Scott Hill

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5 Ways to Get More from Your Merchandising Audits

By Scott Hill

retail-shelf.png

So, you’ve revamped the way your field reps conduct merchandising audits. Now you’re using mobile software to track compliance from product facings and out-of-stocks, to planogram and promotional verification. You’re accounting for all of the merchandising variables… or so you think.

But what about those other store variables that may affect your bottom line? Are your field reps accounting for those as well?

Here are 5 things your reps should document while conducting a merchandising audit.

  1. Neighboring Products
    Two things don’t exist in a vacuum: Art and CPGs. What products are next to yours? This is another variable to account for when determining the best shelf location for your product. Don’t forget to snap a photo!
  2. Marketing Materials
    These materials go beyond the in-store promotions your team created. It can include promotional displays, stickers, posters, signage and radio spots. If you’re paying for this extra exposure, make sure your retail partner is in compliance. A feature like GPS is especially helpful for gathering individual store feedback.
  3. The Premises
    Maybe you’re a company with a food product or beverage, and you’re relying on the retailer to keep it clean and orderly. You have every right to monitor their compliance. Is the floor or restrooms dirty? Are the refrigeration and lights working? Property inspection should be part of your merchandising audit. Problems that extend past your company can be communicated in a professional way, so long as they are reported with photographic evidence.
  4. Knowledge of Average Store Employee
    Just out of curiosity, does the average employee know your product? Can they direct a customer to the correct promotion? Again, this could be more of a retailer issue than a merchandiser issue, but it could be affecting everyone’s bottom line. Be sure to ask your retail partner if you can question their employees in the field. There’s no need to make it the inquisition either—a couple of simple “yes” or “no” questions in your custom-built form will suffice.
  5. Follow Up
    You’ve complete the merchandising audit, so now what? It’s time to assign tasks from your findings. Hopefully your software as real-time exception notifications as well as the ability to assign tasks based on those notifications. Compliance becomes much easier when tasks are assigned to specific stores and senior management can track their progress by region, district, or team.

To watch a video overview of Zenput and learn how the mobile app integrates with CPG operations, click here.

Topics: Retail, CPG

Drone vs. Ground Delivery: Where Does Convenience Retail Stand?

By Scott Hill

amazon-prime-air.png

You may remember the classic line from “A Christmas Story”: You’ll shoot your eye out, kid! A 2015 version might be, “You’ll take a power line down, kid!”

Drones are increasingly in demand, in fact topping eBay’s list of The Hottest Holiday Gifts of 2015. They’ve captured the imagination of kids and adults alike. Now, these remote-controlled flying devices are also on the radar of today’s largest companies.

Amazon delivery drones will soon be taking a test flight in the city of Chiba, Japan, where the government declared the city’s airspace a deregulated zone. Meanwhile, Google’s parent company, Alphabet, wants to begin delivering packages via drones to consumers by 2017, while Walmart has applied to U.S. regulators for permission to test drones for home delivery.

These companies will have to overcome many hurdles, given the Federal Aviation Administration’s strict regulations on American airspace’s. Drone delivery may be a reality in Europe first where companies will find a more relaxed regulatory environment. But according to one aerial vehicle interviewed by Time, U.S. customers shouldn’t hold their breath. He foresees drone delivery being as common as Fedex or UPS by the late 21st century. In other words, he doesn’t think we’ll be alive to see it!

It also raises the question, by the time drone delivery becomes legal and regulated, will customers still care? Will some new innovation have taken its place?

The Immediate Future is Better Logistics

The other day, a friend of mine posted on his Facebook, “Should I tip the Prime Now driver for delivering a $1.89 Powerade?” I read, laughed, and knew that the future had arrived. (If you research this topic, you’ll see this is up for debate. )

In the immediate future, ground logistics take precedence. Instead of looking to the sky right now, c-store retailers would be better positioned to keep their eyes on the road. They should start to study companies like UPS, who are investing big money in technologies like Orion that mathematically determine the most fuel efficient ways to deliver goods.

7-Eleven has taken an early lead on home delivery, partnering with startups DoorDash in five cities and Tapingo in college markets.

Here are two important questions convenience retailers need to consider when thinking about delivery:

  1. If you were to offer a delivery service, would you be able to move goods from the floor quickly and complete the order accurately?
  2. Even delivery services from Amazon Prime Now take an hour or two. Is it going to be possible to reduce that window to the amount of time it takes an employee from the corner store to deliver?

That’s where convenience stores are uniquely positioned and can profit in the short and long term. Geographically, they have more locations and can beat larger retailers, Internet or big box, in a foot race.

