Let’s dive into why it’s so important to pay extra attention to in-store shoppers and look at their behavior and what brands can do to capture their precious dollars.

All About Purchase Decisions

How many decisions are made at the store?

Despite the increase in online shopping, brick-and-mortar retail isn’t going anywhere anytime soon. In fact, while 27% of consumers make an online purchase every week, 40% of consumers physically go shopping on a weekly basis. Furthermore, 70% of consumers count the ability to purchase in a store as impacting their choice of brand and retailer.

So, do in-store shoppers use the internet at all? Yes. 74% go online to do research, see if an item is in-stock, or check store hours, making it imperative that retail suppliers have a strategy to make sure their items are in-stock and up to date.

And for those worried that the “kids these days” will drive a decrease in foot traffic, that’s turning out not to be the case. Gen Z, the most digital generation yet, actually prefers to shop in-store. 81% report that they prefer brick-and-mortar because it helps them discover new products and more than half indicate that it’s precisely because it helps them disconnect from their phones.

The numbers are in folks and they’re looking good for retail suppliers. Even a global pandemic couldn’t wipe out people’s passion for retail therapy. Indeed, it may have fueled appreciation for it.

But what does this all mean for in-store retail strategies? If the foot traffic is there, how can brands capture purchases?

Two Foci for Retail Suppliers: Planned and Impulse

Brands need to have a two-pronged strategy to maximize their in-store sales.

First, they need to prepare to meet customer expectations. For instance, if that customer has gone online and checked to see if a product is in stock and shows up at the store to purchase it, that item had better be in stock. The consequence of it not being in stock? A bad brand experience, an unhappy customer, and a competitor captures those dollars and perhaps all their future business. In other words, risking a domino effect.

Second, brands need to capitalize on impulse decisions and retail therapy shoppers. In fact, 84% of shoppers have made impulse decisions when buying in-store. This is a huge opportunity that brands need to embrace and capitalize on with visual merchandising.

Visual merchandising at its core is making sure your inventory stands out from the crowd via packaging, in-store marketing, and in-store promotions.

But what happens when you have a visual marketing strategy but the retail execution levels don’t go according to your plan?

Retail Execution Levels

Most retail suppliers choose one of two options to meet their retail execution needs: relying on the retailer or partnering with a third-party retail merchandiser.

What do execution rates look like when using just the retailer’s resources?

There’s no one number to point to as it varies retailer to retailer, store to store, and brand by brand. It will even vary from week to week. And the retail labor shortage isn’t helping anything. But what we’ve seen as have other merchandisers is execution rates hovering around 40% when it’s up to just the retailers.

What’s more telling is how brands struggle to have an accurate view of what’s going on with their inventory when it’s in the store and how much (25%) of sales are lost due to poor retail execution.

To understand your brand’s retail execution rate, you need to look at a few factors:

• On-Shelf Availability: is your inventory where it should be or is it in the backroom?
• Endcaps and Promotional Displays: if you secured a promotional display, is that display where it should be? Is it set according to your planogram?
• Retailer Knowledge: is the retailer staff able to answer questions about your product? This is especially helpful for electronics.
• Pricing and Promotions: are the prices on your products what they should be? Are your promotions, like instant redeemable coupons, being placed?
• Planogram: are your products being executed according to your planogram?

You’ll want to track trends over time to get a feel for seasonal changes, consistent gaps, and most importantly – to understand how many sales are missed.

There’s a glaring problem with this though, how can you measure retail execution rates without having a good grasp of store-level activities?

That’s where third-party retail merchandising partners come into play.

How Third-Party Partners Improve Execution Rates

Third-party retail merchandisers like RMS help retail suppliers by conducting store-level audits and inventory maintenance to make sure your sales are maximized. This helps brands trust their retail data and make better decisions based on real numbers, not estimates.

See all of our services here: https://www.rmservicing.com/services/

Increase sales, profit margins, and minimize lost revenue by partnering with a third-party retail merchandiser. Make more strategic decisions based on good data to make sure your brand is prepared for tomorrow and next year.

See if we’re the right fit for your retail merchandising needs!

Get in touch with us today!

The post Maximize Sales: Visual Merchandising and Retail Execution Rates appeared first on RMS.

2022 Retail Trends

The challenges that plagued 2020 and 2021, like supply chain issues and a tight labor market, will persist this year. But unlike past years, suppliers and retailers alike have given up that life will return to “normal,” pre-COVID patterns. This isn’t to say that’s a bad thing. Retail has been facing massive shifts for years now. The current tensions are simply applying more pressure to existing weak spots. This year, we expect to see both suppliers and retailers invest in risk-mitigation tactics, like paying attention to their supply chain and getting more creative about the future of how inventory sells.

