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Fixing Order Mistakes at the Store Level. Introduction Cindy Sattler, President and CEO Joel Nelson, Vice President Business Development National Merchandising.

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Presentation on theme: "Fixing Order Mistakes at the Store Level. Introduction Cindy Sattler, President and CEO Joel Nelson, Vice President Business Development National Merchandising."— Presentation transcript:

1 Fixing Order Mistakes at the Store Level

2 Introduction Cindy Sattler, President and CEO Joel Nelson, Vice President Business Development National Merchandising Service Organization (MSO) since 1962 Reps in all 50 states are W2 employees Service all retail channels Associate member and Preferred Provider of the IHA Member of NARMS

3 What is an MSO? 3 rd party liaison between manufacturers and retailers Support product activity at retail to drive sales Extension of clients team executing services at retail In-store resource to improve product performance and drive sales

4 Key Statistics Benefits of working with an MSO include*: Improved retail compliance – Resets implemented faster – Higher quality of initial planogram compliance – 7.8% category sales increase – 70% of all decisions are made at the shelf Only 1 in 4 displays use POP materials Getting new product to the shelf faster – 98% new product cut-ins vs. 60% without 3 rd party support * NARMS study

5 Key Statistics Impact of Out-Of-Stocks (OOS): Cost retailers/manufacturers $93 billion annually* Average OOS is 8%, studies show as high as 17.8% Distribution voids impact additional 5-10 points 1 in 5 consumers forego purchase due to OOS Retailers could increase sales 3.7% if OOS improved OOS = leaving store with no purchase: – Empty shelves or Locked item, no help available – Found help but could not locate item – Price/offer shelf did not match advertised price * RIS News and IHL group published in Retailwire

6 Key Statistics Continued New Item Introductions: Most POGs not implemented according to plan – Once set, drift from plan at rate of 10% per week 17% new items disappear within 8 wks of initial placement Less than 50% promotion execution reaches stores – OOS on promoted items averages 15% Compliance is largely unmonitored/unmeasured

7 Key Statistics Continued Sales Lift of Endcaps Studies show 98% to 141% sales lift for endcap product with promotions pricing vs. items in regular shelf position at regular price.

8 How Is Product Supported At Retail? Reactive – Fixing order mistakes Proactive – Supporting the brand/product at retail Interactive – Education of retailer employees and/or consumers

9 Order Mistakes Consequences Poor product performance Loss of sales / designated floor space Mandatory RTV Added expense to vendor Negative impact on vendor/retailer relationship

10 How Is Product Supported At Retail? Reactive- Fixing order mistakes at the store level Service Examples: Re-ticketing / Price Changes Incorrect UPC Defective Merchandise Packaging Issues Promotional / Branding Errors Poor Sales Performance

11 How Is Product Supported At Retail? Reactive- Fixing order mistakes at the store level Case study:Licensing Mistake Issue:Logo tag used several months early Risk:Lose logo license if not fixed within 10 days Options: 1) Pull inventory and return to vendor 2) Pull logo tag from inventory at store level Results:Kept license Kept inventory at retail

12 How Is Product Supported At Retail? Reactive- Fixing order mistakes at the store level Case study:Trademark Infringement Issue:Used trademark already registered Risk:Lose lawsuit for trademark infringement Options: 1) Pull inventory and return to vendor 2) Cover trademark on all inventory at store level Results:Minimized financial result of lawsuit Kept inventory at retail

13 How Is Product Supported At Retail? Reactive- Fixing order mistakes at the store level Case study:Packaging Failure Issue:Packaging was breaking down at retail Risk:Branding / Quality / Salability Options: 1) Pull inventory and return to vendor 2) Mark down product 3) Fix / replace packaging of inventory at store level Results:Improved packaging met branding standards Maintained retail space and sold at full price

14 How Is Product Supported At Retail? Reactive- Fixing order mistakes at the store level Case study:Instant Redeemable Coupon Issue:Sales of select products down Risk:Inventory Levels Options: 1) Potential for product markdown 2) Affix / distribute coupon of inventory at store level Results:Increased sales due to promotion Maintained retail space

15 How Is Product Supported At Retail? Proactive- Supporting brand / product at retail Service Examples: Ongoing In-store Brand Support Audits Promotion Sets / New Item Cut-ins Restock Resets / Store Support POP Materials

16 How Is Product Supported At Retail? Proactive- Supporting brand / product at retail Case study:New Retailer Test Issue:Supporting test to gain full chain distribution Risk:Not gaining chain wide distribution Options: 1) Monitor sales performance 2) Work with retailer on suspected OOS 3) Store visits to audit and eliminate OOS Results:Eliminated OOS Provided retail intelligence Achieved chain wide distribution

17 How Is Product Supported At Retail? Proactive- Supporting brand / product at retail Case study:Driving sales through an endcap Issue:# of stores that dont set endcap on time Risk:Loss of sales/promotions Options: 1) Monitor sales performance 2) Audit to ensure all endcaps are set, set if necessary Results:All possible endcaps set Report provided for any endcaps not set Increased sales

18 How Is Product Supported At Retail? Proactive- Supporting brand / product at retail Case study:POP Placement Issue:Differentiating product at retail Risk:Effectiveness relative to other print media Options: 1) Other print media than POP materials 2) Differentiate product at shelf w/ POP materials Results:Placed POP materials at 16,000+ locations Learned that not all stores carried product Effective use of print media

19 How Is Product Supported At Retail? Interactive- Education of retailer employees and/or consumers Service Examples: Product Knowledge training Sampling/Demos Mystery Shopping Suggestive Selling Store Placement Assistance Order Recommendations

20 How Is Product Supported At Retail? Interactive- Education of retailer employees and/or consumers Case study:Mystery Shop Issue:Employee knowledge and service Risk:Lack of in-store Brand support Options: 1) Evaluate in-store support from sales data 2) Use company personnel to observe in-store support 3) Perform broader scope evaluation of in-store support Results:More comprehensive perspective on in-store support Independent perspective

21 How Is Product Supported At Retail? Interactive- Education of retailer employees and/or consumers Case study:Brand ambassador Issue:Fast growth company unable to support brand at retail Risk:Loss of distribution Options: 1) Make no changes and risk loss of distribution 2) Hire and manage staff to support brand at retail 3) Outsource and use services as needed Results:Increased sales through store level insights Improved retailer relationships Protected distribution

22 How Is Product Supported At Retail? Interactive- Education of retailer employees and/or consumers Case study:Seasonal product distribution Issue:2 nd facing in another dept would improve sales Risk:Not maximizing sales Options: 1) Status quo 2) Work with buyer to effect store level change 3) Deploy store level solution to get 2 nd facing Results:70% of stores got 2 nd facing Sales increased

23 Summary Thank you!! Cindy Sattler President and CEO Lawrence Merchandising Services O: M: Joel Nelson Vice President Business Development Lawrence Merchandising Services O: M:


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