Building a retail presence across hundreds or thousands of stores creates an operational challenge that extends far beyond getting products into distribution. Once those products reach the retail network, brands still need to think about what is happening inside individual locations, whether shelves are being stocked, how field activity is being managed and what happens when store-level conditions require action.
Manufacturers have traditionally approached those responsibilities in different ways. Some build substantial internal field organizations, while others outsource individual functions such as merchandising or shelf stocking. Between those two models is a growing opportunity to outsource a much broader portion of retail execution to a partner that has both the field workforce and operational infrastructure required to manage it.
Marketsupport has been expanding our capabilities around this model. In addition to providing experienced in-store shelf stocking merchandisers, our investment in enterprise technology allows us to support more sophisticated functions involving ordering, inventory management and delivery.
For manufacturers, this raises an interesting strategic question. Instead of asking whether merchandising can be outsourced, it may be more useful to ask how much of the field operation actually needs to remain internal.
Outsourcing shelf stocking is only the starting point
Shelf stocking is one of the clearest examples of a retail function that can benefit from an outsourced field team. A manufacturer needs products physically moved onto shelves and serviced across a distributed network of stores, but building an internal workforce to perform that work can require significant infrastructure.
An outsourced merchandising organization already has systems for recruiting, coordinating and managing field personnel. Rather than establishing an internal team in every market where products are sold, a brand can engage a partner to provide the geographic coverage and store-level execution required.
The value becomes particularly clear as the retail footprint grows. Managing people across a small number of locations is very different from coordinating representatives across multiple cities, provinces or regions. Each expansion adds scheduling requirements, management responsibilities, training needs and operational complexity.
Outsourcing allows the manufacturer to access field infrastructure without having to recreate it internally.
However, once a field partner is already present in the stores, it becomes reasonable to consider whether its responsibilities should stop at stocking the shelf.
Field management carries its own operational burden
A large field team needs considerably more than a list of store addresses.
Representatives need assignments, schedules, program instructions and management support. Activity across locations needs to be coordinated, and information coming back from the field needs to be organized in a way that allows managers to understand how the program is performing.
Building those capabilities internally requires people and systems that may sit outside the manufacturer’s core expertise.
A CPG manufacturer, for example, may be exceptional at developing products, managing retailer relationships, forecasting demand and building its brand. That does not automatically mean it should also build a national infrastructure for recruiting and coordinating part-time or full-time merchandising resources.
A field execution partner can assume much of that operational responsibility. The manufacturer establishes the objectives and requirements of the program, while the partner manages the resources and processes required to execute them in stores.
Marketsupport’s technology investment strengthens our ability to operate this way because field activity can be managed within a more connected operational environment rather than through a collection of separate processes.
What happens when ordering becomes part of the program?
The opportunity to outsource becomes more interesting when the field representative is responsible for something beyond the physical merchandising assignment.
Direct Store Delivery provides a good example. In a DSD program, brands and manufacturers may operate delivery networks that bring products directly to individual retail locations. Field sales representatives visit those stores, assess what is required and take orders that ultimately need to reach the manufacturer’s ordering system.
Marketsupport can support automated store ordering for DSD programs. Orders taken by representatives in the field can move through our system into the appropriate ordering process, creating a more direct connection between store-level activity and the operational systems responsible for fulfillment.
For the manufacturer, this means the outsourced field organization can potentially take responsibility for another meaningful part of the workflow.
Instead of hiring a merchandising provider for shelf-level execution and then creating a separate internal process to handle information generated by those visits, the organization can look for opportunities to connect the activities.
This is where outsourcing begins moving from a labour decision to an operational strategy.
Inventory management creates another opportunity
Inventory becomes increasingly complicated when products are distributed across a large number of locations.
The challenge is not limited to traditional retail stores. Manufacturers may have products stored at hospitals, customer facilities or other distributed environments where inventory needs to be monitored, delivered and replenished.
Marketsupport has the ability to support programs where field representatives manage products at those locations while our technology supports inventory and ordering requirements.
Consider a manufacturer supplying healthcare products to hospitals. The products could include commonly used items that need to remain available within the facility. Inventory may be maintained in designated storage areas, requiring someone to deliver products, understand what is available and manage replenishment.
A manufacturer could attempt to build its own field infrastructure to service every location. Alternatively, it could work with a partner that already has experience managing distributed field teams and the technology required to support the inventory process.
The same strategic principle applies in retail. If the field partner already has people physically present where inventory is being used or sold, there may be opportunities to extend that responsibility beyond the immediate merchandising task.