If your convenience store network can handle it, you may want to start weighing your options for local delivery. Buy the drone for the office this year, but consider buying into technology that can help you understand your operations better.

Topics: Retail, C-store

C-Stores Need to Compete in Health & Beauty Care

By Scott Hill

health-and-beauty-care

I was about to sit through a book reading by one of my favorite authors, and all I could think about was my dry lips. I needed a ChapStick, pronto. Once you feel your lips are chapped or your breath is bad, you can’t stop thinking about it. It’s so distracting! I had a few minutes before the show started, so I walked to the closest store—a 7-Eleven. Before I left, I also bought a bag of M&Ms. I was a happy camper for the rest of the evening.

Despite channel blurring, convenient stores still trail their mass, drug, and dollar store counterparts in the health and beauty care (HBC) category, according to a recent Convenience Store Decisions report. C-stores need to do something about this; it’s too good of an opportunity to pass up! As CSD points out—and as I know from experience—time-strapped customers don’t have time to wander for a Chapstick or a couple of aspirin. C-stores have a clear geographic advantage in that regard; they’re often the closest store.

A Growing Category…With Small-Sized Products

According to research by Mintel, total HBC retail sales are expected to increase 12% from 2014 and reach $42.5 billion by 2019. As CSD reports, many retailers are having success with smaller-sized products. Cosmetics maintain the highest market share at 25%, and some retailers report success with eye liners, lipsticks, hair sprays, and small-sized conditions. The strategy of offering travel-sized products for a lower price also works well for feminine hygiene products, headache powders, and even diapers.

Retailers also report that placement is key. Some reserve a small amount of space at the front of the store with recognizable brands.

The Case for Private-Label Products

In time, more convenience store retailers could develop their own private-label HBC brands to profit more from the category. Ric Anderson, managing partner of Retail Think Tank, says that c-stores can succeed if they take the time, effort and strategy to build private brands that mean something to the customer.

These products should also be in different section of the store with different visuals—a destination rather than a point-of-sale grab. By under-pricing national brands, private-label products can create a value that the customer understands and accepts.

In order for c-stores to even consider this option, they would have to have a very firm grasp of their retail metrics, including inventory control, SKUs, and product facings. Store operators would have to know what products are moving faster than others, and how customers respond to product placement in the store. They would also have to account for changes in their store planogram, and how growing HBC might affect other categories in the store.

So yes, there’s a clear opportunity here for c-stores—but only if the process to get there does first!

Topics: C-store

4 Crucial Elements of Verifying In-Store Promotions

By Scott Hill

sale-collage

You see that stuff over there? The stuff in the box? Yeah, I'm gonna need you to set that up... Looks good. Thanks.

That's the kind of conversation I fear is happening in retail stores across America. Just the thought of it is enough to keep me up at night!

How does your store verify the correct materials at the correct store at the correct price and at the correct time? There are too many variables here that could go awry.

Let's break it down to see areas of improvement:

1. The Materials
Is there enough product? Are the product facings correct? Unfortunately, it's more complicated than just receiving the SKUs. An in-store promotion may require some assembly, from a cardboard display to the reorganization of shelf space. These changes must be done according to planogram.

How does it look now? Request that your team members take a photo to verify the correct setup.

2. The Store
It's a two-sided coin. On one side, the CPG company or vendor needs to track materials and compliance with set-up. On the other side, the retailer should know its own rate of compliance across the chain. Both parties should be able to call up this information quickly and pinpoint non-compliant stores.

3. The Price is Right?
Imagine if the game show had a question mark after it.There's no room for guesswork when it comes to the pricing of promotional merchandising! That's why there are product UPC readers. The right program can easily report back on a SKU.

4. The Correct Time
Customers will come to your store looking for a specific item on promotion. You have to be prepared. If a rollout is supposed to take two weeks, it can't take three. This applies to retail food establishments, as well. Menus or digital menu boards must be updated. Each store promotion should have the same start and stop time. Again, you need a system that can easily show you non-compliant stores vs. compliant stores.

The Takeaway

In a recent post about food quality, my colleague Jennifer warned against the "set-and-forget" mentality. I'd like to borrow the phrase and apply it to in-store promotions. Diligence is what sets apart winners from champions in the retail space.

The only way to be diligent in a brick-and-mortar business is to get out in the field and share insights across your network.

Learn more about the advantages of Bring Your Own Device (BYOD) and real-time exception reporting by clicking here.

