This article sheds some light on the purpose, scope and best practices of store execution. The intended audience is merchandisers, retail operations professionals, area sales professionals, consumer packaged goods manufacturers as well as wholesalers.
Definition, purpose and scope of store execution
Store execution is a set of practices and enabling technologies responsible for the complete and timely implementation of store programs and directives from head-office.
The purpose of store execution is to ensure that programs that are devised by head office are implemented in time, in full, in all stores. Store execution is known to drive sales, cut costs and increase competitiveness and customer satisfaction.
The scope of store execution is largely driven by the head-office departments responsible for key store functions: merchandising, operations, loss prevention and training.
Store execution by department
Merchandising execution consists primarily of shelf execution (planograms and pricing) as well as execution of seasonal programs and promotions (store signage, special displays and ads, seasonal pricing and labels and sales associates’ awareness and compliance with in-store programs). For a complete overview of merchandising execution, please refer to Merchandising Audits: Purpose, Scope and Methods.
ROI: The total cost of sub-optimal merchandising to the U.S industry is approximately 1% of gross product sales.
2. Loss prevention
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.
District/cluster/sales managers and consultants are exposed to all facets of store operations and play a pivotal 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 sub domains:
1. Standards documentation, dissemination and training
This can be 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. This makes the audit a continuation of corporate communication and training.
2. Retail audit
Audit and ensure that standards and best practices are implemented in time, in full, in all (applicable) stores. Note discrepancies. Assign responsibilities in the action plan. 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.
3. Task management
Assign a task to one or more recipients (store manager, assistant manager, or department manager), optionally specify a target date and best practice image, and track execution and completion.
Execution entails the availability of reports to precisely track what is completed and what remains outstanding. Reports must identify trends and repeat unacceptables. Reports must also 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:
- 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 Compliantia, 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.
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.