Although D2C and e-commerce have provided increasingly larger outlets for consumer goods brands to serve products to consumers in recent years, physical retail has always been the best way for brands to show off who they are.
Retail execution - the process by which brands ensure products are effectively stocked, displayed, promoted, and sold in retail outlets - is a key component for the retail industry. Brands, distributors, and retailers alike play important parts in developing strategies and optimizing execution. This process grows the retail industry and ensures consumers have an increasingly delightful,
Retail execution has grown tremendously since the early days of modern retail stores in the 19th century, and is now an impressively productive, data-driven, omni-outlet process that has brought brands, retailers, and consumer value to new heights.
We'd like to share our understanding of the history of retail execution. It's a story of an industry that has started from humble beginnings to reach unprecedented heights and and importance in the modern consumer world. Despite retail execution driving $200 billion in spend every year in a dozens-of-trillion retail market, this story is not told often.
Retail execution traces its roots to the earliest human civilizations, where suppliers competed for visibility in bustling marketplaces. In ancient Greece's agora and Rome's forum, merchant suppliers used simple tactics to stand out: arranging goods attractively, leveraging prime locations near entrances, and building reputations for quality. These merchants relied on word-of-mouth and consistent craftsmanship to foster loyalty - what we might now think of as brand equity.
The introduction of coinage in 7th-century BCE Lydia revolutionized execution by enabling standardized pricing. Because suppliers could now quantify value, trades could be negotiated more efficiently, and reach expanded in currency-based economies. Execution remained localized, constrained by the physical limits of market squares and the labor required to transport goods.
Until the industrial revolution, most goods continued to be produced locally and sold directly by craftspeople. Bygone were the market squares of old - small general stores began to take hold, and larger markets and fairs provided opportunities for merchants to expand their reach.
The 18th-century Industrial Revolution changed everything, and supply chains were at the forefront. As mass production and distribution became possible, manufacturers began supplying volumes and locales of consumers previously unimaginable.
This ignited the challenge of what we often think of as retail execution today - how could suppliers ensure proper handling and presentation of their products when they were no longer personally overseeing sales?
Suppliers chose different approaches. Singer Sewing Machine Company (founded 1851) created their own retail network, operating 2000 company stores globally by 1880. Each store followed rigorous guidelines for product merchandising, demonstration, and customer service.
Other suppliers negotiated directly with retailers to secure prime placements and product treatment. Procter & Gamble's 1879 agreement with wholesalers to stock Ivory Soap hinged on P&G's ability demonstrate its purity and consistency, and then for retailers to promote the “It Floats” and “99 and 44/100 Percent Pure” taglines. Suppliers began to standardize packaging so they could be easily recognized (think of Coca Cola's signature contour bottle). Branded merchandising materials like containers, signs, and display cases began to be set up in stores. Representatives would help train shopkeepers to highlight product benefits, and perform store visits to monitor inventory.
Retail stores as we know them today are barely a century old. Stores were shopkeeper-attended, requiring consumers to order from a pharmacy-like counter until 1916, when Piggly Wiggly introduced the first self-service outlet.
Products now needed to sell themselves, rather than relying solely on store staff recommendations. Standardized, recognizable branding for a product was now essential. Competition for limited shelf space intensified.
The importance of brand representatives grew akin to that of modern merchandising teams. The Heinz company pioneered the “specialty salesman”, who visited stores not just to take orders, but to arrange displays, check inventory, and ensure the best products rotated in.
CPG brands began producing detailed merchandising guides for retailers. Procter & Gamble's documentation in the 1930s included instructions for shelf arrangement and building product displays. Kellogg's began mapping shelf layouts to maximize cereal visibility. These brand-provided materials were a precursor to modern retailer-directed planograms.
As stores consolidated into chains, retailers' power grew. Suppliers, empowered by national chains and advertising campaigns, built generational brand identities.
