Realtime Shelf Execution Data for Ensuring Retail Store Compliance

Consumer packaged goods (CPG) manufacturers and brands face two challenges in maintaining the perfect store. One, crafting an appealing planogram, determining product pricing and promotions, and securing the ideal placement for your brand in retail stores involve significant strategic planning and data analysis. The second challenge is the execution of these plans effectively across multiple stores while managing a vast array of SKUs which is easier said than done. 

Achieving the desired results hinges on precise execution at the store level. This means ensuring that prices are correct, stock levels are adequate, and your brand occupies the optimal position at the right time, exactly as planned. Achieving this alignment is called a ‘Perfect Retail Execution’ and helps brands better influence purchase decisions at point-of-sale and drive the desired sales outcomes.

Today for brands, monitoring shelf conditions and retail execution becomes paramount. Visibility gaps in your stores can leave you hindered from making data-driven decisions leaving you with sub-par business outcomes. 

While this might sound straightforward, it comes with several challenges if retail execution monitoring is undertaken manually. Human error, lack of real-time insights, dependency on the skills of merchandisers, and ensuring contractual compliance on the ground can all pose significant obstacles.

Why is ensuring Store Compliance so important?

For CPG manufacturers and brands, ensuring that their plans are executed flawlessly at the retail level can make all the difference. Let us understand in depth why it is important.

• Maximizing your return on investment (ROI): Imagine all the effort that goes into planning a successful promotion. You carefully determine the discount, design eye-catching displays, and set the ideal price. Yet, all this effort can be in vain if the execution at the store level falls short. When promotions are flawlessly implemented, customers can fully benefit from the special offers, resulting in a significant increase in sales. This seamless execution is crucial in maximizing your return on investment (ROI), ensuring that every dollar spent on promotions delivers the intended results.‍
• Out of stock:  As a consumer, imagine walking into a store and discovering that your favorite products are out of stock. It's incredibly frustrating, isn't it? Ensuring store compliance can help avoid this issue by making sure shelves are always well-stocked. This not only improves the shopping experience but also drives higher sales.‍
• Brand Standard:  Each brand is unique and has its own messaging strategies around how products are presented, priced, and promoted across different stores and locations. By maintaining and enforcing promotional standards in retail execution, brands can enhance their visibility and consistency in messaging across diverse retail environments. This consistency strengthens brand identity and contributes to increased sales and market competitiveness.
• Improved Sales: Store compliance, if monitored properly and gaps are filled promptly, can help brands save on lost sales and improve brand performance, resulting in increased brand sales in stores.

Why is monitoring store compliance in the real-time necessary?

Planogram

• ‍Out of stock: Is the level of stock optimal? Your product is not missing in stores. Out-of-stock is an important KPI, and a perfect store with products available can enhance the consumer experience.‍
• Brand Share: Is your brand's share on the shelf accurately reflected in stores as per the retailer's contract? Brand share is a significant metric that often mirrors your brand's market share. Real-time store compliance ensures this data is reported accurately, reflecting the agreed-upon placement and visibility of your products‍
• Must Stock List: The Must Stock List (MSL) is an agreement with retailers to prioritize key products that customers frequently seek or newly launched items, ensuring their constant availability for visibility. For example, imagine you're a beverage company launching a new line of energy drinks. To ensure these products catch customers' attention and drive purchases, you establish an MSL agreement with retailers. This agreement mandates that a specified quantity of your new energy drinks must be on shelves at all times. Store compliance is crucial here to ensure these drinks are prominently displayed and stocked as agreed. Failure to implement in stores can result in reduced visibility and missed sales opportunities.

Also Read: How CPGs Can Achieve 100% Planogram Compliance in Retail Stores

Pricing

• ‍Price Compliance: In retail stores price influences consumers' decision to buy products. Hence the price and discount must match your product on the shelf to optimize the strategy you have implemented in stores.
• Competitive Pricing: Pricing alone won’t give you an advantage; prices that align with your buyers' expectations are crucial. Data-driven decisions can help you maintain competitiveness on the shelf with the right pricing strategy for your brand.
• Price Gaps: These price gaps can occur due to products being shifted on shelves by customers, incorrect placement, missing price tags, or discrepancies between the store's price tag and the agreed price with retailers. Closing these price gaps can be done efficiently with the help of real-time tracking.

