Retail execution is the set of practices and enabling technologies responsible for the complete and timely implementation of store programs, standards and directives at store level.
This article sheds some light on the purpose, scope and best practices of retail execution. The intended audience is merchandisers, retail operations professionals, area sales professionals, consumer packaged goods manufacturers as well as wholesalers.
The Purpose and Scope of Retail Execution
The purpose of store execution is to ensure that merchandising, operations and loss prevention programs are implemented on time, in full, in all locations. Store execution is known to drive sales, cut costs, cut risks and increase customer satisfaction.
The benefits of retail execution are substantial. For example, meeting deadlines, completing restock, and executing displays and marketing plans, retailers can increase same store sales by 3.7%!
The scope of retail execution is largely driven by the head-office departments responsible for key store functions: merchandising, operations, loss prevention and training.
Merchandising execution consists primarily of shelf execution. That is, planograms and pricing as well as execution of seasonal programs and promotions. This includes store signage, special displays and ads, seasonal pricing and labels and sales associates’ awareness and compliance with in-store programs.
ROI: The total cost of sub-optimal merchandising to the U.S industry is approximately 1% of gross product sales.
Refer to the Merchandising category for checklists, how-tos and best practices for merchandising.
Loss prevention is focused on asset protection, cash handling, physical security (cameras, safes, lockers, etc…) and accurate financial reporting.
ROI: On average, retailers lose 1.5% of gross sales to “shrink” annually. Consequently, a loss prevention audit program protects your bottom line.
Refer to the Loss Prevention category for checklists, how-tos and best practices for loss prevention.
District/cluster/sales managers and consultants are exposed to all facets of store operations. They play a pivotal role in the long-term success of a retail business.
Over and above their shared (or full) responsibilities for merchandising execution and loss prevention, they also inspect and advise on general appearance, presentation, cleanliness, customer service, back of the store, store safety, hiring, financials, training and more.
ROI: Ensure that standards are understood and implemented, that products are prepared and displayed correctly and that the general presentation, cleanliness, orderliness, and safety of the store is conducive to a positive customer experience.
Facets of store execution
Store execution is multi-faceted and consists of a number of subareas. Here are fours facets of store execution.
Standards documentation, dissemination and training
For example, an operations manual or standards guide, a set of diagrams, photos or planograms. When execution software is in place, the “standard” being documented and communicated is often the same as the standard used for the audit and verification. As a result, the audit is a continuation of corporate communication and training.
Audit and ensure that standards and best practices are implemented on time, in full, in all (applicable) locations. Remember to note discrepancies. Most important, assign responsibilities in the action plan so you can track and monitor resolution.
While individual situations vary, an operational retail audit often addresses some or all of the following areas:
- Store exterior
- Presentation and Merchandising
- Products and Preparation
- Service and Speed of Service
- Personnel and Training
- Security, Cash Handling and Loss Prevention
- Drive-thru (if applicable)
- Back of the Store and Inventory
For more information about retail audits, please refer to How to Build A Retail Audit Checklist.
Task are a complement to the audit process. Assign a task to one or more recipients. For instance, assign a task to a store manager, assistant manager, or department manager. Specify a target date and include best practice image so everyone knows what to do. Last, track execution and completion.
Execution entails the availability of reports to precisely track what is completed and what remains outstanding. Above all, reports must identify trends and repeat unacceptables. Additionally, reports must be capable of finding patterns and readily identify the best and worst functional areas, regions, stores, and/or operators/managers.
Store execution technology
Should you buy store execution software or build your own? The factors that need to drive your decision are the following:
- Return on investment
- Time-to-market and
- The value and benefits that you will derive from the software you chose.
A complete discussion on the economics of buying vs building your audit tool is available at Retail Audit Software: Buy vs Build.
Execute internally or outsource?
Some companies, like Bindy, sell turn-key mobile and tablet friendly software for retailers, manufacturers and wholesalers to execute their programs, audit their own stores and assign tasks, internally. Other companies offer a “merchandising service”, akin to a mystery shopper service, and send individuals under contract to audit your stores.
Here are the differences:
Execute internally: You should conduct audits internally if you have the resources to do so, want to control quality and/or don’t want to outsource a core competency like store execution.
Outsource execution: You should conduct audits externally (outsource), if you lack the resources internally and have no concern with the quality and reliability of an outsourced service.
Store execution best practices
Store execution can be achieved by focusing on 10 core principles:
- Action plan
- Continuous learning
- People and tools
- High expectations
For a description of each, please refer to Ten Ways To Improve In-Store Execution.
The Definitive Guide to Retail Audits
Last, if you want to know more about audits, then this comprehensive guide to retail audits is for multi-unit retailers is for you. This guide is for retailers in industries like restaurants, convenience stores, pharmacies, spas and clinics, telecommunications, and alcohol retailers. Similarly, this guide helps parking operators and manufacturers or distributors of consumer packaged goods.
If you need to collect or validate data in stores, this definitive guide to retail audits is for you!
OTHER RETAIL EXECUTION RESOURCES
Refer to Retail Execution category for how-tos and best practices for retail and hospitality execution of brand standards and programs.
OTHER RETAIL TASK MANAGEMENT RESOURCES
Refer to the Retail Task Management category for how-tos and best practices for retail and hospitality task management.