Topics: Retail

Bridge the Gaps in Planogram Verification With Zenput

By Scott Hill

choban-yogurt-facing-1

A planogram is a visual diagram that details where every product in a retail store should be placed. No detail is spared when creating a planogram. The schematics usually present a flow chart for the particular departments or sections of a store, and what aisle and what shelf each product is located. A planogram also shows how many facings are allocated for each SKU.

What does a planogram look like?

It can be as simple as a photo of a preset section or more detailed with numbered peg holes and shelf notches. Of course, the complexity can vary by the size of the store and the needs of the retailer.

See Also: How to Implement and Verify a Planogram

Other than helping with product placement, what is a planogram’s purpose?

Here are the two realities of retail in today’s world: 1. Competition is increasing. 2 Channels are blurring. A planogram assigns selling potential to every square foot of space, helps to maintain tighter control of inventory and can serve as a effective communication tool for staff-produced displays.

However, planogram creation doesn’t occur in a vacuum, nor does planogram verification.

Zenput bridges three gaps in retail execution:

  • The gap between creating a planogram and verifying it.
  • The gap between planogram verification and identifying actionable results.
  • The gap between identifying actionable results and carrying them out.

With Zenput, a planogram audit is carried out in four steps:

1. On their desktop or mobile device, a senior manager uses Zenput’ flexible platform to create the Planogram Audit Form  with prompts and fields of measurement. Some questions may be simple “yes” or “no” responses, while others may require an employee to input a price or scan a barcode. Ideally, the planogram audit also requires photos of a completed promotional display.

2. The senior manager attaches the visual planogram for reference. There’s no need to email or print out copies; this file is accessible on Zenput’s cloud-based platform.

3. The senior manager uses Zenput to create a new planogram auditing project with a deadline. The task of verifying the store planogram is assigned to all store managers. The senior manager can track submission statistics, and Zenput’s integration with Google maps pinpoints tracks when and where each submission occurred.

4. Senior managers can verify planograms once the forms are submitted. Real-time exception notifications can alert the retailer to a problem in a store. For instance, if a store in the network does not submit photos for verification, the senior management team will be alerted to find out why. Or, perhaps photos were submitted but the senior manager notices something is awry in the product display.

Either way, auditing the planogram results in actionable insights. Error in retail execution can be addressed that same day, rather than waiting for a weekly sales report to reveal problems in merchandising strategy.

Sample Planogram Implementation Form

Topics: Retail, C-store, CPG

CPG Industry: Do You Know The Status of Your $300B?

By Scott Hill

back-to-school-promotions

Did you know that each year the consumer packaged goods (CPG) industry spends $300 billion on trade promotions? According to a Data Informed article, that’s more than 17 percent of revenue at an average CPG company and nearly twice the marketing budget.

With the stakes that high, business must be booming at these companies, right? Think again: More than half of all promotions fail to deliver a positive return on invest, and many lose 50 cents on the dollar.

Let’s face it. Promotions can either be a gigantic success or a colossal failure for your bottom line. Or, maybe they fall somewhere in between, making the executive team wonder what could have been done differently. It’s time to take the guesswork out of promotions. And no, I’m not talking about running point-of-sale software after Week 1. I’m talking about finding out what’s going on in your stores at any time.

Think of CPG Promotions Like Social Media

The human race is connected to each other through social media in ways that have never existed before. At any given moment, you know if your best friend is dating someone, what she ate for dinner, or how annoying her commute was. It’s time the CPG industry starts treating promotions like a social media experiment. Spy on your promotions. Gossip about them with your team. Try to tweak them, like you would crop that terrible photo of yourself or edit that misspelled comment. It’s time we start looking at promotions through the lens of human behavior and all of our glorious imperfections.

Why wait to learn from mistakes when you can jump in and fix the issues that are affecting your bottom line? It just makes more sense to utilize real-time data, and it’s feasible with 21st century technology, including mobile devices.

Just like a digital company launches social media campaigns, test campaigns with your new products. See what works before rolling it out across your network, and use that valuable time to adjust the offering.

Even on your corporate social media account, you (hopefully) wouldn’t let a week go by without checking your messages. Don’t let the same interval of time pass before learning about your promotions from the field.

Topics: CPG

Prevent C-store Robberies With Regular Security Audits/Inspections

By Scott Hill

c-store-robbery

There may be some people resigned to the fact their convenience store is bound to get robbed. That’s not a completely unfounded speculation when the FBI reported in 2010 that nearly 22,000 gas station and convenience store robberies, or roughly 1 in 10 c-stores, explains Terry Lambert of the CBC Learning Center.

