Consumer goods and food retail field sales teams spend more time analyzing than they do fixing – according to research by McKinsey & Co. Project Manager, Tom Coe, sets out the issues and potential solutions.
Consumer goods organizations and food retailers have been sold many analytical black boxes. Simply plug in a system, and it will produce a tidal wave of answers and solutions for your business. The reality is quite different. Many companies fail to connect their analytics to action, resulting in missed value.
Merchandising teams were amongst the first constituency of users in consumer goods food retail to adopt a data-driven philosophy, but with this comes unique issues. An article by McKinsey & Co. illustrates some of these problems well. They found that merchandisers spent “approximately two-thirds of their time gathering data…and only one-third of their time working on critical strategy and analytics or insights”. This shows that merchandisers are buying into the principle of using analytics to create value, but the cumbersome groundwork to produce these insights is a constraint on effectiveness.
The impact is that merchandisers are unable to maximize the potential sales value that they could have delivered. Instead, there is a focus on the number of store visits, which can be arbitrarily chosen. The result could be a missed replenishment issue on a key SKU within a major retailer’s supermarket during a peak-trading period because of a lack of visibility on the issue. Merchandisers are also faced with the challenge of extracting valuable insights from the unprecedented level of granular data that is available to them. It is easy to overlook the subtle meaning of your sales data if there is simply too much noise.
The issue around merchandising is one that many retail field sales teams struggle with. Yet the aspiration to find a solution to support them in being more effective in their roles is commonplace. This challenge is only being compounded as seismic shifts in the food-retail space come to fruition due to the Covid-19 pandemic – in December, Kantar data showed online shopping accounted for 12.6% of all sales (up from 7.4% in 2019) with the majority of these online orders being fulfilled from store.
At Retail Insight, we are experts in store operations and execution, and our sole focus is on creating real value from actionable insight. We take a scalpel to the challenge rather than a blunt axe. Within merchandising, we have access to huge sales and inventory data sets and this creates endless opportunities to prioritize action to maximize sales and profitability, as well as providing a chance to build relationships and trust with in-store teams through the power of the data story. Merchandising should not just be about hitting a store visit quota, it should be about taking the right action on the right item in the right store.
Our field sales solutions are currently live with some of the biggest consumer goods companies in the world and operate by taking sales data and then instantly producing insights on distribution, availability, promotional effectiveness, and much more whilst evaluating the full return on investment on your retail field sales resource. These insights are not just for store intervention but also delivered to head office teams. They are designed to be easy to use, with full offline access and around-the-clock support. Customers commonly enjoy +10x returns on investment and significant sales uplift.
If your merchandising routines suffer from the same issues identified by McKinsey, resulting in suboptimal allocation of field resources, and lack visibility of store execution issues, then there is another way.