Forbes.com

From shelf to checkout: How brands can stand out at stores

More than ever, regaining control of the in-store experience is critical for brand growth.

By Giovanni Arnese, Sanjay Dhiri, Marcello Tripodo and Nicolas Willemot

First published on julio 10, 2014
min read


This article originally appeared on Forbes.com. Life was a lot simpler when the CEO of a consumer goods company could focus most of his or her attention on marketing to grow a brand. But new pressures are now forcing them to shift more energy to sales and commercial capabilities. Tougher competition is making retailers strive even harder to increase store productivity. And each year sees a rise in the number of shoppers waiting until they’re in the aisle to choose a brand, often making up their minds in just a few seconds—and reconsidering their choice every other time they buy. Meanwhile, the number of products is continually expanding while shelf space shrinks, due to the rise of private labels and smaller retail formats. Faced with increasingly complex decisions about which products to place where and how to properly activate them, sales teams are often ill-equipped to make the right trade-offs. As a result, shelves are cluttered, promotions are inadequately executed, brands struggle to stand out, and sales productivity ratios stagnate, at best. More than ever, regaining control of the in-store experience is critical for brand growth. How are winners getting it right? Drawing heavily on shopper insights to understand their category’s rules, successful companies zero in on the sales drivers they need to pursue. They use that knowledge to sketch out what an ideal store should look like in order to deliver the greatest results. This is their “picture of success”—a vision of which brands and SKUs to place in each store, where to place them, how many facings, what type of layout and what promotions to activate in a way that will best convince shoppers to buy. They use this vision as the basis for every important decision, from negotiating with key accounts to tracking and compensating sales reps. One invaluable result: The sales capability can be measured, becoming more of a science than an art. Winning companies typically follow three basic steps: Identify which critical in-store assets to own and how to optimize them. Leading companies determine which assets in the store—from the actual category shelf and secondary placements to promo slots and signage—they need to control and optimize to outperform rivals. For snacks or gum, for example, this might mean being present at the checkout counter in traditional trade or controlling promotional hot spots in hypermarkets. One maker of jam was able to boost net sales by an average 15% to 25% within four weeks in pilot stores by taking control of in-store assets. By arming its account managers with the information that the brand’s 30% share of shelf space was significantly lower than its 50% overall market share, they were better able to negotiate with store owners for more space. Knowing that 89% of jam shoppers already have their flavor in mind when they enter the store allowed the company to better organize the shelf. And understanding the variety of uses consumers have for jam, allowed it to identify and make the most of the right hot zones for secondary placement. By placing its jam near waffle mix and cold meats, for example, it knew it would increase the odds of reaching not only the 75% of shoppers who come into a store knowing they want jam, but also the 25% who don’t. Plan “store back,” not “marketing forward.” From strategy to brand planning, trade marketing and sales, leading companies refocus their business routines to defining and executing against the ideal store. This “store back” approach requires companies to take stock of constraints in shopper attention, in available store space and in sales execution capacity, and use those constraints to develop brand strategies fit for winning at the point of sale. Brand teams have clear touch points with customer teams, forcing them to go back to what actually succeeds in the store in order to define their brand plans. As a result, the best companies know how a new product will be activated in the store well before they approve it. Their product portfolio is based on space availability, their merchandising plans on placement feasibility. Promotional plans and new SKU listings are tied to their top customers’ commercial calendars. Not only does this help a company focus on what can succeed in a particular store, but it also has the benefit of streamlining the organization to what matters most. It ends the days of bloated, product-focused organizations. Deliver consistent, measurable in-store execution. Finally, leading companies establish a system to ensure that their brands are unfailingly activated in the store as intended. They lay out clear steps for sales reps to follow before, during and after store visits to ensure compliance to the picture of success. Scorecards measure whether or not each sales rep performs those activities in each outlet. Sell-in activities such as shelf visibility or product availability become performance metrics tied to salesforce compensation, replacing output measures such as sales volume, which may feel unattainable or lead to misguided incentives. Forward-thinking companies rely on technology solutions, such as handheld devices or online portals, to monitor performance. Not only does this increase sales reps’ in-store effectiveness, it also frees up time for them to visit and improve other critical stores. In both traditional and modern trade settings, the results can be impressive. In one European market, a food company saw stores that had implemented a sales excellence program achieve 70% more volume uplift than non-program stores. Another company saw a similar effort deliver an uplift of more than 15%. Based on our experience, companies that rediscover the potential inside each store can watch sales grow by an additional 5% to 15% each year. But this improvement needs to be earned again and again. Shopper behavior and the retail environment continually evolve, and even the best picture of success needs to be updated. In the era of super-fast shopper decisions and dwindling shelf space, the store has become a must-win battleground. Brands no longer can afford to stand still—or leave anything to chance. Giovanni Arnese is a Bain & Company partner based in Rome. Sanjay Dhiri is a partner in Bain’s London office. Marcello Tripodo is a Bain partner based in Milan and Nicolas Willemot is a Bain partner in Brussels. All are members of Bain’s Consumer Products practice.

