It is not very often that you receive a compliment from your customers. It is usually a “quiet is good” scenario. This is why we were very excited to hear from one of our customers that they are now an “Evangelist of the Brand of IPMS”. This means a lot to us because this is exactly where we want to be. To us, this meant so much more than just saying we were doing a good job. To us, this compliment meant that as a service provider, we were not only able to provide the service they asked for, but we were able to venture into new territory and find solutions for even bigger problems they were dealing with. Helping the retailer do better at retail through innovation and removing barriers that prevent them from success.

In this case, because of the relationship we have developed, we were able to talk about issues that are impacting other areas of the store and share ideas that they didn’t think would ever work or were previously too complicated to pull together. Not quite brainstorming since these are not new ideas, they are existing ideas that we are able to find a way to make possible together. An example is an enhancement to our patented shelf strips to integrate product promotions, suggestive cross selling, logos, brand messaging and color coding by category. The result will be an even more powerful store shelf management tool that will still help this retailer realize the same labor savings and shelf integrity benefits of our patented shelf strip system, but will also further increase the value of the shelf strip solution through even higher revenues. Not to mention how much cleaner the shelf presentation will look and how much easier it will be for customers to see everything without all the POP that it would take to accomplish the same results.

In other words, as a service provider, we are able to overcome the internal limitations and bottlenecks a retailer has and are able to pull all the different components together and deliver it back to the retailer in one piece. Internally for a retailer it is a big deal to get all the information needed to combine Pricing, Vendor Promotions, Customer Loyalty campaigns, price promotions and suggestive cross-selling together and deliver to the store, however, our proprietary software can integrate each of these “ingredients” into our patented shelf strips and “reset in a box” program for a truly comprehensive solution.

The result is one piece that gets to the store, is easy to understand for the store personnel and is easily executed consistently across all the stores. And by the way, it is going to cost less because we can build in the efficiencies in one solution.

It’s fun to be involved in initiatives like this, because as we grow the relationship together, the retailer sees more and more ideas that didn’t exist until you removed the barriers. Now this particular customer is excited about yet another idea that, in their words, will take their entire business to the next level and will have a tremendous impact on sales.

We believe this should serve as a model for all other retailers. We are happy to be working with our retailer partners who embrace what the definition of Retail 2.0 should be…that is improving HOW retail is done tomorrow through innovation in merchandising strategies at the shelf.

The focus on execution, specifically at the retail store level has been getting well deserved and overdue exposure lately. Recently there have been 2 major articles that serve, at least in our opinion, as a warning beacon to all retailers – that is, without accurate store execution, specifically of strategic merchandising plans, even the best retailers will have a hard time succeeding in the highly competitive markets that currently exist and will continue to exist in the foreseeable future.

The 2 major studies, (ISI Sharegroup, Supermarket News, Store Inefficiencies Cost Industry 1% of Sales, Sharegroup Says, Apr 25, 2008 6:00 AM, By Michael Garry) and ( Robert Angel’s Linking Execution With Strategy in Support Functions) clearly point out the distinct importance that execution has. Mr. Angel’s study applies to execution of strategy across all industries, and the ISI study is specific to the revenue opportunity that is left on the table for retailers due to store inefficiencies. It’s clear that even the best strategies require even better execution in order to get the desired results.

For retailers, execution is the biggest hurdle no matter how complex the initiative. Be it Customer Service, Inventory Management, Merchandising resets, new store setup, maintenance, or you name it, we believe tools in the store that minimize the burden of execution while improving the accuracy and execution are highly valuable. This is precisely why we find it so hard to believe that the services IPMS offers (i.e. integrated shelf strips and shelf labels – “Tools”), the provision of tools that virtually guarantee flawless execution in a retail store are still viewed as an expense! Viewed as a cost? Especially when all the research points to these types of tools as providing a sizable value?

