Why Retail Sales Is All About Operational Excellence

Mila Budeva
Mila Budeva
Nov 30, 2017

Most people would think that sales are driven by teams of sales people. Well, of course this is true in nearly all cases, but there is one case where sales numbers depend more on operations execution than sales activities. 

In modern retail grocery environments with well organised, centralised logistics, orders and therefore headline sales volumes are agreed and planned at a head office level. For example, the job of an account manager at a consumer goods company is to support sales strategies in retail with agreed contracts and payments, process orders, cancellations and returns. However, the successful implementation of these sales strategies does not end with a handshake between the key account manager and customer – in this case, retailer.

The success of retail sales will depend on the success of field and 'store' operations execution. It is up to the field execution teams to ensure that those agreements and strategies are implemented in-store.

 

So, the annual sales plans are agreed and commercial negotiations between HQs are done. Next, sales directors and their IT counterparts at large FMCG companies, selling into the modern trade, need to focus on the organisation, automation and monitoring of retail operations execution rather than sales activities – from merchandising and display compliance to promotional execution and training.

 

For example, out of stocks – not having the agreed products stocked on the shelves – are responsible for 4.1 percent in lost revenue for the average retailer. In North America, the loss of out of stocks is estimated to cost retailers $123.4 billion annually. The majority of OOS are due to “people problems” – frontline workers mistakes, poor training as well as poor visibility over the execution of field operations. Improving visibility over on shelf availability and the execution of merchandizing and planogram compliance activities can help to eliminate losses from missing products.

 

Different tasks, different people, different tools

In FMCG field sales there is definitely a role for sales force automation in direct store delivery, distribution and van sales channels where field personnel are selling products, taking orders and processing invoices. This functionality involves on the fly analytics and other features to help reps sell more, and will require capabilities like penny perfect pricing based on integration with head office systems of record. Such solution deployments will often take many months and the larger CPG companies are spending tens of millions on global roll outs of their mobile SFA systems, often built on the big platforms provided by the likes of Salesforce and SAP. 

 

The problem is, you wouldn't give inside sales people an HR or finance system, so why would you give field staff responsible for merchandising and operational execution a sales solution. These are different tasks, and so should have different people, equipped with the right tools for the job performing them. This poses the question of what steps CPGs need to take to reduce costs and improve efficiency in their field operations.

 

The right people doing the right tasks

Dispatching a field sales representative, equipped with the latest mobile SFA, to perform a simple merchandising activity is not an optimal use of field sales reps’ time or the sales tools they are equipped with. The solution - moving away from one fixed, highly trained field force to a more flexible one. This model of greater workforce flexibility has been enabled by crowdsourcing platforms like Gigwalk and Roamler, providing merchandisers on-demand. A more flexibile labour model allows for tasks to be executed with greater speed and agility and at a better cost. This way, CPGs can maintain a highly trained sales force to sell in DSD and van sales retail channels and can deploy more flexible and specialised workforce models to frontline execution operations. 

 

Crowdsourcing platforms provide one way of doing this and companies can also and do employ their own merchandizing teams. In this instance, they can be provided with tools that provide management with the agility to create merchandising projects; integrate capabilities such as image recognition, augmented reality, push notifications and alerts, to help prioritize tasks in the field; provide guidance on how to fix issues and gamification to incentivize best-practices.

 

The right tools for the right people

What will help to drive field execution representatives’ productivity and efficiency in the field is a solution that is easily configured to their activities and only provides them with the relevant capabilities. A mobile solution with an intuitive user interface - a list of location-specific activities and best practice guidance for each task, capabilities such as digital measurement, augmented reality, data intelligence and gamification and full offline capabilities can make the execution of tasks quicker, simpler and more efficient. All these are features that help reps to execute operations and fix issues rather than sell products, process orders and print invoices.

Here is an example where sales can depend more on operations than sales people. Realizing this and tailoring IT investment and IT and workforce strategies accordingly can save CPGs money, provide employees with a better experience and enable them to deliver better results.

 

 

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