Fixing Order Mistakes at the Store Level. Introduction Cindy Sattler, President and CEO Joel Nelson,...
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Transcript of Fixing Order Mistakes at the Store Level. Introduction Cindy Sattler, President and CEO Joel Nelson,...
Fixing Order Mistakes at the Store Level
Introduction
• Cindy Sattler, President and CEO
• Joel Nelson, Vice President Business Development
• National Merchandising Service Organization (MSO) since 1962
• Reps in all 50 states are W2 employees
• Service all retail channels
• Associate member and Preferred Provider of the IHA
• Member of NARMS
What is an MSO? • 3rd party liaison between manufacturers and retailers
• Support product activity at retail to drive sales
• Extension of client’s team executing services at retail
• In-store resource to improve product performance and drive sales
Key Statistics Benefits of working with an MSO include*:• Improved retail compliance
– Resets implemented faster – Higher quality of initial planogram compliance– 7.8% category sales increase– 70% of all decisions are made at the shelf
• Only 1 in 4 displays use POP materials
• Getting new product to the shelf faster– 98% new product cut-ins vs. 60% without 3rd party support
* NARMS study
Key Statistics Impact of Out-Of-Stocks (OOS):
• Cost retailers/manufacturers $93 billion annually*
• Average OOS is 8%, studies show as high as 17.8%• Distribution voids impact additional 5-10 points • 1 in 5 consumers forego purchase due to OOS
• Retailers could increase sales 3.7% if OOS improved• OOS = leaving store with no purchase:
– Empty shelves or Locked item, no help available– Found help but could not locate item– Price/offer shelf did not match advertised price
*RIS News and IHL group published in Retailwire
Key Statistics Continued
New Item Introductions:
• Most POGs not implemented according to plan– Once set, drift from plan at rate of 10% per week
• 17% new items disappear within 8 wks of initial placement
• Less than 50% promotion execution reaches stores– OOS on promoted items averages 15%
• Compliance is largely unmonitored/unmeasured
Key Statistics Continued
Sales Lift of Endcaps
• Studies show 98% to 141% sales lift for endcap product with promotions pricing vs. items in regular shelf position at regular price.
How Is Product Supported At Retail?
• Reactive– Fixing order mistakes
• Proactive– Supporting the brand/product at retail
• Interactive– Education of retailer employees and/or consumers
Order Mistakes Consequences
• Poor product performance
• Loss of sales / designated floor space
• Mandatory RTV
• Added expense to vendor
• Negative impact on vendor/retailer relationship
How Is Product Supported At Retail? Reactive- Fixing order mistakes at the store level
Service Examples:
• Re-ticketing / Price Changes • Incorrect UPC
• Defective Merchandise • Packaging Issues
• Promotional / Branding Errors • Poor Sales Performance
How Is Product Supported At Retail? Reactive- Fixing order mistakes at the store level
Case study: Licensing Mistake
Issue: Logo tag used several months early
Risk: Lose logo license if not fixed within 10 days
Options: 1) Pull inventory and return to vendor2) Pull logo tag from inventory at store level
Results: Kept licenseKept inventory at retail
How Is Product Supported At Retail? Reactive- Fixing order mistakes at the store level
Case study: Trademark Infringement
Issue: Used trademark already registered
Risk: Lose lawsuit for trademark infringement
Options: 1) Pull inventory and return to vendor2) Cover trademark on all inventory at store level
Results: Minimized financial result of lawsuitKept inventory at retail
How Is Product Supported At Retail? Reactive- Fixing order mistakes at the store level
Case study: Packaging Failure
Issue: Packaging was breaking down at retail
Risk: Branding / Quality / Salability
Options: 1) Pull inventory and return to vendor2) Mark down product3) Fix / replace packaging of inventory at store level
Results: Improved packaging met branding standardsMaintained retail space and sold at full price
How Is Product Supported At Retail? Reactive- Fixing order mistakes at the store level
Case study: Instant Redeemable Coupon
Issue: Sales of select products down
Risk: Inventory Levels
Options: 1) Potential for product markdown 2) Affix / distribute coupon of inventory at store level
Results: Increased sales due to promotionMaintained retail space
How Is Product Supported At Retail? Proactive- Supporting brand / product at retail
Service Examples:
• Ongoing In-store Brand Support • Audits
• Promotion Sets / New Item Cut-ins • Restock
• Resets / Store Support • POP Materials
How Is Product Supported At Retail? Proactive- Supporting brand / product at retail
Case study: New Retailer Test
Issue: Supporting test to gain full chain distribution
Risk: Not gaining chain wide distribution
Options: 1) Monitor sales performance2) Work with retailer on suspected OOS3) Store visits to audit and eliminate OOS
Results: Eliminated OOSProvided retail intelligenceAchieved chain wide distribution
How Is Product Supported At Retail? Proactive- Supporting brand / product at retail
Case study: Driving sales through an endcap
Issue: # of stores that don’t set endcap on time
Risk: Loss of sales/promotions
Options: 1) Monitor sales performance2) Audit to ensure all endcaps are set, set if necessary
Results: All possible endcaps setReport provided for any endcaps not setIncreased sales
How Is Product Supported At Retail? Proactive- Supporting brand / product at retail
Case study: POP Placement
Issue: Differentiating product at retail
Risk: Effectiveness relative to other print media
Options: 1) Other print media than POP materials2) Differentiate product at shelf w/ POP materials
Results: Placed POP materials at 16,000+ locationsLearned that not all stores carried productEffective use of print media
How Is Product Supported At Retail? Interactive- Education of retailer employees and/or consumers
Service Examples:
• Product Knowledge training • Sampling/Demos
• Mystery Shopping • Suggestive Selling
• Store Placement Assistance • Order Recommendations
How Is Product Supported At Retail? Interactive- Education of retailer employees and/or consumers
Case study: Mystery Shop
Issue: Employee knowledge and service
Risk: Lack of in-store Brand support
Options: 1) Evaluate in-store support from sales data2) Use company personnel to observe in-store support3) Perform broader scope evaluation of in-store
support
Results: More comprehensive perspective on in-store supportIndependent perspective
How Is Product Supported At Retail? Interactive- Education of retailer employees and/or consumers
Case study: Brand ambassador
Issue: Fast growth company unable to support brand at retail
Risk: Loss of distribution
Options: 1) Make no changes and risk loss of distribution2) Hire and manage staff to support brand at retail3) Outsource and use services as needed
Results: Increased sales through store level insights Improved retailer relationshipsProtected distribution
How Is Product Supported At Retail? Interactive- Education of retailer employees and/or consumers
Case study: Seasonal product distribution
Issue: 2nd facing in another dept would improve sales
Risk: Not maximizing sales
Options: 1) Status quo2) Work with buyer to effect store level change3) Deploy store level solution to get 2nd facing
Results: 70% of stores got 2nd facing Sales increased
Summary
• Thank you!!
Cindy SattlerPresident and CEOLawrence Merchandising [email protected]: 763-383-5709 M: 952-693-5491
Joel NelsonVice President Business DevelopmentLawrence Merchandising [email protected]: 763-383-5715 M: 612-616-4752