What Makes POSM Deployment a Competitive Edge in Retail Execution?

The majority of post campaign reviews happen at the wrong time. Teams gather compliance pictures, check sales figures, determine if the creative was purchased, or made a splash. A point that is seldom reflected upon is what had occurred over the two-week period prior to the time a customer entered the shop. On time delivery of materials. If they did come, how many? If they did, it's doubtful that they knew exactly what to do. The creative and the campaign logic may be fantastic, but if deployment of this campaign is undistributed, then the commercial results will manifest themselves as such - whether or not anyone can directly attribute these results to its root cause.

Retail Execution Begins Long Before Customers Enter the Store

While it looks obvious that retail execution depends on how a product displays on the shelf, and the quality of the in-store display is influenced by too little, too late and an operational process that begins weeks prior to getting to the store. According to industry research, execution failures are often the result of problems in the upstream coordination of the supply chain and/or operational issues within the store where the creative appeared.Research indicates that execution failures more often than not are due to breakdowns somewhere in the upstream chain, as well as inadequate training in the stores where the creative is being implemented. If regional logistics providers follow different schedules, or the delivery directions differ, a campaign's materials will be inconsistently received to the stores, with some stores receiving the whole campaign more than a day early and others receiving parts more than a day late.

This operational fragmentation can prove to be very expensive when launching a big product, for example, when launching a new consumer electronics product. Combined, brilliant creative and smart messaging delivered in a national campaign can be marred by late physical rollout, which leaves the brand with a crucial amount of commercial momentum lost when ads start to dominate as digital platforms make their mark and search engines fill the advertising void. A promising customer experience originates from the marketing brand promise that the brand's messages are being matched by what is on the shelf or on offer in-store, but when it happens it is not the marketing brand consistency it promised, but the customer experience that it provides.

Why POSM Deployment Has Become a Strategic Capability?

With retail POSM deployment no longer a logistics endeavor but a strategic capability, modern retail success hinges on the smooth integration and the optimization of their implementation.Modern retail competitive advantage is won or lost in the seamless integration and optimization of how easily and well POSM roll out is handled. The old way of doing deployment sees it as a linear and reactive process: When the campaign is over, media is created, and physical storages deploy the media as they can. This will work well for a low volume of campaigns for a smaller network, but is easily overwhelmed with short drive times resulting in disjoint communications in-store and failed coordination.

By contrast, the best-in-class FMCG and consumer electronics companies think of deployments as part of their proactive competencies. These organisations streamline the rollout process, meet multiple manufacturing timelines, logistics timelines, and the execution process at a store level by planning and keeping it under the same lens and in a central location. But whereas the traditional approach of a compliance audit will come after campaigns have been deployed, leadership monitors campaign readiness real-time while in the launch window, and corrects mistakes as soon as they happen, giving them a huge commercial benefit on launch day.

The Hidden Cost of Poor Deployment

The impact of improperly implemented POSM is often subtly overlooked since the actual reasons for returns on investment are mediocre, customer experience disorientations and lost promotional opportunities are considered to be due to a faulty execution of the creatives or to differences among store teams. Major seasonal campaigns can include assets that get updated onsite immediately, but physical assets may be received days after the Internet-based ones. This "misalignment" during a purchase decision biases customers, and actually undermines campaign effectiveness, but rarely is this direct connection made explicit.

The significant financial losses of operational rework, plus the revenue lost, make it even worse. When rollouts don't go as planned, organizations find that they must cover the increased costs of reshipping, reproducing or reinstalling resources, thus taking a hit in the commercial bottom line caused by an inflated cost of the original campaign. The implementation process generally does not get the attention and leadership needed in some departments to address the underlying problems in operation and so these inefficiencies continue to exist.

Retail Execution Is Becoming a Network Coordination Challenge

When it comes to retail campaigns, it's a problem in project management if you run them through a network of ten retail stores. Operating across hundreds or thousands of locations across multiple markets is a different type of operational problem-solving which extends beyond good project management and requires systems, governance and partner coordination.

Retailers who are looking to enter more markets, such as India, the GCC and Southeast Asia, are facing this challenge head-on. Specific logistics support, special requirements regarding signage and labelling, widely different installation partner capacity, and regional supplier relationships, each with its own oftentimes complex logistical programming, for each of these regions, there are significant differences. The operating model that has been developed in most retail organizations hasn't necessarily kept pace with this complexity, so the deployment governance model hasn't been developed in the organization just yet, in part because the complexity grew out of the operating model.

One answer more upscale stores have adopted is to deploy waves. Instead of rolling it out across the whole network at once, which is the high-risk option if there is a problem, wave-based models strategically roll-out the network across different groups of stores and then spot and rectify issues before they spread across the network. The first wave is used as an “operational proof” prior to launching the full offering.” It will increase the rollout time to a minimal degree, but has a significant compliance (schedule) impact when deployed at scale.

The Future of POSM Deployment

The model of what POSM is becoming is one from a "passive logistics" to a "smarter, real-time operating system" that changes the nature of campaign management from a "retrospective" to some sort of “operational" indicator. Leading stores are using digital systems such as real-time rollout dashboards, RFID product tracking systems, algorithms for better planning and scheduling, and predictive inventory systems, to help manage and fine-tune supply chains for maximum efficiency and to prevent any material over- or understocking. Digital proof-of-installation workflows translate these capabilities to real-time tracking of compliance, and campaign readiness across the network with leadership.

Retailers who create a competitive edge for themselves over the long term do it by considering the deployment of a Point of Sale Material (POSM) as a business system and not a business logistical process. Successful organizations are based on the following, consistency of process, modular approaches to display structures, central decision making and coordination over rollout, real-time visibility of the rollout, and early cross-function engagement with the marketing, operations and design teams. While investment is a challenge, compounding execution can take you up a tree when it comes to elaborate agile infrastructure that will provide a stage for highly regarded ratings and connectivity.