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Gordon Neil ,

Let's Talk About Retail Execution

At McCurrach, execution in-store is our heartbeat, but it is also a topic that is often under-discussed in the FMCG industry. Strange, considering nothing is sold unless the product is available and visible to a customer at the point of purchase.

For the last six years we have been amalgamating all of our promotional, NPD and range review execution data, which based on our frequency and depth of coverage across over 30 categories, and we’re not afraid to say - is also probably the best guide available on how the large UK Grocers are doing in executing their agenda.

So, here’s our quarterly round up of what’s happening in retail execution across the UK grocery multiples…

How big is the execution gap in-store?

Let’s start with the most natural question; how big is the execution gap in-store? Given the fact that a lot of what a field team do is pre-sell and pre-align stores to ensure activity is executed on day-one, it’s not an easy measure to get. Recently, we undertook a study of just this so we know that promotional display execution averages are as low as c. 50% when the display isn’t a gondola end. Additionally, the entry gap on NPD is typically over 15% (after pre-sell) and the entry gap on range review execution is typically c. 20% (again, after pre-sell).

It is worth noting that all of these gaps are typically less than 3% by the time our field teams have supported the store (most issues are driven by stock not getting to the shop floor or stores not getting round to executing the agenda, all of which are entirely fixable.) So, the execution gap can be large but it’s fixable; good to know. Now let’s turn to the latest quarter.

Will Artificial Intelligence make a difference?

This quarter has seen some unusual activity in retail execution. For the first time since we started amalgamating all our data, Morrisons has shot up the league table. Now, one quarter doesn't a trend make, but it may be an answer to a business and technology question which has been around for some time: will Artificial Intelligence make a difference?

Morrisons have deployed a new AI system to help them with store based ordering and stock management. You may have seen the press articles claiming strong results in improved availability, and we are seeing an effect in-store with a dramatic improvement in execution. Their recent financial results also seem to be in line with this improvement.

At the other end of the scale, Tesco have chosen to remove a layer of their store management team and we believe this is leading to a slight downturn in execution.

As for day to day retail execution there is still a lot to go for. One of the most common questions we get asked is - how much local discretion do stores have? The simple answer is that local discretion is still alive and kicking, for example, 89% of the stores we cover have sited incremental secondary displays in the first quarter of the year. Why? Not every sq. ft. of store space is pre-planned and most stores have the ability to make some local decisions to help drive sales.

We help big brands sell MORE

If you’d like to know more about retail execution or how we could help you sell more through unmissable execution, drop us a line here.

For our part, we’ll keep publishing our insight on retail execution and our teams will keep supporting brands and stores to deliver the best experience for customers.

 

 Source - McCurrach Retail Execution Data (2017)

Gordon Neil is the Development Director for McCurrach and has a strong background in the Grocery sector. Contact him directly here.

 

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