Let’s take a look at four main trends and what suppliers should be looking out for.

Trend 1 – Persistent Supply Chain Challenges

Those pesky shipping delays aren’t going away anytime soon. But rather than sit back and hope the wrinkles get ironed out on their own, retailers and suppliers are looking to invest this year in strengthening the lines they depend on. Besides large retailers chartering their own cargo ships, suppliers and retailers of all sizes will work to become more agile this year and minimize risk to their bottom lines.

What this might look like: rethinking where products are manufactured, increasing investment to multiple shipping avenues, and rethinking how to project and meet consumer demand.

Trend 2 – Labor Shortages

Holiday seasonal staffing was down 7.5% in 2021. While not completely unexpected, it is a challenge that retailers will continue trying to deal with this year. Despite perks, higher wages, and other changes to attract retail workers in 2021, health concerns, a competitive labor market, and COVID-19 will continue to result in retail stores not having enough boots on the ground to adequately ensure every supplier’s inventory is set, reset, and accounted for properly.

While there are many factors at play in why labor shortages are happening, the end result is that suppliers must be aware of the reality happening in stores. Retail stores simply do not have the same workforce they did before the pandemic. Even with the best processes and best of intentions in place, retailers will not be able to ensure that your products are set, audited, and cared for once they arrive at stores.

Trend 3 – Inflation

The consumer price index rose 7% in December, the highest in 39 years. It’s not just because the Federal Reserve is indicating that they’ll raise the federal interest at least once this year, for the first time in years. Retailers are also raising prices to save their bottom line from missed sales due to the trends mentioned above and to keep up with the increase in hourly wages across the industry. With more uncertainty in their ability to meet demand, retailers will continue to push higher prices.

This sharp increase in the cost of goods will further put pressure on consumers’ wallets, which could impact how they spend their discretionary income.

The key takeaway with this trend for suppliers is awareness. Be aware that consumers may spend less on non-essential items. Weave that into financial projections and take into account your own cost increases as businesses up and down the supply chain are contending with the same challenge.

Trend 4 – Evolving Retailers

Finally, we’ve been hearing about the changing landscape of retail for years now. With e-commerce and curbside pickup, and pop-up shops, the changes are exciting and persistent. Expect these evolutions to continue, especially ones that will support more agile sales strategies, less labor, and less risk.

Suppliers can work with their retailers to learn what they have in plan and decide if and how to best position their products for sales success.

Why You Can’t Sit Back and Relax Once Inventory Arrives at the Retail Location

Now, for the most important thing suppliers need to know about retail this year:

Do not assume that just because your inventory made it to the store it will be set, reset, or stocked as you want.

This is not us throwing shade at retailers, just being realistic. Retail employees are doing their very best. Unfortunately, because of the decreased number of workers on the floor and the higher demand for curbside orders placed, products on the salesfloor are slipping through the cracks.

The only way to make sure your inventory is poised to sell is to keep an eye on it yourself.

How to Keep an Eye on Your In-Store Sales

Not to worry, it’s much easier to manage your in-store inventory than you may think. And no, you don’t have to go in yourself and walk through the aisles.

The solution? Partner with a third-party service that can be your eyes in the store and, when needed, an extra set of helping hands.

Benefits of partnering with a third-party merchandising service:

• Peace of mind – know exactly what’s going on with your inventory at your retail locations
• Ensure proper sets and resets – if something is awry, your partner can fix it for you
• Maximize sales – make sure your products are on the shelves so they can sell

How can Retail Merchandising Services Maximize Your Sales?

As a best-in-class, third-party service provider, we know exactly what it takes to make sure your products succeed in retail locations.

Our best-fit service for brands looking for an extra pair of eyes and hands this year? Our audit, starting at less than $10 per store.

We’ll make sure that your inventory isn’t forgotten in the back room and that the product that is on shelves and especially those precious endcap locations is exactly how your planogram said it should be.

Get a jump start on your sales and contact us today!

Call us today!

The post Retail Success in 2022: Why You Should Hire a Third-Party Service to Audit Store Resets and Promotional Endcap Sets appeared first on RMS.

What is Phantom Inventory?

Phantom inventory happens when your products appear to be available at a retail store within a retailer’s inventory system but are actually missing or out-of-stock. When you think that your products are available but are actually not, you risk lost sales and lower profit margins.

In one case, a CPG manufacturer lost 5% of its total revenue with one retailer during a large promotion due to Out Of Stocks.

