Our industry must adopt a 'Plan-Do-Measure' mentality surrounding in-store implementation - and do it soon - if we want to see real benefits from our new, sophisticated planning tools."
Discussion Questions: What hurdles are holding back in-store implementation successes? What best practices should ISI Sharegroup's 'Plan-Do-Measure' approach to in-store implementation include?