Closing the execution gap


I’ve heard it joked more than once that the role of managing retail execution goes to the person who isn’t in the room, why? Because anyone who’s had experience with it knows just how difficult it can be.

Closing the execution gap

I’ve heard it joked more than once that the role of managing retail execution goes to the person who isn’t in the room, why? Because anyone who’s had experience with it knows just how difficult it can be.

For decades retailers have struggled to get their programs implemented and maintained in store with the speed and quality to win; instead seeing uneven execution and lost opportunities. An increase in stores and faster rates of change has made this even more challenging.

Many corporate managers fight the problem with increasing the measures of control, which leads to greater cost and frustrations, resulting in marginal benefits since the root cause is not necessarily addressed. Perhaps now is the time to recognize the limits and value of authority and instead reorient from a paradigm of control to empowerment. This might seem controversial to managers who have fought the problem with an ever tightening grip on the reigns - however, the concept must first be considered with an open mind.

The root causes

First, let’s try to understand what’s driving the problem with execution today. Root causes range from not assigning the correct resources to products not being available, from unclear responsibilities to impossible instructions, from planograms that don’t fit the space to ones whose product allocations don’t support the rate of sale.

A bit of information and empathy is in order here: corporate has to maintain a high tempo of change to stay ahead, just look at the share of sales that new items account for; store staff are often faced with an impossibly long to-do list, meanwhile all their stores are (hopefully) being picked over by hordes of customers. So, attention all store staff: the rate of change is not going to slow down. Attention corporate staff: running a store can be a pretty bewildering task.

While corporate managers fight execution problems, store management complain of too much work and too little time; resulting in new items being missed, poor add and delete timing, planograms that don’t fit and item facings that neither enhance the products they sell nor support efficient restocking. From perspective of the shop floor, corporate can be seen as asking stores to assemble flat pack furniture but with poorly translated instructions - and missing parts; whilst also attending to other tasks. CBS’ “Undercover boss” must have made store staff cheer when the CEO discovered first-hand what it’s like to set up a display with a generic photo and without all the parts. Not so easy.

Empowerment: What it is, what it isn’t

Check most dictionaries and you will find two definitions for empowerment: one centering on authority, and one around ability. The focus today is on the former but we should instead be concerned very much with the latter; empowerment is about ability. It should be about giving stores the tools, time, and resources to win - as opposed to the authority to decide what, when, how and even if to implement.

The solution to empowerment involves a strategic shift in behavior, from telling stores what to do, to asking what they need to win and delivering on that promise. The best start is to define success: “A well-stocked, organized display, incorporating the most recent assortment - presented according to strategy.”

The next stage is to consider all the forces acting on the shelf, such as:

  • Major reviews
  • Planogram Updates
  • Customers
  • Restocking

Customers are, or certainly should be a fact of life. While major reviews often get significant attention, many retailers have gaps in their support for planogram updates. If planograms are not set to match consumer demand corporate is asking stores to restock more than they should with some items while carry excess inventory for others - in an era of reduced store labor hours and heightened customer expectations. Of course none of this is actually stated, but the reality is stores, with limited labor and a multitude to do, cannot be criticized any more for adapting to real world conditions than anyone back at the office keen to change processes to make them more efficient - or even feasible.

Principles of sound retail implementation

With a holistic view of the forces acting on the shelf, a retailer can begin to craft an approach to first reduce the rate of “erosion” and second be sure the programs themselves are not contributing to them; as such, three concepts emerge:

  • Allocation by item or brand relates to rate-of-sale and supports case-pack replenishment
  • Ensure all aspects of change are covered, not just the major reviews, but each and every add and delete
  • Each and every store needs a program that fits the physical space they have available

With a variety of structures in place in the market, it would be presumptuous to suggest that there is a single, best execution method; however, with these pillars in place it follows that programs should have the basics:

  • Organize - Retail execution is the primary responsibility of the people involved at the store, regardless of countless other “crucial” tasks
  • Budget - Appropriate a realistic number of hours to hand the task from start to finish
  • Instruct - Concise, readable instructions are a vital accompaniment
  • Parts - Ensure all the associated fixtures and signage are ready and available
  • Logistics - Deletes should precede the new items by appropriate lead time to clear out; new items should be available and in store
  • Close the Loop - Stores need an opportunity to effectively provide feedback. Such feedback should to be systematic and structured in order to drive accountability
  • Report - Ultimately the only way to gauge performance, improve accountability, and win is to report on progress, from compliance completions to complaints

Although people remain at the center of any activity, a well-defined process supported by the right systems is crucial. The fatal flaw is often a lack of timely, structured feedback. Regional management and lengthy store communication are too labor intensive to be considered feasible options. Instead your planogram portal needs to not only enable stores to quickly find the content they need, but also to provide structured feedback that can be stored in a central database and reported upon.

Although people remain at the center of any activity, a well-defined process supported by the right systems is crucial. The fatal flaw is often a lack of timely, structured feedback. Regional management and lengthy store communication are too labor intensive to be considered feasible options. Instead your planogram portal needs to not only enable stores to quickly find the content they need, but also to provide structured feedback that can be stored in a central database and reported upon.

Summary

Problems don’t go away just because you ignore them. And retail execution has been a long standing issue. It’s time to recognize that more layers of control and harsher dictums on compliance are not going to solve the problem. Take a page out of the corporate leadership book - think about empowerment, design systems so that stores can win.

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