The New Accountability

JAMES TENSER

The merchandising services personnel who toil at supermarkets every day are on the front lines of a massive and complex effort to ensure that shelf sets are accurate, promotions are in place and new products are properly cut in.

Emerging disciplines on the planning side, such as shopper marketing and store-level planograms, are adding greatly to the intricacy of this task. There is a growing consciousness that merchandising work must be managed and tracked at a detailed level in order to ensure effectiveness and the return on investment.

Now, a handful of companies are moving forward with technology designed to do just that. At suppliers like Anheuser-Busch, retailers like Supervalu, and numerous brokers and merchandising services organizations, tracking and communications systems are being refined that can support store-level reporting, measure relative performance of merchandising resources and establish benchmarks for effectiveness.

KCBS, a “Kroger-dedicated” food broker based in Cincinnati, has deployed K-Trak, a Web-based communications platform, to move information about retail programs to and from its people in the divisions, said Lynn Sarsgard, president and chief executive officer.

KCBS personnel provide hands-on retail continuity coverage for its principals every eight weeks at 2,300 Kroger stores.

“The technology lets us check pricing and communicate retail programs,” he said, explaining that K-Trak users interact with a Web database.

“This helps put us on a similar level as the national guys,” said Sarsgard, adding, “It lets us represent lines that don't fit the portfolio of the big three brokers.”

Anheuser-Busch, St. Louis, is gaining good results from a system it calls “Mobility” that deploys specially developed handheld devices to assign and track store-level objectives and tasks. Joe Patti, vice president of retail planning and category management at Anheuser-Busch, described the benefits of the Mobility system in a presentation at the Category Management Association conference, held in October in Atlanta.

“Tracking labor is prerequisite for managing it,” said Patti, whose team develops tens of thousands of store-level beer planograms each year and relays them to field merchandisers through its wholesale distribution system.

“Nearly 45% of beer shoppers will avoid purchases when faced with an out-of-stock,” he said. “To meet individual store shopper needs and maintain high-level in-stock conditions, cluster assortment and store-level schematics are optimal.”

Significantly, Mobility provides a two-way path for information, Patti added. This permits the people on the front lines to obtain feedback to assist in issue resolution and changes in the stores.

REPORTING EFFICIENCIES

Self-tracking of performance by brokers, merchandising services organizations (MSOs) and direct-store-delivery suppliers is not new to the industry. Many field organizations have used feedback mechanisms such as faxed forms, telephone interactive voice-response systems (IVR) and, more recently, handheld electronic devices to capture a variety of information on task completion at the shelf.

From the retailer's perspective, however, the variety of reporting mechanisms tends to confound efficient monitoring. At a large chain with a “home store” program, it would not be unusual for 20 or more different organizations to touch a given reset activity, for example. Collating all their performance reports becomes a time-consuming data-management task.

“Traditionally, an MSO would try to respond to retailer RFI [request for information]: ‘Do you have any sort of reporting?’” said Phil Lauria, Managing Director of Pelco Advisors, a retail sales consulting practice. “Each had their own proprietary reporting system, with its own unique tools and processes.”

Typically, these have relied on “IVR and homemade spreadsheets,” he said. “These are still in use in some cases today, and many use the telephone keypad vs. a PC to input data.”

Since larger retailers use multiple entities to do the work, they wind up interacting with different types of reporting systems, said Lauria. “They don't reconcile easily. People need to put some standardization around the implementation side. Each retailer wants to see reporting on its own terms.”

Lauria said he sees momentum building within the merchandising services world to “spec out” a common reporting standard.

“I guess that's a good thing. It drives efficiencies, but more importantly, it drives effectiveness.”

In the past year or more, Supervalu has been one retailer that has quietly mounted an effort to improve in this regard, by establishing its own reporting system for reset work. Called OLRS, for “on-line reporting system,” the tool is essentially a Web portal that multiple merchandising resources interact with to report on task completion in the stores. Officials at Supervalu declined to comment.

According to several sources, the system was developed for Supervalu to support labor management connected with its home store program. For a given project, the provider assigned to each store is identified, and progress is charted. Query tools permit authorized users to view performance at several levels, with dashboards and progress bars. These may range from a single store view, to a geographic area, to all the stores covered by an individual provider, or to the entire project.

Since it was introduced about 24 months ago, some 40 reset providers have come to interact with OLRS, encompassing well over 1,000 individual users.

This new accountability is welcome, says Dan Borschke, president and CEO of NARMS International, the trade group representing retail marketing services organizations. “We see use of these technologies as a positive. Our members want to show the world accountability. I believe it will bring more business, not less, and it will make all of us more professional.”

The advantages posed by a consolidated communications platform, increased shelf-level visibility and generally improved compliance with schematics and promotion plans have been a topic of discussion within the In-Store Implementation Sharegroup, a coalition of CPG manufacturers and supermarkets that released a major paper on the subject last April.

Brian Harris, co-founder of The Partnering Group consultancy, Cincinnati, chairs the ISI Sharegroup. Best known for his pioneering work developing category management methods, Harris has lately been a vocal advocate for improved implementation methods, and the tools that support it — a need he says has been accelerated by the shopper-marketing trend.

“If I could go back and change the eight-step category management cycle today, I'd embed implementation within every one of the steps, not just at the end,” he said in a presentation at the Category Management Association conference.

IPHONE IT IN?

With momentum boosted somewhat by the ISI dialog, a variety of providers are coming to market with updated labor-management and store-data-capture solutions. These range from software for field labor and task management, such as Reflexis and Red Prairie, to store-level auditing services such as RGIS and ICC Decision Services. Store Eyes, a startup based in Allentown, Pa., is bringing a system to market that captures a video image of store displays for digital analysis, while Retail Tactics, another emerging company in Acworth, Ga., has begun deploying a Web-based solution called Right-Action for communicating and managing in-store implementation tasks and capturing shelf intelligence.

Said Lauria, “Most solutions now being deployed by leading merchandising services organizations have some sort of online component.” While methods of data capture vary, the revolution in telecommunications is opening up some tantalizing options.

Sarsgard of KCBS says his firm's K-Trak solution is presently looking at cell phones as an alternative to “very expensive” proprietary handheld devices. “We are testing in the Northeast with five types of cell phones. The system lets us take pictures of a section or a price tag, upload it to the Web database and send it on to manufacturers. It's especially good for capturing ‘before and after’ images.”

Mike Spindler, CEO of Shelf Snap, Lake Bluff, Ill., whose personal involvement with store-level data capture goes back to the founding of EMS in the mid-1990s, says his early-stage company is adding automated analysis of images to the mix.

“We are introducing digital collection and interpretation of in-store intelligence,” he said. “Use of that technology turns almost anyone into an in-store intelligence data collector.”

Spindler said the chief limitation of effective comprehensive capture of shelf conditions has always been cost. Back in his days at EMS, so-called “causal data” was gathered using field operatives, a pricey proposition. “Today, it is a relatively inexpensive component to use cell phones to capture images of task completion. And the latest devices, such as iPhones, can automatically provide a verifiable date-and-time stamp.”