As I mentioned in my recent post Supply Chain Does Not Have To Be A Dirty Word, TrueDemand has recently made an effort to publicize the Seven Deadly Sales Suppressors which any organization who sells consumer purchased goods should be aware of and address. These are:

• Out of Stock
• Price Compliance
• Incorrect Merchandising
• Poorly Executed Trade Promotions
• Damaged Merchandise
• Unsuccessful Product Roll-Over/New Product Introductions
• Steadily Declining Retail Orders (the “death spiral”)

If you’re a store operator, retailer, sales execution professional, or account team at a CPG company – take these to heart. Your success depends on preventing each and every one of them every single day.

So, what can you do? Let’s address each issue in term.

• Out of Stock
  Simply put – you make sure the item is on the shelf when a customer wants to buy it! How do you do that? Inventory visibility. This involves knowing not only where the product is in your supply chain, but where it is in each retail facility. Just because product is in the store, does not mean it is on the shelf – and just because a product is in the storeroom, does not mean that the retailer’s employee can locate it should a customer have the patience to wait while the employee looks.
  Make sure your retailers are consistent not only with their shelf checking and restocking policies, but also in when they take inventory and how they organize their store room. If they have RFID at the shelf, work with them to make sure your product is RFID enabled in a compatible way. If they have problems managing their warehouse, work with them to improve it. Consider color coding your boxes or using unique symbols on each box to help them find your product should a box get misplaced.
• Price Compliance
  Are they charging what they are supposed to be charging? There are at least two ways to ensure this is the case. You can use the traditional method and send an account representative to the store on a regular basis to check, or you can make sure you get, integrate, and monitor their point-of-sales feed in a near-real time basis (at least daily) and check that the prices charged are in the correct range, or if there are no sales for a period you projected sales, actively look into what they are charging. This may mean sending an account representative to the store once in a while, but it is much more efficient and cost-effective since you can’t afford to send a representative to every store every day for every product.
• Incorrect Merchandising
  The best way to avoid this disaster is to have the right information at the right time. You do this through collaboration – which involves – gasp! – having the right supply chain systems in place that enable your people around the globe to connect and work together at any time on any issue as soon as it surfaces – before it becomes a problem.
• Poorly Executed Trade Promotions
  The best way to ensure your promotion goes as planned is to have smooth collaboration between your account teams and your retail partners. The best way to do this is to use communication and collaboration technology to work together. Furthermore, you’ll get the best results if you spend more time working with the retailers, or retail locations, you’ve had problems with in the past. And the best ways to identify these is to use predictive analytics that analyze past promotions. (In other words, the key is again the right supply chain systems.)
• Damaged Merchandise
  This involves making sure the products are not defective when they are shipped and that your logistics and distribution partners know how to handle them properly during shipments and delivery so they don’t become damaged. In other words, good quality control up front.
• Unsuccessful Product Roll-Over / New Product Introductions
  The key is effective change management. Good processes backed by enabling technology will again save the day!
• Steadily Declining Retail Orders (the “death spiral”)
  Well, this is the ultimate issue, isn’t it? It’s the only one where you may not ever know the true reason, unlike most of the previous problems which can only have a small number of reasons which can each be identified and mitigated in advance.
  However, with a bit of elbow grease and the right technology, you can remove almost all risks but one – demand. Perceptions, wants, and financial situations can change overnight for reasons beyond your control, so you can never truly control demand. However, you can make sure that orders aren’t declining because you’re out of stock, that they aren’t declining because the wrong products are targeted to the wrong markets, and that they aren’t declining because the products are of poor quality, etc. Furthermore, you can take active efforts to manage demand by using JIT production, reserving capacity, and setting the right price point so that you can minimize the risks.

In other words, there’s rarely a good excuse for lack of sales at the shelf as each of the Seven Deadly Sales Suppressors can be adequately addressed – especially if you have the right technology that enables you to do so.

What’s the sound of a lost sale? It’s not cha-ching!