AT YOUR SERVICE 2002

John Karolefski

It takes more than clever advertising and effective promotion to succeed in brand marketing. Those critical elements merely set the stage for what happens in-store. Did the shopper buy the product?

Getting that sale is often more difficult than providing value to the shopper, according to experts familiar with the challenges of in-store merchandising. The right products must be stocked in the right place on the shelf. Discontinued items must be removed to make room. New products sometimes must be cut in quickly to coincide with a media schedule because shoppers expect to find the product. Above all, stock-outs must be prevented. Welcome to the world of merchandising services where delivering products to the shelf quickly and accurately can mean the difference between a sale and a disappointed shopper. Closely related is ensuring that in-store marketing programs occur without a hitch. Both activities require gathering and delivering retail intelligence by a third party -- a sales agency, a merchandising service organization, or a marketing management company. Today, technology is elevating their activities to a higher level of performance, resulting in increased sales and profits.

"I don't think any of these groups is necessarily ahead of the others," said Bill Bishop, president of Willard Bishop Consulting, Barrington, Ill. "What counts is the leadership of the company, their willingness to invest, and their ability to envision where technology can help. I think you're going to find companies in every one of these groups that have stepped out in front of the pack."

Technology has helped CRS Lawrence Service, a Minneapolis-based merchandising company, better manage its clients' projects, said Amy Holzman, the company's executive vice president.

"The benefits to both our internal and external clients as a direct result of current available technology are real-time information and communication capabilities," she said.

Here's a closer look how one company in each group is improving its service to brand marketers by the use of technology:

Sales Agency

Crossmark Sales Co. equips its field force with computer notebooks and handhelds. These reps pull down stockkeeping-unit and store-level data daily to be well-informed when they go to the shelf. They receive priorities to work on, whether it's to cut in new items or to confirm that promotional displays are in place.

"The information they get is fresh, and the information we get back that night when they synchronize again is fresh," said Joe Crafton, senior vice president of retail operations for the national sales agency based in Plano, Texas. "Everything we do is designed to provide feedback to the manufacturer and maximize the hours in the store. The way you do that is to deliver good data to retail reps. If they're in the store with bad information, they're not able to do their job properly."

The measure of success, according to Crafton, is "speed-to-shelf," which is a percent of full distribution in a certain time frame. As an example, he proudly pointed out the merchandising work done in the autumn of 2001 for the introduction of Listerine PocketPaks, the oral care strips that have received widespread publicity (samples were even distributed at the Oscars!).

"This was a lot of excitement around this product prior to the first ship date," said Moe Rodriquez, director of retail operations for Pfizer Consumer Healthcare, the brand marketer. "If people couldn't find it [in stores], there would have been major problems."

Rodriquez said displays, endcaps and clip strips complemented the facings on the shelf. Retail reps in food, drug and mass stores nationally delivered 72.7% speed-to-shelf in two weeks. Added Crafton: The average speed-to-shelf today is 80% in eight weeks, while five years ago the average was 70% in 12 weeks without using technology.

Merchandising Service Organization

The SPAR Group has focused on putting all of its applications on the Internet to deploy people faster and more efficiently. The company's 4,500 merchandising specialists conduct over 2 million client-store calls a year, so keeping track of them is challenging. The company uses proprietary logistical deployment software that assigns merchandising specialists, gives them instructions and specific planograms for each store, and schedules materials. When the specialists arrive, they set up displays, load the inventory, report the work, upload that information to corporate databases in real time, and sometimes even take and upload a digital photo of the finished section.

Getting products on the shelf quickly is the goal, stressed Bill Bartels, vice chairman of the firm based in Tarrytown, N.Y. This maximizes the manufacturer's return on their merchandising investment.

"In our industry, faster is better -- whether you're doing new-store sets, conversions, or cut-ins of new products," he said. "If you can get it on the shelf quickly, manufacturers and retailers are going to have more incremental sales and profit."

Perhaps the most vivid example of the importance of speed-to-shelf involves the video release of a hit movie like "Harry Potter and the Sorcerer's Stone" from Warner Home Video. The "street date" is critical for home videos because stores can't sell a copy before a specific time, but must be prepared for millions of customers rushing their stores when the day finally arrives. The appointed hour for "Harry Potter" was midnight on Tuesday, May 28.

Warner turned to SPAR to cover 1,831 Kmarts across the country. The company set up displays and stocked VHS videos and DVD cassettes in a narrow time frame. Warner and Kmart executives watched the national rollout take place on their office computers with real-time graphical execution maps.

Meanwhile, at Kmart over the same Memorial Day weekend, the Clorox Sales Co. dispatched SPAR's merchandising specialists to "blitz" an ad item and a pallet program for Kingsford charcoal. The availability resulted in the highest-volume Memorial Day for Kingsford that Clorox has ever had at Kmart, according to Brian Staudenmaier, the company's national sales manager for the Kmart team.

"It was 47% above the prior year. That's at a time when Kmart closed 283 of its stores. We're very happy with the technology used, the execution against objectives, and the reporting back in a timely and efficient manner," he said.

Marketing Management Company

The technology employed by Mass Connections allows manufacturers and retailers to monitor in-store events and related marketing and merchandising activities. "It's real-time integration that is always on -- 24/7," explained Caroline Nakken, principal of the national in-store marketing company based in Cerritos, Calif.

Its "enterprise solution" consists of four parts:

Hyperlink to stores. Store managers click on a hyperlink to the MC Web site where they can see all of the sampling events and merchandising activities scheduled that week.

MC Card. The "smart card" provides accountability of personnel checking in and out of stores for sampling events, as well as serving as a debit card for them to buy sample products and supplies. The information is monitored on the Internet in real time by the local staffing demo agency and MC's corporate office.

Interactive voice response. After an event, personnel use a touch-tone phone to report the details of execution, including whether signage was installed, POP displays were up, and so forth.

POS data. Scan data is pulled before, during and after the event to determine the impact on sales.

This process is used in all Wal-Mart stores and has been praised for its work there by such major marketers as Unilever. "I cannot be in 1,000 stores on one day, but the MC Card can," said Ame Cameron, associate marketing manager for health and personal care at Unilever-North America. "Not only does the MC Card provide reassurance that a demonstrator was in the store, but it also holds demonstrators accountable, providing the potential for stronger same-day sales."

The card and the rest of the enterprise solution are rolling out to 17 other supermarket chains serviced by Mass Connections.