In-store merchandising compliance affects virtually every aspect of a retail organization. When you think about it, the success or failure of your merchandising execution influences everything from marketing budgets, advertising planning, supply chain scheduling, sales results, and even customer experience. What does achieving in-store merchandising compliance mean to your brand?
Your rate of successful in-store execution in all your stores is a critical factor that determines the effectiveness of your initiative and attaining that coveted sales lift. In this post we’ll explore three questions you must consider to achieve 100% merchandising compliance with your in-store merchandising execution.
Three Questions to Ask Before Launching Your Next Merchandising Initiative
As a retailer or CPG manufacturer, the accurate execution of your merchandising components is crucial. Here are three issues to consider, brainstorm and discuss with your merchandising team before launching your next program:
1. What Is My Acceptable In-Store Compliance Failure Rate?
Whether you are responsible for the merchandising of fifty or 5,000 locations, when a store is not properly merchandised according to program directives, the results can be very disappointing. The percentage of your stores failing to meet compliance can make or break your program. A recent study by RIS News showed that 44.4% of retailers say that half or less of their stores achieve compliance when merchandising results were measured. Some other studies put the figure at 70%.
At the very least, a low compliance rate erodes in-store sales opportunities. Poor merchandising execution creates a situation where customers will not be engaged and won’t be as motivated to buy. In locations where merchandising materials are never placed or installed you have a 0% chance of lifting sales and your efforts are wasted.
What amount of failure do you tolerate when executing in-store merchandising? 10% – 24% – 60%? At DisplayMax our acceptable compliance failure rate is zero!
2. How Much Will My Execution Failure Rate Cost In Projected Sales?
The lost opportunity costs of this problem can be staggering when you crunch the numbers. If you were anticipating a 5% sales lift from a program and half of your 800 stores were poorly executed, or never even merchandised, you likely fell short of your goals. If the sales lift was expected to average $10,000 per store, that translates into $4 million of sales opportunity put at risk because of poor or no execution.
Another hidden cost factor that comes into play is that it is next to impossible to acquire accurate data to analyze program performance. It’s never comfortable submitting an educated guess to your superiors. How do you know if the merchandising program worked without the ability to measure program performance if half of your stores fail to meet compliance at the shelf?
Without attaining for 100% in-store compliance your merchandising development becomes a shot in the dark.
3. What is the Most Critical Factor Causing My Execution Failure Rate?
Sometimes it is easy to identify the causes of where your program failed. A few examples are delays in material delivery, improper installation, wrong placement, missing signage or components, or the third party rep never shows to perform the work. In other instances the problems are not so clear; store management pushback, program design issues, construction delays, and even confusing installation instructions.
We call these factors “Merchandising Choke Points” and they can quickly increase your failure rate and destroy your program ROI. It is imperative that you thoroughly analyze your program before launch to uncover potential choke points. This one step can dramatically improve your in-store compliance rate and help achieve your program sales goals.
The DisplayMax Difference
At Displaymax, we strive to attain 100% compliance in every project you entrust to us. We fully understand the importance of performing the proper installation and merchandising of your products at all of your locations.
We also are aware how challenging it can be to achieve 100% compliance. Our commitment to our clients is to relentlessly execute until the project is completed as designed and fix problems that occur rather than ignoring them. It really bothers us when things go wrong, so we work hard to make sure that it doesn’t happen.