Execution No Longer Just 'Send It and Hope'

As brands have ramped up shopper marketing research to fine-tune their in-store campaigns over the past few years, they have become more exacting about downstream retail execution -- and more exact in tallying compliance and performance.Execution companies say they're well aware of these shifts in emphasis and tone. "Since there's more money being spent on shopper insights, there's an expectation that the execution is going to have to be at a higher level," says Kevin Lee, vice president at Footprint Retail Services, Lisle, Ill. "They're not just accepting that lower level of execution. They've put all that money on the front end. They're willing to put money at the back end to make sure the execution works."Lee says retailers now respect the brands' shopper research: "The brands are saying to retailers, 'This is what's going to help your sell-through.' They are being very upfront and aggressive in their research. [Retailers] are allowing brands at the table earlier and more often because of the investment they're putting in there."The chains are also becoming more sophisticated in their own research, says Rebecca MacKay, vice president of sales and marketing for Dairy Management Inc., Rosemont, Ill., a nonprofit that represents U.S. dairy farmers. "Retailers are doing a better job understanding what they need to do to understand shoppers," she says. "That's one of the biggest changes we've seen -- retailers' overall savviness about their shoppers. It's not all about discounts. There are other ways to differentiate your store and its offerings. You'll see more of that as we look to the next couple of years."Retailers are motivated to work with brands because they see the potential for total category sales to grow along with individual brands' own market share, says Jon Kramer, chief marketing officer for RockTenn, Winston-Salem, N.C. "That's the promise of shopper marketing," he says. "The technology is moving so quickly, and the insights being generated are so new and so unique, that's it's like a whole other industry. How a smartphone is going to affect your shopping behavior is changing so quickly, it's a riot. Eighteen months from now, I'll bet my last nickel it's a whole different conversation. It's the wild, wild West -- unlike anything we've ever seen."Kramer sees retailers driving the transformational dynamic, led by chains like Walmart, Supervalu, Safeway and Kroger, with their calendars of merchandising events driven by color palettes and themes that operate store-wide. "Walmart is doing a really good job of creating a total-store solution around specific drive periods," he says. "They've identified high-opportunity seasonality and brought in certain brands and categories to help support that. Shopper marketing 'overlays' become how brands can add value to those activities, depending on what they can deliver."This rapidly changing landscape is mirrored in brands' own internal shifts in organizational structure and day-to-day operations. Denver-based Crocs, for example, created a brand new retail marketing department in early 2009, deploying a full-time field team supplemented by third-party agencies. "The company has always believed in shopper marketing but didn't really put into place the strategy to execute," says Michael Martin, director, retail marketing. "We made a tactical decision that, given the experience the consumer must have with our packaging and product, if we don't have a team out there ensuring our presentation, we're never going to be able to grow."Unlike many shoe brands, he adds, "Our stuff is hung up; it's physically out on the floor. If you don't have a team of people constantly monitoring the marketplace and developing a relationship with retailers, oftentimes you find your goods are out in the back."Third-Party Support Third-party companies say they're working with brands to ensure that their execution teams are tested and ready. Strat Mar, Port Chester, N.Y., designs an online training module for every project that each rep has to watch, says CEO Ethan Charas. "We can track every person who watched the module, when, and how many times," he says. "Then they have to pass a test. Until they pass the test, they're not given the assignment. Our quality of work has gone up dramatically because we can make sure the person who's doing the job is far more prepared."Spin Master, Toronto, uses in-store representatives who are all employees of the organization, turning to third-party vendors only during the busy holiday season, says Dave Balkaran, director, retail operations and consumer care. In-store reps carry mobile devices loaded with a customized software tool that gives them access to field information and product information. This enables them to communicate-back metrics like price points, out-of-stocks and voids. "We find employees to be a lot more valuable to us because of their vested interest in the corporation," Balkaran says. "All our reps have the mobile data package. As an organization, we structure our groups in smaller teams and do regular conference calls. It's all about keeping them communicated."Bringing in the Brand Brands are also making an effort to communicate with the execution staff earlier in the process. Dairy Management Inc., which has been working with Kraft Foods and Dannon to reinvent the dairy aisle based on shopper-centric research, sees a strong need for alignment across corporate departments. "Early on in the process, you have to have senior-level representatives, not only from store operations, but category management, store design, business analytics, customer insights, [and] brand managers within retailers," MacKay says. "All of those people need to be on the same page early on, and collectively define what success is -- which is different for each of those stakeholders."The Crocs execution team is brought into shopper marketing planning "fairly early in the process" to make sure they keep it real and simple when it comes to campaign components, Martin says. "We get great feedback from our field team, which tells us what works and what doesn't, right down to, 'That screw doesn't work in that hole, and here's why,' " he says. "If there's an opportunity to either obtain space or premium space, or expand our distribution, they're empowered to be able to go up the flagpole."Spin Master works hard to keep its various pieces -- field team, account team, sales and marketing -- all on the same page with regard to execution, Balkaran says. "It's extremely important to have the account teams really vested in the field organization, not only from the account manager's perspective but from the executive perspective," he says. "Sales needs to support the field management team to make sure they're sharing what's going on. We consider the field team the 'eyes and ears' at retail."E. & J. Gallo Winery, Modesto, Calif., has moved its company-wide business planning processes earlier in the year to make sure execution teams are well-versed in the end result and have plenty of time for input on issues like retail execution partners, says Jeff Stachelek, former director of sales and marketing solutions. "The bar has been raised with data, qualitative and quantitative," he says. "We're