Nestle Improves on Lack of Execution

Chicago — It’s a problem seemingly out of the control of consumer packaged goods companies: a promotion’s impact is minimized by lack of store-level execution. CPGs themselves don’t have the resources to be sure that each store carrying its product has set up or maintained the proper merchandising and pricing – not to mention handled out-of-stocks.Acknowledging the frustration as well as the lost time and money that lack of execution brings, Nestlé USA’s Glenn Smith touted the double-digit-revenue effectiveness of using consumers with smartphones to help identify and correct problems at retail during an October presentation at the Shopper Marketing Expo. “What does execution actually look like? We really don’t know,” said Smith, Nestlé’s director of category development for Safeway stores. “We can’t see what our shoppers see. Because we don’t know, we don’t know if we’re maximizing results from a promotion.”Nestlé is addressing the issue by employing the services of retail intelligence and analytics company Quri, San Francisco. Quri’s EasyShift iPhone app enables consumers to complete assignments (e.g., surveys, in-store photos) for Quri clients.The information is aggregated to give CPGs information “at the speed of retail,” according to Quri executive vice president of business development Jeff Griffin, who co-presented with Smith. For a weeklong promotion, Griffin says, problems can be fixed before the promotion is over, and sales data can be tied to pre- and post-fix periods to gauge effectiveness.The challenge, Griffin says, is getting the information to those who can address the problems immediately. The model of “measure, correct and learn” works best when the correcting can be done while the promotion is still active. “You gather the data, but at that point it’s only interesting,” he said. “To do something that makes a difference to our shareholder, that makes a difference to our shopper – getting product back in stock – we have to correct it. Narrow the gap from reality to perfect execution.”In 2013, Nestlé worked with Quri on a Fourth of July promotion involving Dreyer’s ice cream that involved several hundred stores across two major chains. Approximately 2% of the stores had out-of-stock issues, and just over 10% had price-tag problems at the shelf. Using Quri’s dashboard, Smith saw that out-of-stocks spiked on July 4 and the price-tag issues did not improve as the promotion progressed.In a later Coffee-mate promotion, Nestlé provided retail broker Crossmark with the information it needed for stores to make corrections mid-promotion. Consumers returned to the stores for post-fix reports, and Smith discovered that the corrections improved sales, with correction speed as a factor. According to Quri, stores where corrections were made within two days had a 37% sales lift, while those where fixes were made within three days saw a 27% lift, and those within four days saw 19%.Overall, stores that had compliance problems showed a 31% sales lift after corrections were made.

Nestle Improves on Lack of Execution

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