In this age of convenience, consumers expect their desired product to be where they want it: on the shelf where it normally is. If it’s not, they’ll skip the purchase, substitute it with a different product, or delay the purchase. The lower the price point and more commoditized an item, like toothpaste, the more likely they’ll buy from a competitor that has a similar offering. In the worst-case scenario, you’ve now not only lost that single purchase but that customer has now switched brands and you lose out on their future sales.

Phantom inventory can wreak havoc on your sales if there is an automatic reordering system in place with your retailers by making electronic stock appear higher than what’s really available.

For the health of your bottom line, investigate if phantom inventory is happening to your products at every store you work with. Keep reading to learn how to prevent phantom inventory and reduce it if you’re struggling with it right now.

1. Know how to spot phantom inventory.

Understanding how to spot when phantom inventory is occurring is the first step toward solving it. There are two ways to check if it’s happening to you: physical and analytical observations.

First, perform a physical observation. Check shelves, backrooms, and unpacked boxes for inventory not accounted for. For even more peace of mind, hire an external third-party who is objective to come in and help with inventory audits.

Secondly, know the signs of phantom inventory and regularly check for it through analytical observation.

There are three main red flags in your analytics to look for:

1. Inventory turnover is decreasing.
2. Your reporting shows that inventory is available but no sales have occurred at that location over a period of time.
3. Inventory is manually allocated to locations and a rise in sales is observed but then falls back to a “no sales” status.

2. Identify the root cause of your phantom inventory.

If it does appear phantom inventory is happening to you, the next step is to identify what’s causing it. Use this checklist of common root causes of phantom inventory to see which of them is causing you to lose sales.

• Shrinkage or theft – is your inventory mysteriously disappearing? What security measures does the store have in place?
• Receiving errors – is the store tracking every shipment from you properly? Is there a mistake in their system that keeps happening?
• Backstocking errors – is your inventory reaching the back room correctly? Is the retailer’s system recording it properly?
• Incorrect recording of a sale – what’s happening with the point of sale system?
• Poor or infrequent inventory audits – how often do inventory audits occur? How thorough are they?
• Misplaced inventory – are customers walking off with your products and putting it elsewhere in the store? What does the retailer do to minimize this?

3. Communicate with the retailer

No matter what, ask your retailers what processes they have in place to prevent phantom inventory. This is important, even if you don’t think you’re experiencing it. Understanding what processes your retailer has in place will help you decide what your next steps are to prevent phantom inventory or stop it if it is happening.

If you think it’s happening to your products, discuss your findings from your physical and analytical observations. Ask for the retailer’s help in resolving these issues. They may not be aware that anything is amiss and if it’s happening to you, it’s likely happening to their other brands.

If your retailer doesn’t have anything in place to deal with phantom inventory, it’s likely that they don’t understand the impact on their bottom line. Talk to them about how phantom inventory can hurt brands and retailers because it costs you both sales. It also can harm long-term relationships between retailers and brands. Plus, it wastes their employees’ time as they must try to track down non-existent items when a customer asks for it but the employee doesn’t realize it’s out of stock.

4. Engage a third party

If your retailer does not have a solution to your phantom inventory problem that satisfies you, consider soliciting the help of a third-party merchandising company. These experts are trained in spotting phantom inventory and can help you put the right measures in place so you don’t miss out on future sales.

Click below to learn about how Retail Merchandising Services, Inc. can help you avoid and reduce phantom inventory.

The RMS Difference

The post How to Avoid and Reduce Phantom Inventory appeared first on RMS.

In retail, there are 3 main types of audits:

• Market Audit – typically done through a survey, this measures brand sentiment & your competition. This is helpful to understand consumer trends & if your products are well-positioned in the market place & in the store or if you need to makes some changes.
• Merchandising Audit – this is the “nitty gritty” of audits & looks at your inventory data, sees if your inventory is on the shelf where it should be, checks planogram compliance & more. This can be time-consuming & costly, which is why RMS is here to help!
• Loss Prevention Audit – this takes a look at if your loss prevention plan is working, if products are being stolen or misplaced & how to minimize this. Partner with your retailer to better understand what they do for this type of audit. Successful brands & retailers alike will perform these audits regularly. Understanding what’s really happening to your inventory will give you insight into everything from inventory management to customer preferences.

Contact us today for help!

The post Store Audits: What Are They And How You Can Complete One Efficiently appeared first on RMS.

That’s why we…

1. Strive for great execution rates and by “great” we mean regular rates of 97% or higher.
2. Respect your expertise by sending in experts of our own.
3. Hold responsibility near and dear. Our reps “own” their stores to get to know them inside and out.
4. Are a full-service merchandiser so we can offer MANY services to our partners.

Click here to learn more about one of our newest, Snap! Audits

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