AFS Retail Execution Survey

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AFS Retail Execution Survey

AFS RETAIL EXECUTION SURVEY

Our Curiosity

• AFS believes that retail execution is critical for measuring and optimizing sales and trade promotions while in-flight. But does the market feel this way?

• AFS teamed with CGT to better understand how CGT readers are defining retail execution.

• We sponsored a similar survey 18 months ago and wanted to see if there was a change in some of the questions.


Survey Background

$0 to $250M28%

$1B to $3B12%

$250 to $500M17%

$3B and above25%

$500M to $1B18%

Company Size by Annual Revenue

Good representation of company size based on revenue.

Apparel / Footwear21%

Food & Beverage44%

Foodservice2%

Health and Beauty7%

Home & Garden21%

Other (please specify)

3%Over the Counter

(OTC)2%

Industries

Broad representation of industries, with the largest population in food & beverage.

Executive / General Management

12%

IT / Technology21%

Marketing / Business Development

12%

Operations / Logistics20%

Sales / Sales Management

21%

Sales Operations /

Execution14%

Roles

Majority of the roles fall into IT, sales and operations/logistics.


What did we find out?

Retail execution has progressed beyond basic functionality and focuses on increasing:

• Incremental lift in sales and ROI• In-store goods availability• Promotional effectiveness• Sales productivity


Achieved through a common thread

Information

Defining Retail Execution


Retail Execution is a Ubiquitous Concept

21%

7%

20%

2%

21%

29%

How does your organization define "retail execution?"

Competitive intelligencegatheringDigital merchandising

Direct store delivery /Van salesImage / AudiorecognitionOther (please specify)

Trade compliance

Overall, the retail execution is about getting the right product at the right place at the right time—but this is done differently at different companies.

Other (please specify)• Field Sales• All of the above• How things look at retail - many included,• Retail Execution includes multiple items, Sales, compliance

(survey's) and DSD• In-store execution of to improve brand presence• Right product right place right time• Retail sales• Displays, Proper signage and good display units• est optimal supply chain• In-store sensing, merchandising compliance, promotion

implementation and performance evaluation


7% 7%

0% 2% 4% 2% 0%

2% 4%

0%0%

0% 2%0%

7%9%

0%0%

2% 0%2%

2%0%

0%0%

0%0%

0%

4%

9%

0%0%

9%

0%0%

0%

16%

2%

5%

5%

0%0%

Apparel /Footwear

Food &Beverage

Foodservice Health andBeauty

Home &Garden

Other(pleasespecify)

Over theCounter

(OTC)

Trade compliance


Image / Audiorecognition

Direct store delivery /Van sales

Digital merchandising

Competitiveintelligence gathering

Retail Execution Differs by Industry

• Only foodservice and OTC have singular focus.

• Food & beverage, foodservice and health & beauty have strong focus on trade compliance.

• Small interest in digital merchandising and image/audio recognition.

Each industry has a unique perspective on how they define retail execution.


Retail Execution Differs by Company Size

• Companies with revenue of $500M or less continue to focus on transactional capabilities, such as trade compliance, but are experimenting with ways to sell more.

• Image/audio recognition is applicable to $500M and below.

• Companies with revenue of $500M+ have a more diversified view of retail execution due to their diverse routes to market on a global scale.13%

9%

4%

4%

13%

7%

0%

2%

18%

4%

9%

20%

0%

10%

20%

30%

40%

50%

60%

$500M and above $500M and below

Trade compliance


Image / Audio recognition

Direct store delivery / Vansales

Digital merchandising

Competitive intelligencegathering

Size, as well as needs, impacts how a company views retail execution.


Stage 0:exasperationmanual operations

Stage 2: efficiencyimproved field efficiency and rep productivity

Stage 1: enablemententry-level automation

Stage 3:effectivenessclosed-loop process improvement

Stage 4:excellenceretail activity optimization

A maturity model for transforming field operations and optimizing retail execution across all global markets

Are we doing things

Are we doing things right

Are we doing the right things

The Retail Execution Maturity Curve


Sales Productivity is the Top Goal

• Promotion compliance and competitive intelligence support closed-loop approach.