Take a recent example of a conversation with a retailer regarding the use of these tools in stores. This particular retailer fits into the category of retailers (see previous blog – “Shelf Strips – Industry Assessment Today”) that have tried the use of these tools with mixed results and have reduced their use for a number of reasons. Mainly that the current service provider could not adapt to the changing needs of the business and, at least in the case of this retailer, these tools are viewed as an expense. So the performance of the tools are measured only by getting the lowest cost alone, not whether they provide the best quality and value that fits the current needs of the company. When presented with additional uses and ideas that would greatly improve the use and value to their stores, the response from executive management was that they were considering stopping the use of shelf strips in stores all together because it was less expensive to have the stores print all the labels. The impact to the store labor, the associates’ decreased ability to accurately set and maintain the shelves, the erosion of shelf integrity, all while the total cost to the company exponentially increases. However, in this case the main consideration was the per unit cost of a single item.

It is at this point when the “wedge” is usually discussed. Leveraging costs for increasing returns. It is hard to believe that even in today’s retail landscape that this concept is not given the spotlight it should have. Put simply, the tools we offer to link execution at the store to the strategic initiatives of the company continually reduce labor costs and increase revenue, the pure definition of the “wedge”. Understanding that the store labor budget and the shelf strip budget are typically different budgets, they both are compared to the same revenue line. Our belief is that the overall performance of the organization is paramount and how to account for these tools becomes much simpler to resolve than the hurdles each store is facing in order to get proper execution of strategic initiatives.

IPMS has been continually helping retailers expand the “wedge” and improving store execution for over 15 years by developing solutions that expand and evolve based on ever changing needs.

Let us develop solutions with you today. Contact IPMS

In regular conversations with retailers, IPMS continues to find store set and reset execution solutions that previously were either “not cost effective” or “too complex” or “required significant work” in order to implement. We find that the first step in providing these solutions is overcoming prior experiences that may have tarnished the view of shelf strips. The solutions IPMS provides continue to show values in many cases upwards of $4 per strip foot, at least a 3200% ROI.

In general, most retailers have heard about or have previous experience using some form of shelf strips in some capacity, both with and without price labels. Usage varies between offset and digital printing methods. We also noted that shelf strip use varies based on the evolution of a retailer, as the retailer grows through phases and sizes across all segments. This is the area that seems to have caused the highest failure rate – retailers “outgrew” the solution by their previous provider.

Based on the discussions we have regularly with retailers, there appear to be a consistent set of prior experiences that have soured the perception that a real, value driven, integrated shelf strip solution is available in the marketplace. The cause seems to consistently be the inability of the previous shelf strip service provider to understand and adapt to the ever changing needs of the retailer. Naturally, the shelf strip programs were ceased, causing increased pressure on the store personnel to execute without tools to improve accuracy and efficiency. It is absolutely critical that the shelf strip solution is integrated as part of a long term and evolving strategy.

Here is a summary of the most common reasons retailers ceased use of shelf strips:

1. Inaccuracy of shelf strips delivered to store. Strips delivered to store did not fit, product did not align, etc. Inconsistent results required over management by retailer. The retailer is forced to focus on less volatile or more common sections of stores. Corporate Office has to overcome inefficiencies and micro-manage data flow, audit accuracy and confirm results.
2. Variable fixture types and sizes could not be integrated into the solution. The service provider did not have the ability to adapt and produce strips that fit correctly into the shelf channel.
3. Current provider was unable or it was deemed not cost effective to support required lead times for price changes and/or agility. Service provider does not have a dedicated facility for shelf strip production that can also quickly produce reprints/ad hoc prints.
4. Service provider lacks understanding of store procedures, planogram system/processes and business rules of each retailer. Provider was unable to provide a customized solution based on total needs of retailer. Retailer forced to use strips for only certain areas , inconsistency across store creates difficult store processes.
5. Store management doesn’t trust or loses trust that strips will work due to inaccuracy/inconsistency. Creates negative perception of corporate strategies - “you don’t know me” and/or - “I know best how my store needs to be set”
6. Unable to support zone and/or store specific planogram/pricing requirements.