It’s just the nature of a store that’s open 24 hours a day, seven days a week. While many c-stores do send the message of being totally accessible, the neon “Open” sign shouldn’t be thought of as a beacon for crooks. Convenience store managers definitely have the ability to help prevent robberies if they take appropriate security measures.

According to a study published in 2007, c-stores have certain characteristics that make them prone to robbery. They include:

Operating Hours
A store that’s open 24 hours a day tends to attract troublemakers at night and in the early morning hours.

Interior Store Layout
Visibility is key. Employees need to be able to see the store easily, and passersby, like the police, should be able to see into the store clearly. Brightly lit stores and registers that are visible to the street deter robbery.

Exterior
Poorly lit forecourts and parking lots invite trouble. Poor landscaping or fencing can also help a robber get away more quickly. Install video surveillance and alarms, as well as panic buttons and signage warning that your store is monitoring for theft.

What can be done to help prevent c-store robberies?

Cash-control procedures – Determine the security of your money handling system. Lambert advises retailers to determine how much cash they need on site to conduct their daily business. Be discrete and random about removing cash from registers.

Vendor Schedule
Are you on the list? If yes, welcome. If not, please leave the store. Retailers must keep track of movement in their stores. Lambert tells the story of an innocent clerk who was duped by a fake repairman. The robber claimed to be taking the microwave in for service and walked right out the door never to return. If the store had a vendor schedule clearly indicating who should be there or not, the theft wouldn’t have happened.

Vendor Log
This can increase vendor accountability by keeping track of who visits your stores, when and for how long.

Lambert also advises a c-store robbery report to be on site at all times. That way all the details will be documented in one place immediately following the incident.

This is all sound advice, but it begs the question: What happens to these reports? Are they just kept on file as a “nice to have” or do retailers gain actionable insights from them?

In terms of employee accountability, who is in charge of documenting incidents of theft? It’s a disservice to a network when retailers merely keep this information in a binder on a counter without having a system for sharing and educating other managers.

Better Employee Training
Let’s not forget that retailers must regularly train their employees on how to deal with a robber without getting themselves injured or worse. Comply with the robbers demand so that they get the money or goods they want, and leave. Once the robber leaves, the key procedures are lights on, doors locked, and a push of the panic button or call to the police.

Topics: C-store

Fight C-store Shrink With Your People

By Scott Hill

loss-prevention

It’s my hope that convenience store shrink is one day a thing of the past. The unfortunate reality is that shrink—a shortage of cash or inventory—continues to eat away at convenience store profits.

According to the latest available data in the NACS’ 2014 SOI report, the c-store industry’s average shrink rate for 2013 was 1.05% of merchandise sales. The annual National Retail Federation/University of Florida National Retail Security Survey also helps the c-store industry, and other retail segments, understand shrink and its causes.

What Caused Retail Shrink in 2014:

  • Shoplifting - 38%
  • Employee/internal theft - 34.5%
  • Administrative and paperwork errors - 16.5%
  • Vendor fraud/error - 6.8%
  • Unknown loss - 6.1%

The good news is that there has been a reduction in overall shrinkage percentages since the 1990s. In addition, there has been a decrease in employee theft as a percentage of the whole, said Dr. Richard C. Hollinger, a criminologist who leads the NRF study. In fact, for the first time, shoplifting/organized crime yielded a larger proportion of loss than employee theft, which has always been the larger of the two percentages.

When asked about the most concerning aspect of this year’s survey, Dr. Hollinger said, “There is no single technology—including RFID—that is having a significant effect on shrinkage. Our search for the single ‘silver bullet’ has still not been successful. The fight against shrinkage is going to be won by people.”

3 Ways to Fight Shrinkage With Your People

C-store operators can best fight shrinkage with a combination of their people and technology, from inventory software to mobile forms and checklists. Here are three tips:

1. Create a positive company culture and engage your retail employees. At 34.5 percent, employee/internal theft continues to be a significant problem in the retail industry. Learn how to hire the right retail employees for your organization. Give employees who perform well more responsibility and recognize them. Employees who are engaged and value their organization are less likely to steal.

Use mobile technology to identify problems at the store level as they happen. Employees feel more engaged when their questions/concerns are being addressed in real-time.

2. Streamline processes from checking in merchandise, transferring merchandise, and ringing up merchandise. Train employees on how to properly perform these tasks. Create a vendor schedule to make sure that the right people are in your stores at the right time.

Use mobile technology to fill out merchandise reordering forms, verify promotional displays and check merchandise pricing.

3. Perform regular security audits. DVR technology is still the tried-and-true way to deter theft and catch mistakes during vendor transactions. Monitoring the point-of-sale is also tied to store layout and design. Form a checklist for all the elements of your safety audit, perform it regularly, and communicate the results from the corporate level to the store level.