• Order and route optimization can lead to Retail Activity Optimization.

• Consumer acquisition is more important for emerging brands/companies.

• Evaluating shelf conditions are decreasing as a need as companies move away from transactional activities.

Competitive intelligence

4%

Customer acquisition

14% Evaluate shelf conditions 2%

Order and route optimization

7%Profitability

13%

Promotion compliance

13%

Sales productivity

47%

Data drives the goal of greater effectiveness and efficiencies.


Retail Execution Goal by Industry

2% 2% 0% 0% 0%0%

8%

6%

0% 0%0%

0%

0%

2% 0%

2%

2%

0%

2%2%

2%

6%

0% 2%

0%

0%

6%

2%6%

17%

25%

8%

Apparel /Footwear

Food & Beverage Health andBeauty

Home & Garden Over theCounter (OTC)

Sales productivity


Profitability

Order and route optimization

Evaluate shelf conditions



• Sales productivity is the most important goal for every industry but health & beauty and OTC.

• Health & beauty’s primary goal is consumer acquisition—maybe due to brand share. OTC’s major goal is order and route optimization.

• Apparel/Footwear doesn’t have promotion compliance as a goal.

Most industries are focusing on driving efficiencies and effectiveness to drive incremental lift.


Retail Execution Goals by Company Size

4% 0%2%

13%0%

2%7%

0%7% 5%

7% 5%

27%

20%


Sales productivity


Profitability

Order and routeoptimization

Evaluate shelf conditions



• For companies over $500M in revenue, there is more emphasis on sales productivity and order and route optimization.

• Whereas companies with $500M and below in revenue puts more emphasis on customer acquisition and none on competitive intelligence.

Regardless of size, information is required to reach your goals.


Basic Requirements Are Completed

T o p Cha lle ng e s June 2015 De c 2103 De c 2013 Ra nk ingCapturing store check / on-hands really fast 43% 37% 3Being able to access and combine data from other sources to present to the field representatives on their mobile devices in an effective way 36% 57% 1Keeping the field personnel up to date (push items, promotions, mkareting, pricing, sales information) 36% 33% 5Being able to highlight the important data / activities for field personnel to focus on 30% 30% 6

Getting meaningful information from the mobile devices back to HQ for effective decision making 23% 33% 4Having adequate controls to generate and track mandatory activities in the field 23% 27% 8The ability to modify / enhance the application when new needs arise 21% 43% 2Having the staff use consistently 18% 27% 9Mobile devices are not connected / cellular 14% 7% 10With all the things our field personnel do and all the data they collect, we still do not seem to know where the problems are in time 14% 30% 7Other 7% 7%

Product maturitySpeed and information is key

Data functionality is a more important requirement as it is critical to supporting the retail execution strategy and the goals. Additionally retail execution functionality is maturing.


Getting The Technology That Will Get You The Information You Need!


In progress50%

In the next 6 to 24 months

20%

In the next 2 to 5 years

9%

Not even on our roadmap

21%

Trade Activities with Retail Execution

5%2% 2% 4%

9%9%

0%2%

5%

2%

2%

4%

11%

2%

4%

4%

20%

5%

2%

9%

In progress In the next 6 to24 months

In the next 2 to 5years

Not even on ourroadmap

Sales

Operations / Logistics

Marketing / BusinessDevelopment

IT / Technology

Executive / GeneralManagement

50% have integration projects started and they are led by sales and operations.Though, IT is predominantly planning the projects scheduled in the next 6 to 24 months.


Food & Beverage is embracing integration

• Food & beverage is leading the way in kicking off retail execution projects.

• The majority of apparel/footwear is overwhelming not considering retail execution at this time—though they hope to increase sales productivity as a goal.

While food & beverage leads the way in adopting retail execution, most other industries indicate growing interests.

