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"Illuminating the Black Hole" - Describes the mission and reasoning behind the In-Store Implementation Network. Proposes a path to industry collaboration and solutions that will improve retail......

"Illuminating the Black Hole" - Describes the mission and reasoning behind the In-Store Implementation Network. Proposes a path to industry collaboration and solutions that will improve retail performance of merchandising, marketing and promotion.

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  • 1. Retail’s Space-TimeContinuum
    How In-Store Implementation Solutions Can Re-Order Our Universe
    V 2.2 2010 In-Store Implementation Network
  • 2. The ISI Challenge
    2
    In-Store Implementation Network
    Feb. 14, 2010
    Intro
    Store-level compliance with merchandising and promotion plans seems to come down to simple physics:
    How much product can be managed, in how much space, taking how much time?
    • But the arithmetic for In-Store Implementation effectiveness turns out to be non-trivial.
    • 3. Shelf conditions are an informational “black hole” for merchants and marketers
    • 4. The measurement and management of compliance is an under-developed art...
  • Executioner’s Song
    Feb. 14, 2010
    In-Store Implementation Network
    3
    “The most brilliantly designed and insightful customer offerings
    can be rendered impotent
    by poor execution.”
    James Allen, Frederick F. Reichheld, and Barney Hamilton,
    "Tuning In to the Voice of Your Customer,"
    Harvard Management Update, Vol. 10, No. 10, October 2005
    Intro
  • 5. Accuracy In Question
    Feb. 14, 2010
    In-Store Implementation Network
    4
    Intro
    n=176
    [ SN, Mar. 20, 2009]
  • 6. Lack of Measurement
    Feb. 14, 2010
    In-Store Implementation Network
    5
    Intro
    [ CPGmatters Nov. 17, 2008]
  • 7. Industry Demands Improvement
    Feb. 14, 2010
    In-Store Implementation Network
    6
    Intro
    Which of the following ISI practice areas is of highest importance within your organization today?
    38%
    Plan-O-Grams
    27%
    Promotions
    15%
    Displays
  • 8. Compliance Gap
    7
    In-Store Implementation Network
    Feb. 14, 2010
    Intro
    35% indicated no process to track compliance
    Another 7%don’t know!
  • 9. Methods Employed
    8
    In-Store Implementation Network
    Feb. 14, 2010
    Intro
    Among Those Who Say They Track Compliance:
    Heavy reliance on spot-checks;
    sign-offs; and
    self reporting
  • 10. Promotion Breakdown
    Approximately 50% of authorized retail promotional displays are not erected or erected late…
    This amounts to an estimated $25 billionof ineffective spending annually by CPG manufacturers.
    Feb. 14, 2010
    In-Store Implementation Network
    9
    Opportunity
    Source: “In-Store Implementation: Current Status and Future Solutions” (2008)
  • 11. Excess Shelf Stocks
    An estimated 86% of stock on hand in food stores reflects quantities in excess of seven days of supply.
    This oversupply accounts for approximately $46 billionin stagnant capital industry wide.
    Actual net cost to the grocery industry may approach $3.3 billionat a discount rate of 5% per year.
    Feb. 14, 2010
    In-Store Implementation Network
    10
    Opportunity
    Source: “In-Store Implementation: Current Status and Future Solutions” (2008)
  • 12. Out of Stocks
    Shelf-level oversupply coexists with an intractable out-of-stock problem amounting to 8.3% overall, and 16% or higher on the fastest moving items.
    70 to 75% of these are a direct result of retail store practices, costing the typical retailer about 4% of net sales.
    This works out to a revenue loss or displacement of $20 - 25 billion.
    Feb. 14, 2010
    In-Store Implementation Network
    11
    Opportunity
    Sources: Gruen, et al and “In-Store Implementation: Current Status and Future Solutions” (2008)
  • 13. Bottom Line
    The ISI Sharegroup estimated the total cost of sub-optimal merchandising performance is at least 1% of gross product sales, or $10 - $15 billionof the $1.5 trillion total annual sales across the food, drug and mass channels.
