Lacking resources, time and budgets are some of the biggest issues within the retail sector, as it means important tasks like store auditing and merchandising fall behind and ultimately, products do not perform as well and sales are lost.
In an industry that changes daily, the retail sector risks falling behind without sufficient means to audit stores because they cannot provide the levels of data needed to compete with e-commerce giants.
McKinsey have this month reported that by 2020, 80% of sales will still take place in physical stores, making the lack of understanding of the shelf a blind-spot that needs solving for CPG organisations and retailers. With 4% of sales lost due to products being out-of-stock, the industry must change its approach or suffer the consequences.
But how do we tackle these issues to help drive sales?
Crowdsourcing is emerging as a way for manufacturers to reach beyond their regular field staff and without the expensive, time-consuming process of training them. Merchandising performance is vital for maximising sales and ensuring brand reputation, and crowdsourcing can help this happen far quicker and more accurately.
Uncapped worker potential
Traditional sales representatives and merchandisers offer limited coverage and frequency, as well as being potentially biased and expensive to train. Using crowdsourcing, CPG companies can increase and optimise their field force to unprecedented levels, regardless of how they go to market.
In 2018, 87% of UK adults owned a smartphone. This means that every consumer is a potential auditor. This means the potential for field crowdsourcing in stores is also growing, with more customers able to become ‘auditors’ during their daily shop.
In the retail world, crowdsourcing can provide valuable insights across every shelf exactly when needed, using individual consumer ‘auditors’ that live, work and travel close to the respective stores.
Crowdsourcing therefore allows CPG companies to access data from a broader range of stores, far faster.
In turn, CPG companies are able to cross reference results store by store. Each set of data is collected in the same way, and can be continuously updated. Hence, CPG companies can gain insights from a broader, more diverse crowd.
Traditional retail auditing tools are insufficient for providing the level of instant analytics now required, and point-of-sale (POS) data is too broad to be actionable. POS data is often only available at an aggregated level, not at a store level, preventing CPG companies from accessing granular insights. The efficiency of crowdsourcing means CPG companies receive audited data in near real time, and can therefore take action far quicker.
Manual auditing methods frequently result in field sales teams spending more time auditing the store rather than focusing on selling, merchandising and relationship building, which is of more valuable to the business.
Crowdsourcing boosts efficiency by freeing up the time of the organisations’ own field staff to focus on other high-priority tasks, such as acting on the data provided by the consumer ‘auditors’. As a result, crowdsourcing provides the possibility of reducing capital or operational costs while improving time to market.
Crowdsource your competitors
Crowdsourcing can also be used by CPG companies to seek insight into competitor performance by gaining objective store-level data. Solutions like the technology we’re working on, and others like it, combine crowdsourcing with image recognition which can digitise the entire shelf to give brands complete category and competitive visibility, transforming retail understanding with vital metrics such as linear share and fair share of shelf.
‘Consumer’ auditors mean CPG companies can audit each store location to identify potential hurdles before a launch and plan around them. A visibility over rivals can help CPG companies remain competitive and proactively improve their merchandising.
Unbiased customer connections
Sales assistants carrying out store audits have the potential for intrinsic bias, and are sometimes even guilty of gaming the system. Using crowdsourcing, auditors are rewarded and rated on the quality of the images collected.
Their task is simply to capture what they see as a shopper. This means CPG companies have access to reliable data, minimising bias and scope for error.
CPG giants have been slow to adapt to the changes in customer behaviour. An increasingly human-centric landscape means the opinions of consumers are becoming far more important. It is now just as important to know the attitudes of customers regarding the products they buy as it is to know what competitors will be producing.
As a result, crowdsourcing is fast becoming a vital component of retail merchandising, enabling superior control of new product rollouts.
A source of accuracy
As well as being expensive, manual audits are time-consuming, prone to human error and do not measure sales loss. Even if you have POS data by stores, you only know what has sold, not the shelf dynamics that drive sales such as stock on shelf, secondary displays, number of facings, and point of sale material.
For years, crowdsourcing has been recognised as producing incredibly reliable predictions by aggregating the opinions of many people and is a tool recognised for its accuracy. It’s simple: the more data you have on a topic, the more reliable and accurate it will be.
While in the store, the crowd can answer questions about displays and shelving, and support their responses with photo evidence. This dramatically speeds up the audit process usually carried out by store assistants, and provides unprecedented resources at very low cost.
Accuracy is ensured by verifying each task after it is submitted, meaning CPG companies only have the most valuable data. Crowdsourcing allows CPG companies to gain instantaneous visibility of the shelves their products are displayed on, minimising bias and scope for error.
Martin Smethurst, managing director EMEA at Trax Retail