6%

30%

2% 4%9%

0%

0%

6%

0%2%

0%

0%

6%

9%

0%

2%

2%

2%

11%

2%

0%

0%

9%

0%

Apparel /Footwear

Food &Beverage

Foodservice Health andBeauty

Home &Garden

Over theCounter

(OTC)

Not even on our roadmap

In the next 6 to 24 months

In the next 2 to 5 years

In progress


Technologies for Retail Execution

• Retail execution continues to be the leading technology; but new technologies are being considered.

• Image recognition supports the speed and accuracy of a capturing information.

• GPS supports efficient execution and delivery of DSD. It also creates efficiencies in monitoring delivery routes.

By almost 70%, a retail execution platform is the technology that companies are considering the most. That’s slightly less than double for direct store delivery.


Other Functionality Do Companies Want

Ad d itio na l Functio na lity June 2015 De c 2103 De c 2013 Ra nk ingA flexible system that would allow us to more easily configure certain activities to certain sales teams / geographies / individuals / routes 52% 56% 2System that would allow a field representative to register that a promotion is fully in place at a particular retail location and have that kick-off relevant social media activity for that store and the consumers associated with that store 38% 67% 1A modular system that could deploy applicable capabilities to different sales and delivery roles in the field under one back-end management console for unified reporting, activity creation / tracking, etc. 35% 41% 3A flexible system that would allow different sales management to run their territory (define activities, tasks, define objectives, etc.) differently 23% 19% 6A system that would allow field reps to BYOD (use their own personal devices) 23% 22% 5Taking advantage of today's technology to capture and associate voice and video as part of the data capturing activity and analysis 19% NA NASystem that would allow your organization to procure the right hardware for the right role and still work the same with the back-end management console 12% 33% 4

The additional functionality that companies want have stayed consistent over time. The need for information continues to dominate when it comes to additional functionality.


Data Reporting Impacts Ability to Reach Goals

Nearly 50% are still using spreadsheets to analyze data. A profound effect in sending consolidated important data to sales people to help them be efficient and sell more. Having the right data at your fingertips, gives you ability to adapt quickly with greater accuracy from route management to trade performance.

I analyze it in Excel once per

week44%

I have a small report inside the Retail Execution

backend25%

I have complex dashboards

covering real time data from

the field and use it on a daily basis

31%

Without real-time data, sales’ ability to increase lift or make adjustments is limited.


Large Bakery Manufacturer

• A leading North American producer of packaged bakery goods.

• DSD / DMS solution manages their inventory with 5,000+ independent distributors.

• Information flows from distributors to the manufacturer about their inventory.

• Daily real-time, on-line access to sales and gross margin reports enables prompt operational adjustments.

• Ensures the distributors have adequate supply of the right product mix, minimizing returns of unsold goods.

Collecting and using information to supply the right product mix and meet retailer and foodservice customer needs.


Spin Master Increases Sales Effectiveness

• “In our fast-paced market, it’s easy to lose sight of activity taking place at store level. We needed a solution to give our team the ability to capture product performance at individual outlets and provide immediate insight to our corporate team, so when necessary, we can take appropriate actions.” – Dave Balkaran, Spin Master Director of Retail Operations and Customer Care

• Increased management visibility to what’s selling/what’s not and the ability to make immediate promotional plan adjustments.

• Improved store-level merchandising effectiveness.• Empowered merchandising team for greater confidence and

employee moral.• Immediate sharing of ideas with other merchandising reps for

increased display effectiveness.

Capturing and sharing real-time insights empowers sales to make better decisions

Managing Your Retail Execution Solution


Managing Your Retail Execution Solution

Internal team76%

Outsourced24%

I'm confident I have the correct

resources33%

I'm pretty sure we have the

right resources

31%

We know we need resources

with different

skills36%

Who Manages Your Retail Execution Solution?

Do you have the skill level to internally to manage?