Use mobile technology to not only remotely log into your stores DVR systems, but also to perform field audits. Is merchandise being accepted the correct way? Is the transfer of money following protocol? You’ll need a district manager to engage store managers and employees and to ensure best practices are being upheld in the field.

Topics: C-store

If C-store Food Sales Are Up, Why Is Industry Optimism Down?

By Scott Hill

health-c-store-food

“Summertime and the livin’ is easy,” Ella Fitzgerald famously sang. This year, retailers have expressed optimism about summer sales and with good reason.

According to a recent retailer sentiment survey released by NACS, the Association for Convenience & Fuel Retailing, more than four out of five retailers say in-store sales were higher in the first half of 2015 compared to the first half of last year. Fifty-five percent of retailers also reported stronger fuel sales so far in 2015 than the year-ago period. Lower fuel sales always bode well in an industry that has better margins on in-store items than at the pump.

The past several years have seen the convenience store industry become a convenience restaurant industry. With cigarette usage hitting new lows, the continuity of beverage promotions and the expansion of food offerings has been a great way to get customers in the door.

More than three in four convenience store retailers (77%) say they are selling fresh fruit and vegetables, with almost six in 10 selling packaged salads and nearly half also selling cut fruit and vegetables. This trend has been ongoing for the past six months. Half of all c-store retailers surveyed said they have expanded their fresh fruit sales, 30 percent have increased their cut fruit and vegetable offerings, and 21% are offering more salads.

It’s not just about fruits and vegetables. C-stores are selling other better-for-you items, including nuts and trail mix, healthy bars, yogurt, string cheese and hard boiled eggs. Retailers surveyed indicated they are most expanding selections of health bars and yogurt.

Of course, this rosy report on summertime food concessions has a flipside and important lesson.

C-Stores Can’t be Complacent in Strategy

Summer is the time for c-stores to make the most out of increased foot traffic from good weather and vacation plans. So while the living is easy for customers, c-store retailers can’t afford to be lackadaisical about their promotions.

While the NACS survey revealed that retailers are very optimistic about their own business prospects, they are slightly less optimistic about the convenience retailing industry (79% down slightly from 80% in the second quarter), and the economy as a whole (61% down from 70% in the second quarter).

At least one retailer expressed concern about an “influx of new competitors in the market.” It’s not just other convenience stores that pose a threat, but also dollar stores, wholesale clubs like Costco and Sam’s Club, and big-box retailers and grocery stores opening smaller format stores with fresh foods.

It’s important that convenience stores remember that their fuel sales continue to give them a competitive market advantage. This is why forecourt promotions and cleanliness of facilities are important for the fresh food upsell.

Summertime is prime time for building the kind of brand that consumers come to trust, whether they are five minutes from home or five hours away.

Topics: C-store

How a Major C-store Retailer Used Zenput to Unlock Hidden Potential

By Scott Hill

mapco-mart

Communication and time efficiency. They can set your organization apart from the competition, or they can prove to be your Achilles’ heel.

How much does your organization value communication?

An equally important question: How much do you value your organization’s time?

Many organizations settle into processes where they accept the status quo of their operations. “Well, it’s always taken this long to verify a promotion, so this is the way it has to be. Thanks in advance for your patience!”

In our experience, so many organizations fail to realize that they don’t have to settle. Cost-cutting and revenue-driving opportunities are achievable now just by making a few simple changes in the way you utilize your existing mobile technology.

Mapco Inc. valued communication and time efficiency enough to change how they used their existing network. It was a significant, yet manageable, change for a convenience store organization with 375 locations spanning eight states.

Before Zenput, it took too long for Mapco’s senior management team to get actionable answers from store-level managers. That was the central communication problem. Executing a routine task, such as rolling out a new product or promotion, would take an average of two to four weeks. The delay in gaining actionable insights was Mapco’s time problem.

Once Zenput was implemented, the missing data was no longer a problem. Mapco slashed operations costs and expanded the platform’s use throughout the organization, from district managers down to store-level managers. As a result, the time it took to gain actionable insights steadily improved.

Instead of waiting for district managers to visit stores, Mapco gave its store managers access to Zenput through their mobile devices. The result was 100 percent compliance in as little as two days.

Notably, Mapco did not have to order new mobile devices for their employees, nor did they have to engage in time-consuming training programs. Zenput’s platform was nimble and easy to use, and provided a centralized place to prioritize the tasks at hand.

Topics: How to be Successful with Zenput, C-store