The relationship between retailers and brands began to take hold of an optimization problem - retailers wanted consistency and control of their stores' environments, and brands wanted to ensure optimal presentation of their products.
World War II temporarily disrupted retail as manufacturing capacity was curtailed toward the war effort, and rationing limited consumer goods. However, the organizational and logistical advances already made would soon take retail to new heights.
The post-war economic boon caused consumer demand to soar, and retail dramatically expanded. Supermarkets began popping up left and right, discount stores began emerging, and shopping malls centralized diverse retail experiences for consumers. This wide breath of retail outlets required new innovations in retail execution.
Brands began to build field sales teams focused primarily on retail execution. These teams would
General Foods, Colgate-Palmolive, Procter & Gamble, and many more invested heavily in field sales organizations. Brands recognized that superior in-store execution provided significant competitive advantage. By the 1960s, it was not uncommon for a consumer goods company to employ thousands of field reps visiting stores regularly.
Brands began collaborating with academics and researchers to understanding consumer behavior and build scientific approaches for merchandising. Studies were conducted on store traffic patterns, the effect of packaging on purchase decisions, and the effectiveness of various displays for different product categories.
These studies led to the emerge of category management, where entire product categories, not just individual items, would be optimized. Coca-Cola and Frito-Lay developed systems for arranging entire beverage and snack sections.
Despite a robust field sales network, information at the store level would often not be acted on fast enough. Field reports were completed on paper, and could take weeks to be processed and analyzed. By the time issues were spotted, the window to correct them had often already passed.
The ever-growing retail landscape made comprehensive coverage nearly impossible. Even the largest field sales teams couldn't visit every store frequently enough to maintain flawless execution. Brands focused on high-volume locations, leaving smaller locales with minimal support.
The dawn of commercial information technology saw tremendous application in retail and rapidly optimized many pain points.
Following the first scan of a UPC barcode on a pack of Wrigley's Juicy Fruit gum in 1974, digitized inventory and delivery systems proliferated, reducing out-of-stocks by double-digit percentages. Brands and retailers now received more accurate, timely sales data. Promotion performance could be measured more precisely.
Data exchange and retail tracking services, driven in part by Nielsen and IRI, spurted collaborative efforts that have grown into today's category management programs. Retailers and brands would jointly plan promotions, coordinate inventory replenishment, and negotiations became more metric-driven.
As mobile technology developed, fields reps began equipping handheld units and early laptop computers. Frito-Lay's sales teams began using handheld computers in the early 1990s, allowing reps to place orders, record store conditions, and access sales data in a digitized format.
Information would be relayed and analyzed systematically. Store-level issues could be identified and addressed in days.
Early horizontalized retail software, Nielsen's Spaceman and Symphony's Apollo, developed specialized software for optimizing product assortment and placement. Planograms could be created based on sales data, shelf space allocation was optimized, and category arrangement was optimized based on brands' data-backed recommendations.
Brands were now able to demonstrate the benefit of specific product placements with data-driven merchandising strategies. However, implementation was still a challenge. Planograms still needed to be delivered to every store, compliance required manual review, and there was often a significant lag between planning and execution.
As internet connectivity grew in the early 2000s and cloud computing began to take hold, real-time monitoring and response became viable. Field reps started using digital route plans, check-in systems, and mobile audits. Photo capture lessened the burden of compliance. Reporting dashboards could now update in real-time, helping brands and retailers understand trends day-by-day.
The rise of SaaS saw platforms like Repsly and Salesforce IQ enable field teams to log store visits, capture photos, and report inventory levels in real time.
Each wave of technology increased the granularity and precision at which brands and retailers could quantify the sales impact of secondary displays, promotional compliance, out-of-stocks, and voids.
Electronic Data Interchange (EDI) systems evolved into sophisticated meshes. Retailers could provide daily, or even hourly, sales data to brands selling into their stores. Inventory levels could be monitored continuously, and orders could be automated electronically. Promotion compliance could be monitored by analyzing point-of-sale data.