    Feb. 14, 2010
    In-Store Implementation Network
    12
    Opportunity
    Source: “In-Store Implementation: Current Status and Future Solutions” (2008)
  • 14. Search for Solutions
    It’s time for an ISI Industry Initiative
    Together we can illuminate the “black hole”
    Connect store operations with merchandising
    Identify new standards for in-store sensing
    Define better performance benchmarks
    Feb. 14, 2010
    In-Store Implementation Network
    13
    Call to Action
  • 15. The ISI Sharegroup Story
    Feb. 14, 2010
    In-Store Implementation Network
    14
    ISI Back Story
    Formed in 2007 by like-minded visionaries from consumer packaged goods, retail, technology and consulting firms:
  • 16. The ISI “Working Paper”
    Feb. 14, 2010
    In-Store Implementation Network
    15
    ISI Back Story
    Published April, 2008
    15,000 words
    1,000+ downloads
    P.1 coverage Supermarket News
    Progressive Grocer article
    Numerous media pickups
    Widely-cited
  • 17. Fast-Forward: The ISI Network
    Feb. 14, 2010
    In-Store Implementation Network
    16
    ISI Back Story
  • 18. ISI Defined
    Feb. 14, 2010
    In-Store Implementation Network
    17
    Implementation
    Plan Actions
    • By store/item
    • 19. What is required
    • 20. When action is required
    • 21. Who will take the action
    Do The Work
    • Coordinate the players
    • 22. Handle exceptions in real time
    • 23. Includes communications
    Measure Outcomes
    • Verify compliance
    • 24. Report current store conditions
    • 25. Ongoing and systematic
  • ISI Solution Criteria
    Players identified, roles assigned, enabled
    In-store sensing with central monitoring
    Complete visibility with controls
    Common data with custom dashboards
    Communication channels
    Systematic, not ad hoc
    Continuous and sustainable by design
    Feb. 14, 2010
    In-Store Implementation Network
    18
    Implementation
    “Embedded, Continuous, Always On”
  • 26. ISI “Communities of Interest”
    Master Store Planning
    Store Capacity-Based Planning
    Planogram Compliance
    Promotion Compliance
    New Product Compliance
    Shopper Media Compliance
    ISI Communications
    Feb. 14, 2010
    In-Store Implementation Network
    19
    ISI Network
    Three Primary Initiative Areas: Planning, Compliance, Communications
  • 27. ISI Planning
    Feb. 14, 2010
    In-Store Implementation Network
    20
    ISI Network
    At Cluster/Store/Category/Item Level:
    • Master Store Planning: SALA – Space; Assortment; Layout; Adjacency
    • 28. Capacity Planning: Balances in-stock vs. assortment vs. labor
    • 29. Cluster-level planning with store-level allocation helps limit complexity
    • 30. At what point(s) do we take this down to store level?
    “Intelligent Loss of Work”
  • 31. ISI Compliance
    Feb. 14, 2010
    In-Store Implementation Network
    21
    ISI Network
    Fundamentally An Execution Problem:
    • Apply in-store sensing / measurement processes
    • 32. Pay for Performance ideal
    • 33. Promotes “intelligent loss of work”
    • 34. New reality-based performance standards emerge
    The Four Compliances: Planogram, Promotion, New Product, Media
  • 35. ISI Communications
    Feb. 14, 2010
    In-Store Implementation Network
    22
    ISI Network
    Inter- / Intra-Organizational:
    • Present methods are largely ad hoc and unstructured, a mix of email, phone, spreadsheets, documents, etc.
    • 36. Update to more structured communications, i.e. portals working from common data
    • 37. “Many-to-many” solutions required
    • 38. Sharing of insights in real time
    ISI’s Breakthrough Opportunity
  • 39. Help Illuminate the “Black Hole”
    Industry collaboration is imperative
    Room for many under the ISI tent
    Big vision – bigger payoff
    Cases -> Benchmarks -> Best Practices
    ISI Benchmark Study: Q3 2010
    Feb. 14, 2010
    In-Store Implementation Network
    23
    Conclusion
  • 40. Join Us!
    James Tenser, Director
    520-797-4314
    jtenser@instoreimplementation.com
    24
    In-Store Implementation Network
    Feb. 14, 2010
    Conclusion