What is retail activity optimization and why is it important?

Key Takeaways

• Retail Activity Optimization (RAO) is the optimization of standard, daily retail execution processes.

• Successfully implementing Retail Activity Optimization can result in long-term benefits for CPG manufacturers, such as store visit prioritization, reduction in manual audit time, and increased revenue per square foot.

• By catching out of stocks and planogram compliance errors, Retail Activity Optimization shifts field teams from reactive auditing to proactive selling.

• Retail Activity Optimization works hand in hand with Retail Execution in improving field team efficiency and overall profitability.

Executive Summary

Retail Activity Optimization (RAO) transforms CPG manufacturer field operations from a cost center to a revenue driver. Utilizing POS data and technologies such as predictive routing, retail activity optimization directs reps to the highest value stores in their territory when sales are at risk. This reduces wasted travel, fixes out of stocks, and serves to protect leaking trade spend from occurring.

TELUS Retail Execution combines image recognition, predictive routing and AI sales recommendations into one platform, allowing CPG manufacturers to eliminate the guesswork, sell more effectively and achieve perfect store compliance. 

What is retail activity optimization?

Retail Activity Optimization (RAO) is the refinement of standard, daily retail execution processes. It leverages multiple data sets to generate better outcomes in store through improved workflows and advanced analytics.

Retail execution lays the foundation for Retail Activity Optimization. It enables field sales personnel to deliver the perfect store experience through promotional execution. From a field perspective, it is mobility-enabled, native to any mobile device, and runs across multiple operating systems.

How does retail activity optimization help prioritize store visits?

Retail Activity Optimization uses real time data, sales alerts and route planning to rank and prioritise stores by urgency and value. This provides field reps with clear guidance on which high potential stores and actions should be addressed as soon as possible. 

This prevents a very common scenario. Your regional field sales rep spends their day driving to stores that are perfectly compliant. Meanwhile, a store down the road is losing thousands of dollars because a promotional display is sitting in the backroom.

This is the problem Retail Activity Optimization (RAO) addresses. Using real-time sales data to ensure field reps visit the right store, and ensure the right product is in the right place, at the right time.

Using POS and field data to rank store priority

At the heart of Retail Activity Optimization is point-of-sale data. This monitors real-time sales velocity, volume and value If a product typically sells 50 units a day, and suddenly hits zero for three days straight, the system can set alerts to the local field rep. In doing so, it creates a dynamic and optimized ‘priority score’ for every store in each territory, allowing for reps to maximize profitable decisions throughout their work week.

Reducing travel time with route optimization

These capabilities are wasted if a rep spends hours stuck in traffic. Route optimization takes the priority score ranking and applies machine learning to build the most efficient route possible each day. This includes dynamic clustering with high-priority action items for the day, and real-time rerouting to ensure reps hit high-value locations that drive the most ROI.

How does retail activity optimization reduce manual audit time?

Image recognition and automated planogram checks

Regardless of which customers offer the highest potential, ensuring that products are placed according to the planogram for all customers is critical to effective retail execution.

By using image recognition and analyzing it with KPIs from the planograms, the goal is to measure compliance and to improve sales performance, driving revenue and margin per square foot while also reducing cost-to-serve.

How image recognition reduces out of stocks and protects revenue

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From shelf photo to compliance score in seconds

In the past, field data relied on hours of manual data entry. Reps counting stock, checking price tags and completing audit forms. 

Image recognition revolutionizes this process. It replaces error prone manual inputs with a photo that captures the shelf. 

Within seconds, the image is processed with up to 95% accuracy, instantly identifying out of stocks, share of shelf and planogram compliance. This saves huge amounts of field sales audit time and ensures more store visits can be made across each route.

How does retail activity optimization prevent sales lost to poor shelf placement

Upwards of 43% of shoppers globally will switch brands if their preferred option is unavailable, per TELUS Agriculture & Consumer Goods 2026 Food & Beverage Study. A number of factors determine this. A product could be kicked down to the bottom shelf. It could be hidden behind a competitor. Worst of all, it could be left in the back room.

Whatever the reason, customers aren’t going to go digging. They’ll buy a competitor product, and move on.

Planogram compliance and sales velocity

Brands spend millions researching the perfect shelf layout to ensure customers see their brand front and center. When a store deviates from the agreed planogram, sales velocity almost always takes a hit. Retail activity optimization stops this revenue bleed by spotting velocity dips, and giving field reps the tools to make fast, profitable adjustments.

Catching out-of-stocks before they cost you sales

The most frustrating sale loss is when inventory is available, but the shelf is bare. Retail activity optimization tackles this through predictive alerting, prioritising these stores for urgent action to be addressed swiftly.

How does retail activity optimization prove ROI on trade and field investment? 

Connecting field activity to margin and revenue per square foot

CPG manufacturers average between 15-20% of gross revenue on trade promotions, per Infosys. This is a huge financial commitment. Retail activity optimization proves its worth by maximizing every dollar spent across each territory. Through data science, it links a rep’s physical actions to immediate shifts in margin and revenue per square foot, allowing teams to squeeze out increased profitability from their promotions. 

KPIs that matter for measuring RAO success

To measure the true impact of a retail activity optimization strategy, CPG brands must focus on commercial outcomes. The KPIs that should be prioritised are: 

• Incremental sales lift per prioritized visit 

• Out-of-stock (OOS) reduction

• Promotional compliance velocity

• Share of shelf vs. competition and segment targets

Tracking these metrics allows leadership to see exactly how much revenue was rescued by abandoning rigid, calendar-based routing in favor of data-driven intervention.

TELUS Retail Execution is designed to improve these essential KPIs using our proprietary tools:

KPI's

How is retail activity optimization different from retail execution and mystery shopping?

Retail activity optimization vs. retail execution

Retail execution focuses on what a rep does once they arrive at the store. Filling out audit forms, checking inventory, or counting SKUs are all activities that fall under retail execution’s remit.

Retail activity optimization dictates where and when each rep should go in the first place. Identifying high-priority stores that will maximize the value of their time on each given work day. 

Both work in harmony to create an efficient field sales force that drives greater profitability for your brand.

Retail activity optimization vs. mystery shopping and periodic audits

Mystery shopping and periodic audits are valuable to CPG manufacturers, but often occur only weeks after a promotion has already launched or a product has gone out of stock. The key problem: the profit leak is detected too late to make any changes. 

In contrast, retail activity optimization is a continuous process, which uses POS data and image recognition to flag issues as they occur.

To put it simply: retail activity optimization puts CPG manufacturers in a proactive state of discovery. Mystery shopping and periodic audits leave CPG manufacturers in a reactive state of discovery.

How TELUS Retail Execution can help

TELUS Retail Execution combines rapid AI image recognition with actionable data to help your field teams identify gaps and boost sales in record time. Our software is built to close the gap between your trade promotion strategy and in-store execution, with features such as:

• Smart route and activity planning to direct reps to high ROI locations

• Image Recognition scans full shelves in under 10 seconds with up to 95% accuracy

• Monitor retail compliance across pricing, promotions, planograms, displays and more to maximise selling opportunities.

• AI-driven sales recommendations to optimise on-shelf performance

Using our tools, teams can see up to 30% more weekly store visits, and full shelf reports in under 10 seconds.