Walmart pioneered capabilities like these through Retail Link, and other retailers adopted similar platforms shortly after. The coordination gap between supply chain management and in-store execution shrank and enabled rapid resolution.
This increased visibility and ability for rapid resolution empowered brands to develop “perform store programs”. These initiatives defined ideal execution conditions for consumer goods, implementing global standards for product availability, shelf placement and space allocation, promotional display placement, and perishable product condition requirements.
Scoring systems for retail execution were developed, creating accountable metrics for brands' field teams and retailers' stores. High performers could be uplifted, and systematic issues could quickly be identified and addressed via targeted programs.
Data technology experienced a revolution in the 2010s, starting with commercial applications of big data, followed by machine learning and symbolic AI, deep learning, and most recently generative AI.
Companies like Trax pioneered the application of image recognition technology to automatically spot and analyze out-of-stocks, compliance issues, and share-of-shelf metrics.
Predictive algorithms forecasted potential execution problems and supply chain shortages before they occurred.
Route optimization ensured the best use of field reps' limited time and deployment to locations with the greatest needs. Natural language processing extracted insights from field reps' notes on store visits.
Sophisticated anomaly detection and learning models could find subtle trends and correlations between specific retail execution initiatives and sales performance.
Data science has grown to be key in retail execution - modeling can guide sales teams' execution strategy and resource allocation.
The traditional model of brand-employed field reps has been supplemented by new approaches that lowered costs and increased flexibility in deployment.
On-demand merchandising services began to take hold, giving brands and reps more flexibility in resource allocation. These services are often crowdsourced, enabling rapid deployment of large teams for specific execution needs.
High-touch retail execution is now accessible to smaller brands that cannot support full-time field teams. Retail execution can now be temporally and locale adjusted in near-real-time, based on seasonal needs and activation events.
As e-commerce has grown, brands have added digital monitoring into their execution systems and created specialized teams for digital touch points.
Retail execution is far from reaching a limit in evolution. It's difficult to guess the next disruption, but we see several emerging trends.
The first is autonomous retail monitoring. Out-of-stocks and voids continue to be an evergreen issue that limit the throughput of brands and retailers both. In-store monitoring technologies like shelf-scanning robots, camera systems with computer vision, smart shelves with weight sensors, RFID-based product tags, and electronic shelf tags aim at limiting drift in digitized inventory and limiting the likelihood of voids. Increased rollout of these issue-detection mechanism will shift the focus to rapid response and preemption of future issues.
The second is tighter integration between systems that have been historically separate. A lack of seamless information flow between the end-to-end chain and the temporal steps of planning, execution, and management has limited visibility and created certain gaps in retail execution.
At the forefront is the traditional disconnect of information flow between the supply chain and store-level execution. Distribution challenges caught at the store level often times fail to flow upstream without considerable intervention, but can be a tremendous blocker for brands and retailers alike.
We'll start to see consumer insights, shopper marketing research, and e-commerce data inform real-time retail execution adjustments. A wealth of high-quality, digitized omnichannel data supplements behavior in physical retail, and we'll see it uplift brands and retailers alike.
Finally, we'll see retail execution hyper-customize to target consumers. Displays dynamic to shopper demographics, and personalized promotions tied to specific in-store locations now provide a specialization and return on investment previously impossible. Custom planograms tailored to purchasing patterns of individual stores, and online space allocation adjustments will begin to take shape.
Retail execution isn't going away, and superior retail execution continues to drive competitive advantage for brands. The fundamental goal - perfect presentation at point of purchase - endures as brands develop products that delight consumer. Regardless of how retail evolves or what technologies we see pop up next, retail execution will be at the forefront.
At Treater, we know that retail execution among the most challenging aspects of a sales organization. We meticulously apply foundational technology and real-time store level insights to drive sales and scale retail execution for your brand. We'd love to hear about your experience with retail execution - you can always email us at [email protected] or book a demo with us.
