Many of the problems facing retailers and wholesalers as they try to address merchandising issues stem from a lack of clear definition of goals and procedures for merchandising relationships, industry sources said.
Companies on all sides of the merchandising process agree that in-store execution needs to improve, especially in health and beauty care where the number of products, new items and seasonality work against cooperation. The challenges include:
"At retail there continues to be a need to make sure that planograms are implemented and that once implemented there is some continuity. Problems with out of stocks, event marketing, demonstrations, things of that nature go back to the fact that stores struggle with retaining employees to do all these marketing tasks," said Gary Ebben, President, National Association of Retail Marketing Services, Plover, Wis.
However, there is little agreement over who is responsible for services, which services are the most important, and who manages and pays for the services. This has created confusion among retailers, manufacturers, merchandisers and brokers. Formulating an industry consensus is a priority, sources told SN.
"As an industry, we've placed a lot of emphasis on promotional programs and analytical tools -- the more upstream, headquarters activities. We took our eye off the ball in terms of downstream [in-store conditions]," said Mark Baum, executive vice president, Grocery Manufacturers Association, Washington. Improving in-store conditions is good for all involved parties, he added.
"None of these issues are new; not one iota of this is new. Everyone just has a different take on how to better manage it," said a retail executive who wished to remain anonymous.
The picture isn't all grim, however, as the discussion regarding these problems begins to take shape. NARMS has been doing research on how this dialogue will develop. There is a need to get everyone on the same page with published expectations of the vendor, retailer and other parties, said Jim Hall, chief executive officer, Advanced Retail Merchandising, Lakeland, Fla.
"As this trend continues to emerge, both retailers and suppliers will need to evaluate the benefits and return on investment for these programs, and there will be a need for greater collaboration between all parties on goals and expectations," he said.
The collaboration that is needed may not be far off as retailers take a more active role in the merchandising and in-store execution of categories, sources said. Communication lines will have to open up out of necessity as consumers demand higher levels of service.
"We're at the front end of a new collaborative relationship of retailer and manufacturer driven by the consumer. Historically, it's been that a win had to be at the expense of the other player. We're about to see more collaboration," said Jim Rice, spokesman for Crossmark, Plano, Texas. Making the process visible and working toward new efficiencies will benefit everyone, he added.