Three-fourths the companies are managing retail solutions themselves, yet only 33% are confident they have the right resources.


Who Outsources and Why

18%

4%

7%

0%

16%

4%

2%

0%

18%

2%

15%

15%

Internal team Outsourced

Competitive intelligence gathering Digital merchandising

Direct store delivery / Van sales Image / Audio recognition

Other (please specify) Trade compliance

47%

9%

29%

15%

Internal team Outsourced


It appears that companies with $500M or less in revenue outsource are twice as likely than companies with $500+ in revenue. Trade compliance is the activities outsourced the most.


Most Prepared by Industry

• Although food & beverage has the most projects in progress they have concerns about their resources’ skills.

• Home & garden has a grasp on skills depending on the company.

• Apparel/footwear feels the least confident; but this industry has fewer projects planned.6%

2%

13%

13% 19%

15%0%

0%

2%

2%4%

2%

11% 6%

4%0%

0%

2%

I'm confident I havethe correctresources

I'm pretty sure wehave the right

resources

We know we needresources withdifferent skills

Over the Counter (OTC)

Home & Garden

Health and Beauty

Foodservice

Food & Beverage

Apparel / Footwear

Resources skills readiness vary by industry. The most confident is home & garden.


Perception of Skill Level by Role

• Key skills are knowing the full capabilities of the retail execution solution and most importantly, strong collaboration with the field teams.

• Overall sales and IT feels confident they have the right resources.

• Operations are more concerned about the skill level.

• Executives overwhelmingly don’t have as much confidence.

2%4%

7%7%

7%4%

2%

4%7%

4%

9%

7%18%

7%

11%

I'm confident I have thecorrect resources

I'm pretty sure we havethe right resources

We know we needresources with different

skills

Sales

Operations / Logistics

Marketing / BusinessDevelopment

IT / Technology

Executive / GeneralManagement

Varying degrees of confidence regarding skills based on function.


Suggestions on getting up to speed1. Inventory your team to evaluate their skill levels.

Decide to recruit and/or invest in building skills. 2. Develop a culture focused on continuous

improvement through on-going training.3. Develop metrics and KPIs to evaluate staff

adoption of new skills.4. Use information to decide if you need to adapt to

the impact of internal and external forces. 5. Work closely with your vendor partners to keep

up on new technologies and functionalities. If they are not meeting your needs, request your needs be added to the solution.

Takeaways


Starting out. Consider your next steps

1. People: Think about your resources’ skills and decide if you need to recruit and/or invest in training.

2. Processes: Consider the steps it will take to collect and analyze data and then sharing the insights.

3. Technology: Find a system that covers your needs of today and can grow with you when you are ready to look at new functionality to help you sell more.


You’re RE-savvy. Consider your next steps

1. People: Think about how you can enable your sales staff to be more efficient and effective in selling more. Decide on what the right roles/needs are to handle all your strategy.

2. Processes: Evaluate the steps you follow now to see how you can better empower the sales rep to increase their productivity to sell more.

3. Technology: Look for a platform that can cover all the roles and routes to market and enable you to manage while trade promotion is in-flight.


Actionable Insights Powers In-flight Visibility

• Speed to handle in-flight• Accuracy based on KPIs• Defined Corrective Actions


Retail Activity Optimization• Closed-loop approach• Information feeds into:

• Planning• Optimization• Post-event


Learn about the scope of Retail ExecutionDownload the full report from CGT site:

The Scope of Retail Execution

http://consumergoods.edgl.com/User-Registration/ModalUserSignIn.aspx?RedirectToPage=http://consumergoods.edgl.com/User-Registration/Downloads.aspx&ubctid=2&GUID=af9e8e5e-e2ae-4577-80cb-6461f0c55c6d&documentname=The%20Scope%20of%20Retail%20Execution&arurl=/research/The-Scope-of-Retail-Execution100274&documentID=100097

Date post:	28-Jul-2015
Category:	Data & Analytics
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AFS Retail Execution Survey

Data & Analytics