This article originally appeared on Forbes.com.

Life was a lot simpler when the CEO of a consumer goods company could focus most of his or her attention on marketing to grow a brand. But new pressures are now forcing them to shift more energy to sales and commercial capabilities. Tougher competition is making retailers strive even harder to increase store productivity. And each year sees a rise in the number of shoppers waiting until they’re in the aisle to choose a brand, often making up their minds in just a few seconds—and reconsidering their choice every other time they buy.

Meanwhile, the number of products is continually expanding while shelf space shrinks, due to the rise of private labels and smaller retail formats. Faced with increasingly complex decisions about which products to place where and how to properly activate them, sales teams are often ill-equipped to make the right trade-offs. As a result, shelves are cluttered, promotions are inadequately executed, brands struggle to stand out, and sales productivity ratios stagnate, at best. More than ever, regaining control of the in-store experience is critical for brand growth.

How are winners getting it right? Drawing heavily on shopper insights to understand their category’s rules, successful companies zero in on the sales drivers they need to pursue. They use that knowledge to sketch out what an ideal store should look like in order to deliver the greatest results. This is their “picture of success”—a vision of which brands and SKUs to place in each store, where to place them, how many facings, what type of layout and what promotions to activate in a way that will best convince shoppers to buy. They use this vision as the basis for every important decision, from negotiating with key accounts to tracking and compensating sales reps. One invaluable result: The sales capability can be measured, becoming more of a science than an art.

Winning companies typically follow three basic steps:

Identify which critical in-store assets to own and how to optimize them. Leading companies determine which assets in the store—from the actual category shelf and secondary placements to promo slots and signage—they need to control and optimize to outperform rivals. For snacks or gum, for example, this might mean being present at the checkout counter in traditional trade or controlling promotional hot spots in hypermarkets.

One maker of jam was able to boost net sales by an average 15% to 25% within four weeks in pilot stores by taking control of in-store assets. By arming its account managers with the information that the brand’s 30% share of shelf space was significantly lower than its 50% overall market share, they were better able to negotiate with store owners for more space. Knowing that 89% of jam shoppers already have their flavor in mind when they enter the store allowed the company to better organize the shelf. And understanding the variety of uses consumers have for jam, allowed it to identify and make the most of the right hot zones for secondary placement. By placing its jam near waffle mix and cold meats, for example, it knew it would increase the odds of reaching not only the 75% of shoppers who come into a store knowing they want jam, but also the 25% who don’t.

Plan “store back,” not “marketing forward.” From strategy to brand planning, trade marketing and sales, leading companies refocus their business routines to defining and executing against the ideal store. This “store back” approach requires companies to take stock of constraints in shopper attention, in available store space and in sales execution capacity, and use those constraints to develop brand strategies fit for winning at the point of sale.

Brand teams have clear touch points with customer teams, forcing them to go back to what actually succeeds in the store in order to define their brand plans. As a result, the best companies know how a new product will be activated in the store well before they approve it. Their product portfolio is based on space availability, their merchandising plans on placement feasibility. Promotional plans and new SKU listings are tied to their top customers’ commercial calendars. Not only does this help a company focus on what can succeed in a particular store, but it also has the benefit of streamlining the organization to what matters most. It ends the days of bloated, product-focused organizations.

Deliver consistent, measurable in-store execution. Finally, leading companies establish a system to ensure that their brands are unfailingly activated in the store as intended. They lay out clear steps for sales reps to follow before, during and after store visits to ensure compliance to the picture of success. Scorecards measure whether or not each sales rep performs those activities in each outlet. Sell-in activities such as shelf visibility or product availability become performance metrics tied to salesforce compensation, replacing output measures such as sales volume, which may feel unattainable or lead to misguided incentives.

Forward-thinking companies rely on technology solutions, such as handheld devices or online portals, to monitor performance. Not only does this increase sales reps’ in-store effectiveness, it also frees up time for them to visit and improve other critical stores.

In both traditional and modern trade settings, the results can be impressive. In one European market, a food company saw stores that had implemented a sales excellence program achieve 70% more volume uplift than non-program stores. Another company saw a similar effort deliver an uplift of more than 15%.

Based on our experience, companies that rediscover the potential inside each store can watch sales grow by an additional 5% to 15% each year. But this improvement needs to be earned again and again. Shopper behavior and the retail environment continually evolve, and even the best picture of success needs to be updated. In the era of super-fast shopper decisions and dwindling shelf space, the store has become a must-win battleground. Brands no longer can afford to stand still—or leave anything to chance.

Giovanni Arnese is a Bain & Company partner based in Rome. Sanjay Dhiri is a partner in Bain’s London office. Marcello Tripodo is a Bain partner based in Milan and Nicolas Willemot is a Bain partner in Brussels. All are members of Bain’s Consumer Products practice.