C U S T O M R E S E A R C H b y k a r a r o m a n o w

1 6 cgt | june 2015 | consumergoods.com consumergoods.com | june 2015 | cgt 1 7

Retail execution has quietly evolved into one of the most talked-about initiatives for consumer goods (CG) companies in the last few years. For many, it is an off-shoot of a TPM initiative, and for others it is focused more on sales force effectiveness. Buoyed by the advances in mobile technology and consumer interac-tion, however, it has caught the attention and the pocketbooks of executives trying to stay ahead of the competition. This month, CGT partners with AFS Technologies to understand which aspects of retail execution are being adopted, what the challenges are, and how technology is helping. While there are predictable trends by company size, we found an initiative that seems to encompass many processes and lacks a defined focus.

Even the definition of retail execution lacks consensus. While almost one-third of respondents define it as trade com-pliance, followed by competitive intelligence gathering and DSD, almost as many couldn’t fit their definition into one of our proposed descriptions. The primary goal, however, for companies of all sizes is sales productivity.

This is also where the challenges in current implementations occur: 43 percent struggle to capture data quickly, while over one-third reported challenges accessing data from multiple sources and presenting to sales in an effective way and keep-ing field personnel up to date. Thirty percent also struggle to highlight important activities to focus on for field sales. When asked what additional functionality would be most important, over half wanted a flexible system that is easily configurable by variables including sales team and geography.

Technology is definitely playing a role in addressing many concerns, but there are discrepancies by company size. Larger companies are ahead of their smaller peers in regards to inte-grating trade activities with retail execution. Larger companies are also spending more of their IT budget on retail execution solutions, with 43 percent spending over 3 percent compared to 35 percent of the overall population; conversely, 80 percent of companies under $250M are spending only 1 percent to 2 percent, compared to 65 percent of the overall population. Many companies are looking to retail execution platforms to support their goals; the platforms will be managed internally by 76 percent of respondents and that number jumps to 93 percent for larger companies. Data gathered in the field is still managed in Excel for 44 percent of companies, with less than one-third leveraging dashboards with real-time data. As retail execution continues to evolve and use cases mature, we expect adoption rates to grow as the industry adopts a more unified view of how technology can be leveraged to improve sales effectiveness.

The Scope of Retail ExecutionLack of cohesive Definition but certainty in Driving saLes ProDuctivity

expert perspective By Joe Bellini, Chief Executive Officer, AFS Technologies

Real-Time Actionable Insights: Finding Time to Create the Perfect Store

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full research report.

What is the primary goal of your retail execution initiative?

Sales productivity

Customer acquisition

Profitability

Order/route optimization

Promotion compliance

47%

15%

13%

7%

13%

Competitive intelligence

Evaluate shelf conditions

4%

1%

47

15

13

13

7

4

1

0 10 20 30 40 50

Sales productivity

Customer acquisition

Profitability

Order/route optimization

Promotion compliance

47%

15%

13%

7%

13%

Competitive intelligence

Evaluate shelf conditions

4%

1%

47

15

13

13

7

4

1

0 10 20 30 40 50

How is data gathered in the field managed?

What technologies are you considering to support retail execution goals? Multiple responses permitted

Millions of dollars are spent annually to shape the consumer through trade promotions and other incentives. however, many manufactur-ers have found that execution at the shelf is not aligning to their plans and they are looking for ways to achieve the perfect store with a retail execution strategy.

the biggest challenge with achieving the perfect store is time. it takes time for sales reps to manually capture data through activities such as shelf and planogram audits, distribu-tion checks, etc. ironically those activities take time away from value-added activities such as building relationships with store management, selling-in new promotions and gaining share of shelf and volume. even after the data is col-lected, time is required to analyze and confirm compliancy.

how do you accomplish more in a short amount of time? technology is playing a role in optimizing in-store processes and maximizing rep efficiency while reducing latency and inac-curacies — by creating actionable insights.

for example, a beverage manufacturer found it now takes less than one minute to com-plete its audit activities using leading-edge technologies that capture, analyze and score store conditions; then assigns the appropriate response task. With the time it saved, each sales person can invest 60 percent more time in selling.

actionable insights eliminates the latency of post mortem analysis by driving opportunis-tic and corrective action while the rep is still in the store. by adding predictive analytics to the mix, you have a better sense of the lift you should expect. the results are efficiency, ac-curacy and the right focus on the highest value activities to increase market share, identify and correct any discovered performance gaps and increase revenue.

Retail execution platform

Direct store delivery

Image recognition GPS

In progress

In the next 6 to 24 months

Not even on our roadmapNot even on our roadmap

In the next 2 to 5 years

020

4060

80100

21%

20%

9%

50%

FOR COMPAnIES OVER $3 BIllIOn

are already integrating these activities.

71%a

full

Analyzed in excel weekly44%

Complex dashboards using real time data used daily31%

Small report inside retail execution back end25%

1

2

3

4

5

OTHER

There is nO consensus definition for retail execution.

In fact, 21% chose “other” rather than the 5 most common definitions.

When do you plan to integrate trade activities with retail execution?

For companies over $3 billion, sales productivity was cited as the primary goal by

57%

58% of companies under $500M are using excel

while

57%of companies over $3B have complex dash-boards.

