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Real-time data offers edge in battle for shelf position

Brogie real-time data

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Food and beverage companies have spent more than a century figuring out exactly where and how to present their products in the store to best appeal to shoppers. Since the first self-service grocery store opened just over a century ago, brands have run experiments, testing new types of displays and locations in the store looking for one that fits their understanding of how its consumers liked to shop.

The results of this era of experimentation are all around us: They’re the reason candy is sold next to the checkout counter, why condiments are sold near hot dog buns, and why some beverages are sold cold in a refrigerator instead of at room temperature on the shelf. Overall, the last 100 years of these tests have resulted in a standard playbook that brands use to guide their retail strategy.

But that’s all starting to change.

For the first time in the history of retail, brands are utilizing their own smartphone-enabled workforce to collect data about the way their products are performing in the store — insight that’s empowering them to break from standard best practices and make their own decisions at ­retail.

Before the bring-your-own-device revolution, suppliers had no easy way to amass data about their products’ performance in the store. Retailers didn’t share sales data freely, so vendors would have to wait to review their numbers on a monthly or quarterly basis, often estimating actual sales off the shelf based on the amount of product retailers reordered. Even then, attributing increases and decreases in performance to specific shelf placements, in-store promotions or other merchandising experiments was nearly impossible.

This slow pace meant the stakes were high for suppliers that wanted to spice up the way they presented their products at retail, since a failed attempt could lead to months of poor sales before being caught. As a result, emerging brands were virtually excluded from innovating at retail, since they may not have had the runway to handle a few months of bad sales.

Now, virtually any wholesaler can get immediate feedback on what’s happening on the shelf — from finding new opportunities on end-caps or in the cooler to tracking the results of price cuts and promotions. All they need is a team of reps to visit stores where their products are carried, and a system for collecting and organizing data about their products.

Most brands sold at retail already have those teams in place even if they don’t realize it, since they likely send salespeople or brokers into every account to make sure the shelves are stocked and organized. Vendors should also see these store visits as opportunities for reps to gather and share data about the products they’re selling and ­merchandising.

Once the brand has decided exactly what it wants to know about its product’s performance, all it needs is to equip its team with a few standardized forms and a way to take, organize and share photos of the shelf — all of which can be done directly from the smartphone their reps already own.

Here’s how companies can use that instant insight to get an advantage at the shelf:

• A rep from a potato chip company takes a picture of the shelf and sees that a competitor just dropped its price. Within minutes, the manager approves a “buy one, get one 50% off” promotion for that grocery chain. Two days later, the rep returns with the necessary signage and kicks off the promotion.
• A sales rep for a coconut water company negotiates with a longtime client to move 30 bottles off the shelf into a new cooler. When she visits the store the next week, there are just two bottles left in the cooler. She shares the results with the retailer, and he agrees to double his usual order to keep the cooler stocked.
• An energy-infused chocolate company is having trouble selling its bars in the candy aisle. For one month, it experiments with placing the product next to other energy supplements and tracks the size of the orders needed to keep it in stock. Its velocity off the shelf was much faster next to the energy products, so the company negotiated for a long-term contract on that shelf and boosts its annual sales at that location by 250%.
• A beverage brand introduces new energy and water products to its lineup, and it needs a way to encourage more retailers to buy and stock the new items. Rather than treat every retailer the same, the company’s field reps denote which stores are carrying the new SKUs, as well as which haven’t yet purchased the new items. The company can then prioritize those late adopters with targeted sales campaigns going forward.

Not only is this real-time data giving companies the ability to make smarter decisions at the shelf level, but it’s empowering them to be agile, recognizing and responding to new opportunities and competition in hours, rather than months.

Agile merchandising is giving emerging brands a way to innovate with the way they approach retail, an appealing prospect for businesses run by Millennials who see themselves as disrupters. This way, not only can they experiment with new ingredients or marketing strategies to steal market share from the established giants in their industry, they can get creative in the way they present their products to consumers as well.

Mat Brogie is chief operations officer of Repsly Inc., a developer of easy-to-use mobile apps that enable managers and field representatives to collaborate in real time.

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