getting brought in to have those discussions on who our partners should be, not only on the sales side but the support side. Shopper marketing is asking for our help sooner."Clients are asking Baesman, Hilliard, Ohio, to create prototypes of displays they're trying for the first time to make sure the end result matches their vision, says Dave Kirkman, vice president, operations. "We create the entire product as a one-off prototype and make sure that's what they intended," he says. "How long does it take? How easy is it to craft and ship?"StratMar would like to be brought into the process earlier than clients often do, Charas says. "One of my pet peeves is that we're still not brought in early enough," he says. "At the end of the day, we're experts about what happens on the retail floor. Too often, larger plans are already set. They give it to us and say we need to work with the existing plans. We'll go back to the manufacturer and say, 'Can we change this and this and this, because this part's really not retail-responsive.' "On the back end, Crocs tracks racks built, square footage gained, and sales driven, monthly and quarterly. It also trains execution teams to make sure that store personnel know they're keeping tabs -- but in the nicest possible way, Martin says. "We want to make sure they know, in a very positive way, that we're checking up on them. We don't want them to feel like we're busting them," he says. "The people we hire are the kind of people you want to be around, who make you laugh. Retail can be a drag for store personnel. If they see a friendly face who remembers their name, and gives them something of value, or a sense of empathy and respect, that goes a long way."A desire to see photographs of every display built or deployed has given way to spot-checking, Charas says. "They say, 'Give us this photograph, this photograph, and this photograph. We'll capture them all, and the client will say, '192, 623 and 418.' We don't know which stores it's going to be ahead of time."However, no amount of measurement will improve execution if the supply chains for brands -- and retailers -- aren't set up the right way, cautions Paul Murphy, national director of retail sales for Menasha, Neenah, Wis. "They were set up to move product from point A to point B," he says. "You don't need sophisticated technology to improve execution. You just need to use the technology that's there."Using Data as a Guide Kirkman says Baesman's clients increasingly want to revise campaigns on the fly after data starts rolling in about a program's performance. "We start getting information about other things they want to distribute, seven to 10 days [after launch]," he says. "We'll get a second and third kind of add-on, if you will, to the promotional graphics after the initial distribution has been done."Crossmark, Plano, Texas, has formed a relationship with Nielsen to collect data on key metrics like adjacancies and out-of-stocks, says Joe Crafton, president. "Marketers like more data. If they can measure it, they can manage it," he says. "That [data] helps marketers make fundamental decisions."Surveys that Crossmark has conducted show that the typical retailers set up about 60% of displays without help from a third party. "That leaves a pretty big gap," Crafton says. "We're generally hired to validate the 60% and close the remaining gap. We add extra advocacy to make sure the manufacturer is getting what they negotiated. It's not that retailers don't intend to perform, but there are all these conflicting motivators at the store levels."Crossmark helps create clusters of stores that need similar treatment based on analytics, Crafton says. "We've already gone through the store-level data and the SKU data," he says. "We form clusters around shoppers so we can have regionally and locally relevant product mix and promotions."As P-O-P materials and displays get more expensive and elaborate, Spin Master has been concentrating ROI efforts on measuring the highest-volume stores and shipping them higher-end pieces (like dioramas) to help sell the hottest products, Balkaran says.Although the brand takes surveys, performs audits, and snaps pictures in store to measure compliance, "The easiest and most accurate thing for us to look at is pure lift," he says. "We look at stores we've installed compared to stores we haven't installed. Every brand is unique. The lift for every brand is different. Sometimes you need 6 percent lift to support a program, sometimes you need 12 or 15%."E. & J. Gallo focuses on higher-volume stores and changes its product and promotional blend based on regional drinking preferences, Stachelek says. The company asks its distributors to take pictures of successfully placed displays and e-mail them back, and the winery uses that information to cross-check it against locations where sales lift was most noticeable. "The picture officially shows the display was up," he says. "If the movement has a nice lift, we will determine what the spend is, that we did 500 or 1,000 displays, and how many did we get a return on. That will help determine whether we do this campaign again."The brands' interest in identifying and targeting the highest-volume stores has only just begun, Kramer believes. "All of a sudden, it enables the manufacturer or the CPG to understand where their highest opportunity stores are, and utilize those merchandising services in those stores," he says. "That drives efficiency and effectiveness. We have not seen a lot of that activity yet."The dairy-aisle reinvention that Dairy Management has undertaken with Kraft and Dannon shows huge potential for lift, MacKay says. "Test-and-learns" conducted in conjunction with Kraft and Dannon, the results of which are summarized in an "Activation Guide" the nonprofit has published, realized a 2.2% lift in units and a 1.6% lift in dollar sales, she says."That 1.6% dollar lift translates into a $1 billion opportunity for the retail industry," she says. "It was a strategy that ultimately was implemented in retail stores. It's a good testament to the possibility of collaboration."Although sales lift is the ultimate judgment, RockTenn's Shopper Gauge provides useful data on intermediate measures, Kramer says, through a combination of camera technology and software that tracks metrics like shopper dwell times, purchases by location, and purchases by time of day. "It's understanding how messaging impacts shopper-stopping power," he says. "It's about how location is important. We're finding, in some cases, that high-traffic locations might not be the best place to put your merchandising. It enables us to very quickly assess changes. We're looking at that shopper behavior 24/7."The increasing sophistication of return-on-investment measurement falls away when the investment is not so large, Lee says."On a $100 display or a $50 display, do you really want to spend the dollars seeing if someone engaged with it, or are you going to base your success on what your sell-through was during that time?" he says. "There's still the traditionalist who says, 'If I can get floor space by providing a display, that's all good. I don't need any research.'"

Execution No Longer Just 'Send It and Hope'

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