Increased complexity of merchandising systems outpaced providers ability to adapt.
We also find that in certain segments, the use of a shelf strip solution has been modified to a generic “Merchandising Strip” that does not contain a price label for some fairly consistent reasons:

1. Short lead time requirements to execute volume of price changes on shelf strips.
2. Inability of service provider to meet jurisdiction label format requirements
3. Service providers cannot identify, produce and kit targeted shelves or sections within a planogram
4. Compromise of keeping shelf integrity and price label accuracy at same time due to high volume of price changes
5. Belief (or being told by service provider) that it is too complex, therefore too expensive and IT can’t support the complexity
6. Service providers cannot provide an integrated price change/shelf strip solution.

IPMS has also documented consistent characteristics associated with a successful shelf strip service for a retailer. Retailers that use an effective shelf strip service continue to realize labor savings and revenue improvements :

1. Have same basic planogram system as all other retailers
2. Use planograms in store
3. Have IT department that is integrated with Merchandising
4. Have said that they will not open, remodel or reset a store without strips – they can’t afford it.
5. Have Store Operations and Corporate support and enforcement to achieve merchandising and operations objectives at the store level. All levels of organization and Field management advocate shelf strips for the most accurate execution of merchandising strategies
6. Have service provider that dedicates resources to develop specific retailer/category/store solution. The solution is customized to deliver highest degree of efficiency at both the corporate and store level. It is not viewed as a generic, commodity service.
7. Have a service provider with data processing expertise that uses planogram files and store/zone specific price files, audits data for accuracy, validates to business rules and produces store specific print files that are integrated with printer efficiency.
8. Have service provider with merchandising experience in order to help retailer continue to refine internal processes for planogram system and improved use of planograms both as analytical and implementation tool.
9. Have labor model to stores based on use of shelf strips for resets and regular maintenance. Store personnel achieve the same results regardless of who completes the reset – lower the fully loaded cost.
10. Service provider has dedicated facility to handle shelf strip and all reset components – providing best scenario for turn around and small run production.

IPMS has been working with retailers to achieve these success characteristics over the past 12+ years through continually updating and integrating retailer specific business rules to our patented shelf strips and software systems. Our software and systems are designed specifically for shelf strip production and result in the highest quality, most effective and highest ROI shelf strip services available.

If you want to achieve the results described above, we would be happy to help. Contact IPMS

Retail today is down to the hundredth, if not thousandth of a percent in managing costs and maximizing profit. Foreign markets, import/export efficiencies and the migration from national to international to global has forced retailers to primarily focus on the cost of the products they sell as a measure in maximizing profitability. Customer Service initiatives have been introduced to increase loyalty and differentiate retailers in place of real or perceived price advantages. What has been ignored or deemed “too complicated” is the larger impact on profitability associated with the excessive and redundant costs in execution of strategic plans at the store shelf.

At IPMS, we believe the final frontier for retailers is excellence at the shelf edge. While the products that are displayed on the shelf have been beaten down to the absolute lowest cost and improvements in replenishment have reduced order quantities and volume discounts, it is the efficient execution at shelf edge, that holds the greatest impact to profitability for the retailers of the future. The new focus for a retailer is to acquire tools that virtually guarantee excellence in execution at the shelf with the minimum of labor and virtually no training or skill level requirements by an ever changing workforce. Confidence in consistent execution of plans across all stores in the chain has a value that far exceeds the profit potential of a product.

The tool to achieve the highest performance at the shelf edge is not a printed strip that has been developed as if it were a product, where cost is the sum of the raw materials used to produce it. Rather it is the value heavy extension of the strategic plans developed by Merchandising that need to be executed in the store. A tool that is a management report that provides Field Management and store personnel with all the information needed to be successful every time. A tool that is so precise and of highest quality that the store personnel do not need to verify it, receive specific training or possess a certain skill level in order to achieve success.

This tool is precisely what we offer through our patented software systems and shelf strip service. At IPMS, we develop the service solution to include your business rules, automatically validate and audit data, flexibility with managing price labels, price changes, color and data formatting right down to the store/shelf/position level. Our retail professionals are your advocates in developing and adapting the solution that will meet your current and future needs. Contact IPMS to get the most value for strategic initiatives by getting accurate, consistent execution in every store.