Marketing
3 ways automation helps scale CPG compliance
Audwin Cash, senior vice president, enterprise solutions, Atrius, at Acuity Brands, shares insight on how retailers can overcome the challenges inherent in chainwide consumer packaged goods campaigns. Automating delivery verification, increasing employee efficiency, and enhancing compliance visibility can prove to be very useful tools.
September 9, 2020 by Audwin Cash — SVP, Atrius Enterprise Solutions
Consumer packaged goods contributed $2 trillion to the 2019 U.S. gross domestic product. And while TV advertising, print promotions, digital campaigns, coupon circulars, and similar marketing initiatives all help drive demand, the consumer's in-person encounter with a CPG brand's marketing and product typically happens in store, where it is displayed.
CPG brands invest enormous amounts of effort into designing attention-grabbing displays that communicate product benefits, especially with new products or with focused seasonal items. When retailers comply with vendor placement guidelines, these enticing displays with strong product information can help retailers boost revenue. The reverse is also true; bad execution produces substantial missed opportunities. According to Quri, a retail analytics firm, stores have the potential to lose up to 25% of retail sales because of poor CPG execution. The cost-benefit analysis favors compliance, and not just for financial reasons. Solid retailer and CPG supplier relationships can enhance market share and overall performance. Shoppers shop stores that support the brands they value.
Executing chainwide CPG campaigns has always been challenging. Marketers and store operations both seek to ensure placements are made on-time and in the right places. Relying on front-line associates to do the work reliably 100% of the time has proven ineffective, and third party audits are costly and disruptive. Further, once a campaign completes and results are tallied, there is finger pointing between store operations and marketing over whether a campaign succeeded or failed based on CPG display compliance, since it is impossible to verify timing and placement across the fleet. Too often the brand and the retailer lack the concrete evidence to make campaigns better each time. Automating delivery verification, increasing employee efficiency, and enhancing compliance visibility resolves this scalability challenge.
Easier delivery verification
A McKinsey and Company analysis found CPG vendors could lose more than $5B with unreliable or failed product delivery. How does a CPG supplier verify their retail partner received a complete order of products and display materials on time? Shipper-provided tracking numbers might work, but it is practically impossible to find lost packages in sprawling distribution hubs if those identifying numbers are incorrect. Inserting tracking technology into every container before shipping simplifies verification. CPG suppliers can easily confirm numerous data points, including delivery address, date, and time. On the store side, delivery tracking technology helps warehouse staff better manage operations, and store teams prepare assigned product locations in a timely manner.
Increased employee efficiency
CPG compliance is still a manual, inefficient process for many retailers and consumer-packaged goods suppliers. Physically verifying product placement takes time and costs money. CPG vendor employees spend time planning store visits, traveling to stores, locating the displays under review, logging and reporting their observations to store teams, and finally, traveling to the next retailer to repeat the process. Perhaps more relevant today, manual verification also challenges physical distancing best practices by requiring work that could happen remotely happen face-to-face instead. For example, CPG suppliers still using hard-copy vendor management logs need to engage directly with store staff, perhaps share a pen, or pass the vendor log between people. There's also the risk of human error. Automating verification tasks associated with CPG compliance increases employee efficiency: CPG vendor representatives spend less time traveling from store to store to store; retail employees can focus on customers instead of meeting with CPG suppliers. Automation also creates more accurate data collection and offers safer work conditions for everyone involved.
Enhanced compliance visibility
A lack of transparency over what happens to consumer-packaged goods is the real financial risk. Both retailers and CPG brands need full visibility into the display package journey to manage compliance with placement and duration guidelines. Indoor location infrastructure can help CPG partners can use tracking solutions to verify the number of days packages stay in warehouses, and when displays make it to the sales floor. If team members remove displays before the stated date, tracking data show when it happened. For CPG brands, this information provides valuable insight into how store teams manage displays once the materials arrive on-site. As for retailers, tracking technology helps them demonstrate compliance in real-time to vendors, and if necessary, relay execution challenges as a result of delivery hiccups.
Automation enables both teams to untangle non-compliance in micro-steps. Collecting accurate data along the entire supply chain identifies where an error, or errors, occurred. And even in a perfectly executed compliance process, automation still produces useful data to assess display performance and, therefore, return on investment.
Poor compliance prevents consumers from experiencing product marketing efforts as intended. Relying on manual checks to verify the same CPG guidelines, in thousands of locations, impedes the collaboration that fuels retailers and CPG growth. Data and automation simplify and specify execution. Retailers and CPG vendors can use these tools to gain meaningful analytics and insights into the compliance process. This shared knowledge shapes their collaborative relationships, stimulates mutual success, and fuels industry growth. Regular and transparent communication between both parties is crucial.
Audwin Cash is SVP, enterprise solutions, Atrius, Acuity Brands.
About Audwin Cash
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