According to a Salesforce survey, Consumer Product Goods (CPG) brands lose up to $104 billion in retail sales in the US alone due to poor retail execution. While the figures are staggering, it's not just about lost revenue. It's also about missed opportunities to improve the shopper experience and build and retain brand loyalty. Even the most loyal shoppers can’t buy their favourite products if they’re out of stock or in the wrong location. And maintaining brand loyalty is challenging. A McKinsey study notes that 75% of consumers in the United States changed the brands or stores they typically buy from during the pandemic. Furthermore, 60% of these consumers intend to continue these new purchasing habits even after the pandemic is over. By doing some simple calculations based on these numbers, we can see that there has been a 45% decrease in customer loyalty over the long term.
With physical stores accounting for 85.3% of total U.S. grocery sales and 95.3% in Europe, it makes the most sense for CPG companies to explore advanced solutions for optimising their retail execution.
Retail execution is effectively stocking, displaying, and selling products in retail stores. For CPG companies, good retail execution is important as it helps to maximize sales, maintain brand image, and identify new growth opportunities while improving operational efficiency. In short, retail execution is a critical part of any successful CPG company's strategy.
And one of the cutting-edge digital solutions to optimize retail execution is the use of Image Recognition (IR).
Benefits of Image Recognition Technology for CPG Companies
Image recognition is an innovative technology that can be leveraged to quickly and accurately identify products on store shelves, analyze their placement and positioning, and provide real-time insights into the shopper experience.
In this article, we will look at the top three benefits of using Image Recognition technology for CPG companies based on our experience.
1. In-Store Data Collection
An accurate IR solution can speed up data collection by enabling field reps to collect in-store data quickly. This data is instrumental in providing real-time insights into product performance in stores. This data can be used to identify emerging trends and make informed decisions about product placement, pricing, and promotions to drive growth.
2. Improved Retail Execution
Being capable of providing real-time data on how products are performing in stores, image recognition technology helps CPG companies to identify areas where retail execution should be improved. For example, if the share of shelf is consistently below contractual agreements in a particular region, CPG companies can redirect resources to resolve the issue on priority.
3. Improved Customer Experience
By ensuring that products are always available and displayed in the most appealing way, CPG companies can improve the overall shopper experience. This can lead to increased customer loyalty and repeat purchases.
Accelerate Your Retail Execution Optimization With ShelfWatch
Forward-looking CPG brands stand to gain a lot from digitizing store audits through leading solutions like ShelfWatch.
ShelfWatch is a powerful image recognition tool with 95%+ SKU level accuracy that provides CPG companies with several ways to improve their retail execution. After deploying the solution, CPG companies can optimize product placement and availability, increasing sales.
Also, using real-time data on product performance can help CPG companies ensure compliance with planograms and improve product displays and shelf appearance.
Moreover, one of the key benefits of ShelfWatch is the ability to increase the speed and accuracy of retail audits. By automating the process of auditing shelves, the solution can save time and reduce errors, allowing for more efficient use of resources and building a competitive advantage.
By automating the process of auditing shelves, the solution can save time and reduce errors, allowing for more efficient use of resources and building a competitive advantage.
Six Ways in which CPG Companies can Gain Competitive Edge with ShelfWatch
Here’s how CPG companies can gain a massive competitive advantage after implementing ShelfWatch:
1. Optimize Product Placement and Availability
ShelfWatch provides real-time data on product performance, which helps CPG companies ensure that their products are stocked in the right place at the right time. This results in increased purchases and an enhanced customer experience. Compared to techniques of relying on POS or syndicated data as a proxy for on-shelf availability, using IR data can help CPG companies develop more accurate and nuanced strategies and stay a step ahead of their competition. With IR data, companies can make more informed decisions about what is causing lost sales and take corrective actions to recover them.
Compared to techniques of relying on POS or syndicated data as a proxy for on-shelf availability, using IR data can help CPG companies develop more accurate and nuanced strategies and stay a step ahead of their competition.
2. Ensure Compliance with Promotional Activities and Planograms
ShelfWatch is a valuable tool that assists CPG companies in staying on top of their promotional activities and planograms, ensuring compliance, and maximizing the impact of their marketing efforts. However, companies can go a step further and utilize IR data in correlation with trade promotion data to achieve even greater benefits. By combining ShelfWatch's real-time data with TPO strategies, companies can develop more effective promotion strategies, optimize promotional spending, and ultimately improve their return on investment. This integrated approach can provide CPG companies with a competitive advantage, enabling them to stay ahead of the curve and achieve their business objectives.
3. Identify and Fix Out-of-Stock and Misplaced Products in Real Time
ShelfWatch helps CPG companies quickly identify and resolve out-of-stock and misplaced products, leading to better customer satisfaction and higher sales. This is a significant improvement over legacy approaches used by the industry, which often rely on manual or time-consuming methods to address these issues. With real-time data and advanced analytics, ShelfWatch can help CPG companies proactively address issues and improve their overall retail execution, leading to a competitive advantage in the marketplace.
4. Monitor and Measure Brand Performance Against Competitors
ShelfWatch offers CPG companies the ability to track their brand's performance against competitors, providing valuable insights that can inform future strategies and keep them ahead of the competition. With real-time data and advanced analytics, emerging trends can be identified early, enabling CPG companies to make data-driven decisions that give them a competitive edge. This is a significant improvement over traditional methods, which typically rely on retrospective analysis of historical data. By utilizing ShelfWatch, CPG companies can stay on top of market trends, respond quickly to changing consumer preferences, and make strategic decisions that drive growth and profitability.
With real-time data and advanced analytics, emerging trends can be identified early, enabling CPG companies to make data-driven decisions that give them a competitive edge.
5. Data-Driven Decision-Making Across The Organisation
While IR data is primarily used by field teams to improve their retail execution, it is worth noting that enabling access to rich and granular SKU level data provided by IR can empower other teams and functional units as well. In the below illustration, we have presented some use-cases of the IR data to different teams.
Early adoption of digital transformation tools have proven to help CPG brands remain resilient and immune to disruptive forces. With private labels and emerging brands becoming increasingly competitive, CPG brands can establish a competitive advantage by proactively observing what shoppers experience during store visits.
A highly accurate and cost-effective Image Recognition solution like ShelfWatch with real-time insights is a game changer for the CPG companies looking to improve their retail execution.
With its versatile features, ShelfWatch helps companies on several fronts, from optimizing product availability and placement to improving the speed and accuracy of retail audits and monitoring performance. These benefits make ShelfWatch an indispensable investment for any CPG company striving to achieve business goals in today's highly contested retail landscape.
If you would like to understand how ShelfWatch can help you build the competitive advantages listed above, please get us in touch by sending a request here.