CPG manufacturers and physical retail stores are two ends of a single retail supply chain spectrum. The only job of retailer is to help in ideation, suggestion, and service, thus enabling the retail supply chain to provide products effectively and sustainably to the consumers.
But, often CPG manufacturers find it challenging to understand what's happening inside stores and how consumers see their products on the shelf. Sales and supply chain leaders sit in their offices. Their on-field sales agents are the only force that are available at the physical stores who can check and ensure proper implementation of retail execution strategies.
In-store Retail execution - Size is the adversary to efficiency
With consumer product portfolios running in hundreds and seated across thousands of store shelves, CPG leaders are always challenged to gain control over how consumers see and buy their products. With many variables that threaten to derail your sales strategies and it can prove really hard to ascertain what went wrong and where it went wrong. While this is solved in piecemeal fashion by market research firms who rely on a network of field agents or merchandisers who manually visit and collect in-store data making it a slow, time consume and cumber some process with serious limitations with regards to scale.
Gathering these data in real-time to address time-bound demands is challenging with manual intervention. So, the question remain unanswered; how does one gain real-time visibility on their execution performance across every store and every channel? How does one ensure their promotional displays and materials are correctly implemented? How can I track what my competitors are doing and what prices are the same category of products being offered to consumers?
Retailing is ancient and has evolved from sharing and bartering, to selling and consuming. While the industrial revolution pioneered mass-production and distribution of consumer products, the fundamental shift happened when software-driven 'digital transformation' hit the traditionally run retail industry in the mid-90s.While technology innovations have improved and AI computer platforms are offering unprecedented scale, many CPG manufacturers across the world are investing in making Image Recognition and AI as one of their key pillars in their digital transformation and innovation strategy.
In the year 2021, global CPG brands have increased their IT and retail technology spends by over 10.6%. This has only been increasing with a total revenue spends of ~ 0.05% to 0.1% on IT tools powered by image recognition.
A picture speaks a thousand words. But it also speaks the truth.
Imagine if you had a set of retail shelf images to view on a single dashboard, everyday, from every store at anytime? In a nutshell, this is what Image Recognition as a technology can bring to CPG manufacturers; accurate and real-time on-shelf data, information on product out of stocks or over stocking, displayed promotional assets, pricing and competitor placement. This can be a goldmine of data that gives on-ground "retail truth".
Image recognition technology is a set of complex algorithms that are trained to identifying places, objects, faces, buildings and more from digital images.
In the context of physical retail, image recognition technology helps you recognise any type of SKU placed on a retail shelf and derive valuable data from the images. This visual data can help impact your business in various ways.
Image recognition combined with AI can help stakeholders see how their products are placed on the shelves.
Instant and accurate store-level insights enable manufacturers to take actions that increase product share on every shelf of every store shelf. Thus, safeguarding their brand presence insides stores to increase sales through high availability of products for consumers who shop.
Stores are required to comply with trade marketing rules and promotional compliances set by the Brands to be eligible for incentive payouts. With no visibility in how their promotional displays and POSMs are positioned inside stores, it becomes challenging for manufacturers to achieve higher marketing ROI. With image recognition, marketing and branding teams can instantly flag stores that violate compliances and quickly work with the store and category managers to improve promotional visibility.
Merchandizers who visit stores during their audits spend anywhere from 30 to 45 mins to gather in-store data manually. Collecting data manually is tedious, thus resulting in fatigue causing a high margin of errors. Manual audits are slow and time-consuming and have very limited scope to scale. By the end of it, Brands cover only a fraction of stores. With a simple image capturing function at stores, merchandizers can spend their time more productively. To start, they can visit more stores, fix execution issues on the spot and build better relationship with the stores.
Understanding what and how competing brands execute their execution strategies inside store can be a crucial insights for many stakeholders. Not only does it help in making better execution strategy, but also provide valuable insights into product mix on every shelf across stores. this enables brands to achieve precision sales and distribution strategies to ship right products to right stores in right quantities.
Another advantage of competitor intelligence is to understand the competitors pricing strategies implemented across stores for specific product variant. This helped brand managers and category managers to build better pricing strategies compared to their competitors.
To know more on how image recognition can help deliver massive business value to your retail business, talk to us today!
Also, if you wish to understand how Image Recognition AI works to deliver accurate in-store retail insights, check out this our Your complete guide on Image recognition for in-store retail execution