23%27%37%69%

Consumer Goods Technology

May 2015

1. What is your primary industry?

Primary Industry %

Food & Beverage 44%

Apparel / Footwear 21%

Home & Garden 21%

Health and Beauty 7%

Foodservice 2%

Over the Counter (OTC) 2%

Other 4%

44%

21% 21%

7%

2% 2% 4%

Food & Beverage

Apparel / Footwear

Home & Garden

Health and Beauty

Foodservice

Over the Counter (OTC)

Other

2. Size of company by annual revenue:

Size of company %

$0 to $250M 28%

$250 to $500M 18%

$500M to $1B 18%

$1B to $3B 12%

$3B and above 25%

28%

18% 18%

12%

25%

$0 to $250M

$250 to $500M

$500M to $1B

$1B to $3B

$3B and above

3. What geographic markets do you cover? Multiple responses permitted.

Geographic markets %

North America 67%

Global 33%

Latin America 14%

Asia Pacific 12%

Europe 11%

Middle East and Africa 7%

67%

33%

14% 12% 11%

7%

North America

Global

Latin America

Asia Pacific

Europe

Middle East and Africa

4. What is your current role?

Current role %

IT / Technology 21%

Sales / Sales Management 21%

Operations / Logistics 19%

Sales Operations / Execution 14%

Executive / General Management 12%

Marketing / Business Development 12%

21% 21% 19%

14% 12% 12%

IT / Technology

Sales / Sales Management

Operations / Logistics

Sales Operations / Execution

Executive / General Management

Marketing / Business Development

5. How does your organization define "retail execution"?

Define retail execution %

Trade compliance 29%

Competitive intelligence gathering 21%

Direct store delivery / Van sales 20%

Digital merchandising 7%

Image / Audio recognition 2%

Other 21%

29%

21% 20%

7%

2%

21%

Trade compliance

Competitive intelligence gathering

Direct store delivery / Van sales

Digital merchandising

Image / Audio recognition

Other

6. What is the primary goal of your Retail Execution initiative?

Primary goal %

Sales productivity 47%

Customer acquisition 15%

Profitability 13%

Promotion compliance 13%

Order and route optimization 7%

Competitive intelligence 4%

Evaluate shelf conditions 2%

47%

15% 13% 13%

7%

4% 2%

Sales productivity

Customer acquisition

Profitability

Promotion compliance

Order and route optimization

Competitive intelligence

Evaluate shelf conditions

7. When do you plan to integrate trade activities with retail execution?

Integrate trade activities %

Not even on our roadmap 21%

In progress 50%

In the next 6 to 24 months 20%

In the next 2 to 5 years 9%

21%

50%

20% 9%

Not even on our roadmap

In progress

In the next 6 to 24 months

In the next 2 to 5 years

8. What are your top challenges with your current retail execution solution?

Multiple responses permitted.

Top challenges %

Capturing store check / on-hands really fast 43%

Being able to access and combine data from other sources to present to the

field representatives on their mobile devices in an effective way36%

Keeping the field personnel up to date (push items, promotions, marketing,

pricing, sales information)36%

Being able to highlight the important data / activities for field personnel to

focus on 30%

Getting meaningful information from the mobile devices back to HQ for

effective decision making23%

Having adequate controls to generate and track mandatory activities in the

field23%

The ability to modify / enhance the application when new needs arise 21%

Having the staff use it consistently 18%

Mobile devices are not connected / cellular 14%

With 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 time14%

Other 7%

43%

36% 36%

30%

23% 23% 21%

18%

14% 14%

7%

Capturing store check / on-hands really fast

Being able to access and combine data from other sources

Keeping the field personnel up to date

Being able to highlight the important data / activities

Getting meaningful information from the mobile devices back to HQ

Having adequate controls

The ability to modify / enhance the application

Having the staff use it consistently

Mobile devices are not connected / cellular

We still do not seem to know where the problems are in time

Other

9. What additional functionalities would be most important to you beyond what you have chosen above?

Multiple responses permitted.

Additional functionalities %

A flexible system that would allow us to more easily configure certain

activities to certain sales teams / geographies / individuals / routes52%

System 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%

A 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%

A flexible system that would allow different sales management to run their

territory (define activities, tasks, define objectives, etc.) differently23%

A system that would allow field reps to BYOD (use their own personal

devices)23%

Taking advantage of today's technology to capture and associate voice and

video as part of the data capturing activity and analysis19%

System that would allow your organization to procure the right hardware for

the right role and still work the same with the back-end management console12%

52%

38% 35%

23% 23% 19%

12%

A flexible system that would allow us to more easily configure certain activities

Allow a field representative to register that a promotion is fully in place

A modular system that could deploy applicable capabilities to different sales and delivery roles

A flexible system that would allow different sales management to run their territory differently

A system that would allow field reps to BYOD

Taking advantage of today's technology to capture and associate voice and video

System that would allow your organization to procure the right hardware for the right role

10. What percentage of your IT budget are you investing in your retail execution solution?

Percentage %

1 to 2% 65%

3 to 5% 20%

More than 5% 15%

11. What technologies are you considering to support your retail execution goals? Multiple responses permitted.

Technologies %

Retail execution platform 69%

Direct store delivery 37%

Image recognition 27%

GPS 23%

65%

20% 15%

1 to 2%

3 to 5%

More than 5%

69%

37%

27% 23%

Retail execution platform

Direct store delivery

Image recognition

GPS

12. Who manages (or will manage if future initiative) your retail execution solution?

Manages %

Internal team 76%

Outsourced 24%

13. Do you currently have the appropriate skill level internally to manage your retail execution solution?

Appropriate skill level %

We know we need resources with different skills 36%

I'm confident I have the correct resources 33%

I'm pretty sure we have the right resources 31%

76%

24% Internal team

Outsourced

36%

33%

31%

We know we need resources with different skills

I'm confident I have the correct resources

I'm pretty sure we have the right resources

14. How is data gathered in the field managed?

Data managed %

I analyze it in Excel once per week 44%

I have complex dashboards covering real time data from the field and use it

on a daily basis31%

I have a small report inside the Retail Execution backend 25%

44%

31%

25%

I analyze it in Excel once per week

I have complex dashboards

I have a small report inside