Outsourcing does not mean giving up control
One concern organizations sometimes have about outsourcing is that transferring responsibility to another company will reduce visibility or control.
That outcome is possible when outsourcing is poorly structured. A field partner that simply provides labour without strong operational systems can create another layer between the manufacturer and what is happening in the market.
A more sophisticated outsourcing model should accomplish the opposite.
The manufacturer should establish clear program objectives, execution standards and expectations while the field partner assumes responsibility for delivering against them. Technology can then provide the operational structure required to manage field activity and create visibility across the program.
This distinction is important. Outsourcing should remove the burden of managing every individual field resource without removing the manufacturer’s ability to understand how the overall program is performing.
For Marketsupport, our investment in technology supports this approach by connecting more of the activity taking place across our field operations. The client does not need to manage every merchandiser individually because that is our responsibility, while the program itself can be managed within a structured operational environment.
The economics go beyond hourly labour costs
When manufacturers compare internal and outsourced field operations, the analysis can become overly focused on the hourly cost of the person performing the work.
That is only one component of the actual cost.
An internal field workforce may require recruitment, onboarding, training, management, scheduling, technology, administrative support and ongoing supervision. Employee turnover creates additional recruitment and training requirements, while geographic expansion can require the organization to develop resources in markets where it previously had no field presence.
There is also the management attention required to keep the operation functioning. Every hour a senior employee spends solving scheduling or staffing problems is an hour that cannot be spent on higher-value commercial priorities.
An outsourced partner absorbs many of those responsibilities as part of the service it provides.
This does not mean outsourcing will automatically be the right financial decision for every organization or every function. It means the comparison needs to account for the complete infrastructure required to operate the program rather than looking only at the visible cost of field labour.
Not everything should necessarily be outsourced
A broader outsourcing model does not mean manufacturers should automatically transfer every retail function to an external provider.
Some capabilities may be strategically important to maintain internally. Key retailer relationships, commercial strategy, product decisions and other core functions will often remain firmly with the manufacturer.
The better question is which activities require the manufacturer’s unique expertise and which require reliable execution infrastructure.
Physically stocking products across hundreds of stores is operationally important, but a manufacturer does not necessarily need to own the workforce performing that activity. The same may be true for certain ordering, inventory or delivery functions when they can be effectively managed by a specialized partner.
The optimal structure will depend on the product category, retail network, geographic footprint and complexity of the program.
A strong field partner should therefore be able to adapt its role rather than forcing every client into the same service model.
One partner can reduce operational fragmentation
There is another dimension to outsourcing that becomes important as programs become more complex: the number of different organizations involved.
A manufacturer might use one provider for merchandising, another for temporary staffing and internal resources for ordering or inventory management. Each organization may perform its individual responsibility well, but the manufacturer is left coordinating the connections between them.
Every handoff creates another process that needs to be managed.
When a single field execution partner can take responsibility for a broader group of related functions, some of that fragmentation can be reduced. Shelf stocking, field management, store-level information and selected ordering or inventory activities can operate within a more connected program.
Marketsupport’s expanding capabilities are designed to give clients that option.
We can still provide focused in-store merchandising when that is exactly what a client requires. The difference is that our infrastructure increasingly allows us to support programs that extend beyond an individual store assignment.
Think about the outcome before deciding what to outsource
The most useful way to evaluate outsourcing is not to begin with a list of jobs. It is to begin with the business outcome the manufacturer needs to achieve.
If the objective is to keep products properly stocked across a large retail network, what people, systems and processes are required to make that happen? If the objective involves a DSD program, how should store-level ordering connect with delivery? If products are distributed across hundreds of customer locations, who will manage the inventory and replenishment required to keep those locations supplied?
Once the complete process is visible, the organization can determine which pieces genuinely need to be owned internally.
For some manufacturers, Marketsupport may provide the shelf stocking resources required to strengthen retail execution. For others, our role can extend into automated ordering, inventory management, delivery or broader field operations.
The important shift is recognizing that outsourcing retail execution does not have to mean simply outsourcing people. It can mean outsourcing the infrastructure required to manage a complex physical operation across a distributed network of locations.
Manufacturers should be able to concentrate their internal resources where those resources create the greatest strategic value. When a specialized partner can reliably manage the field execution surrounding the product, building every piece of that infrastructure internally may no longer be necessary.
The question is no longer whether a company can outsource retail merchandising. With the right field partner and technology behind the program, the more interesting question is how much operational complexity the manufacturer can stop managing itself. For more information visit www.marketsupport.ca.
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