Also Read: Monitoring Price Tag Compliance for CPG Brands in 2024 and beyond

Contract Compliance

A contract between retailers and CPG manufacturers involves agreeing on how brand promotions will be executed in stores, the discounts offered, and the special efforts made during events to attract customers. It specifies where point-of-sale materials (POSM) will be placed. These contract details are meticulously planned and negotiated with retailers, and they represent a significant investment by the manufacturer.

• Trade Promotional compliance: Trade promotions are essential for capturing consumer interest and increasing sales. Adhering to promotional agreements ensures that marketing efforts like special offers and displays are carried out as planned. This draws in customers and enhances the brand's presence on store shelves, making it more noticeable and appealing resulting in a strong position in the competitive market.
• Pricing: Accurate display of pricing details like package value and bulk offers in stores is critical for CPG manufacturers. This ensures that customers understand and appreciate the value they're getting. Any pricing discrepancies can confuse customers and affect both sales and how the brand is perceived. Therefore, it's essential to carefully monitor pricing across retail outlets to uphold contract integrity and ensure that promotional strategies deliver their intended impact.
• Optimize retailer incentives/payouts: Monitoring store compliance helps optimize how incentives or payouts are given to retailers. Ensuring correct incentives are paid based on contract execution such as setting up displays or running promotions allows for appropriate rewards. This approach ensures incentives are performance-based, aiding effective planning and rewarding.

Real-time visibility helps in making data-driven decisions that drive effective sales and marketing initiatives, ultimately leading to increased profitability. Real-time visibility provides a 360-degree view of your product, promotion, and contract performance with unparalleled precision. Instead of waiting until the end of a promotion to assess its impact, real-time data allows you to monitor and adjust your strategy promptly.

This means you can swiftly respond to changing market conditions, optimize promotional efforts while they're ongoing, and ensure compliance with contract terms across all retail locations. By having instant insights into factors like product availability, pricing accuracy, and promotional execution, you can make informed decisions that maximize sales and enhance overall brand performance in real-time.

Compliance tracking using ShelfWatch Image Recognition 

Compliance tracking in retail settings can be challenging with manual methods prone to human error and inconsistency due to varying merchandiser skills and reporting accuracy. Adopting ShelfWatch Image Recognition powered by Artificial Intelligence for store compliance can streamline this process with just a few clicks, ensuring smoother and more accurate store compliance monitoring.

The retail industry is increasingly adopting AI technologies, with investments in AI-centric systems reaching significant levels, second only to finance and banking as of January 2024. In 2023, the retail sector saw investments of $19.7 billion, projected to grow significantly in the future.

Also Read: How Image Recognition Helps in Real-Time Retail Shelf Monitoring

Benefits of ShelfWatch Image Recognition

• ‍Seamless Automation: Replace manual audits with a streamlined process using Image Recognition technology, saving merchandisers valuable time.‍
• Enhanced Efficiency: Conduct retail audits effortlessly with just a few clicks, even across a large number of stores.‍
• Real-Time Insights: Monitor compliance in real-time, gaining instant visibility into store-level, category-level, and geographic-level performance data.‍
• Customised Reporting: Receive detailed reports and customisable dashboards tailored to your specific needs, facilitating easy monitoring of key performance indicators (KPIs) such as: Out-of-stock occurrences, On-shelf availability, Brand share, Pricing compliance, Competitor analysis and Contract Compliance.
• ‍High Accuracy: Ensure data accuracy with over 95% precision at SKU levels, providing reliable insights for informed decision-making.‍
• Rapid Deployment: Utilize ShelfWatch with Saarthi for quick deployment and detection of new SKUs within 48 hours, outpacing other image recognition providers.‍
• User-Friendly Interface: Access a user-friendly interface that simplifies data interpretation and enhances retail execution in stores seamlessly.

ShelfWatch is already transforming the retail execution process for many global CPG brands, helping them perfect their retail execution and monitor store compliance in real time. Sounds great! Schedule a demo or know more.