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Retail’s Space-TimeContinuum<br />How In-Store Implementation Solutions Can Re-Order Our Universe<br />V 2.2 2010 In-Stor...
The ISI Challenge<br />2<br />In-Store Implementation Network<br />Feb. 14, 2010<br />Intro<br />Store-level compliance wi...
Shelf conditions are an informational “black hole” for merchants and marketers
The measurement and management of compliance is an under-developed art...</li></li></ul><li>Executioner’s Song<br />Feb. 1...
Accuracy In Question<br />Feb. 14, 2010<br />In-Store Implementation Network<br />4<br />Intro<br />n=176<br />[ SN, Mar. ...
Lack of Measurement<br />Feb. 14, 2010<br />In-Store Implementation Network<br />5<br />Intro<br />[ CPGmatters Nov. 17, 2...
Industry Demands Improvement<br />Feb. 14, 2010<br />In-Store Implementation Network<br />6<br />Intro<br />Which of the f...
Compliance Gap<br />7<br />In-Store Implementation Network<br />Feb. 14, 2010<br />Intro<br />35% indicated no process to ...
Methods Employed<br />8<br />In-Store Implementation Network<br />Feb. 14, 2010<br />Intro<br />Among Those Who  Say They ...
Promotion Breakdown<br />Approximately 50% of authorized retail promotional displays are not erected or erected late…<br /...
Excess Shelf Stocks<br />An estimated 86% of stock on hand in food stores reflects quantities in excess of seven days of s...
Out of Stocks<br />Shelf-level oversupply coexists with an intractable out-of-stock problem amounting to 8.3% overall, and...
Bottom Line<br />The ISI Sharegroup estimated the total cost of sub-optimal merchandising performance is at least 1% of gr...
Search for Solutions<br />It’s time for an ISI Industry Initiative<br />Together we can illuminate the “black hole”<br />C...
The ISI Sharegroup Story<br />Feb. 14, 2010<br />In-Store Implementation Network<br />14<br />ISI Back Story<br />Formed i...
The ISI “Working Paper”<br />Feb. 14, 2010<br />In-Store Implementation Network<br />15<br />ISI Back Story<br />Published...
Fast-Forward: The ISI Network<br />Feb. 14, 2010<br />In-Store Implementation Network<br />16<br />ISI Back Story<br />
ISI Defined<br />Feb. 14, 2010<br />In-Store Implementation Network<br />17<br />Implementation<br />Plan Actions<br /><ul...
What is required
When action is required
Who will take the action</li></ul>Do The Work<br /><ul><li>Coordinate the players
Handle exceptions in real time
Includes communications</li></ul>Measure Outcomes<br /><ul><li>Verify compliance
Report current store conditions
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In-Store Implementation

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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 performance of merchandising, marketing and promotion.

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In-Store Implementation

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

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