ecr europe forum '05. shopper. case study selex barilla
DESCRIPTION
The latest update on 10 years’ experience with demand-side implementation, with special emphasis on shopper value, category growth, POS data management and excellence in execution through the power of collaboration at the store level. Four case studies take a fresh look at product development and introduction, efficient promotion, assortment and merchandising.TRANSCRIPT
CONSUMER MARKETS
ADVISORY
Efficient local assortment differentiationSelex – Barilla case study
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Who we are…
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Selex
2004 Turnover € 6,300 million
Marketshare 7.6%
2,646 stores in the Hypermarket, Superstore, Supermarket and convenience channels
5th largest retailer in Italy
22 associated groups with around 25 storebrands
Associated firm leading the project of this case study is Megamark (142 stores) with storebrand:
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Barilla
2004 Turnover € 2.5 billion
Leader in pasta and crispbread
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Pasta: the essence of Italy
Ranked among the top 10 in the Italian grocery business
Champion of Italian gastronomy:26 Kg per capita, 4.000 SKU’s, 140 manufacturers
Highly localised People needs…Pack sizeUnusual shapesLocal players
Need to manage the Category meeting local expectations while remaining efficient
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Our joint project on the Pasta Category
Category Management project in South Italy
Scope: 130 storesSmall super format (400-1000 m2)Puglia region – concentrated on 5 regional cities
Objectives:Improve performanceImprove efficiencyLeave room for local flexibility
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The situation at the start of our joint project…
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We soon realised that the overall performance of the category was outstanding …
…our sales were largely in line with the regional market
2,2%
2,8% 3,0%
Pasta share of store sales
Italy Region Selex
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The problem was the level of service to the shopper and low in-store efficiency
More space to the category than others… but many OOS’s and high ordering & replenishment costs
lots of products with only a single
facing
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Our assortment was similar to that of a hypermarket …
…but we are a chain of convenience stores and small supers!
273 278
RegionalHyper+SuperBenchmark
Selex
Average number of items on shelf
3890
RegionalHyper+SuperBenchmark
Selex
Average number of specialty items on shelf
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We had more space and many more items than our competitors…
…and little correlation between cluster size and assortment
Cluster Large
Cluster Medium
Cluster Small
Number of items per cluster and zone
competitors
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WHY?
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Pasta is a priority category for all retailers in the Puglia region
People are more demanding then in other areas in Italy – brand loyalty and variety of choice
People change stores if they do not find their brand
People are highly “vocal” – especially in small store formats they tend to ask for their brand…
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The decentralised management of the pasta category has some negative side effects
Assortment open/available to all stores
Assortment decisions, ordering and merchandising left to store managers
High level of resistance to imposing restrictions as in other categories!
Offering not based on market knowledge
Little continuity of the offering
No retail network efficiencies
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Our approach…
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Our approach was based on three criteria …
1. Improve service to the Shopper– Product availability in pasta– Continuity of the pasta offering– Completeness of the overall store offering
3. Improve the efficiency and effectiveness of assortment and display
5. Leave some freedom to store managers to customise their assortments
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The first two objectives needed category management expertise
FROM TO BASED ON
14.5 mt. shelf
290 items in assortment
92% market coverage
13.5 mt. shelf
250 items in assortment
92% market coverage
Fixed number of shelves
Fixed number of items by brand
Store clustering and system of 3 zones
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Change management proved a key part of the project!
The objective to provide store managers with some freedom to decide, was more difficult…
no mono
facings
Clear brand profile
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We devised a tool to set guidelines for managing the assortment at store level
Fixed Flexible Fixed Flexible Fixed Flexible
Fixed Flexible Fixed Flexible Fixed Flexible
Fixed Flexible Fixed Flexible Fixed Flexible
• Granoro• Divella• Barilla• Garofalo
• Barilla• Divella• Granoro• Riscossa
• Divella• Granoro• Riscossa• Garofalo
• Granoro• Divella• Barilla• Riscossa• Garofalo
• Divella• Granoro• Barilla• De Cecco• Garofalo
• Barilla• Divella• Granoro• Riscossa• Garofalo
• Granoro• Divella• Barilla• Riscossa• Garofalo
• Granoro• Divella• Barilla• Riscossa• Garofalo
• Granoro• Ambra• Divella• Barilla• Garofalo
• De Cecco• Voiello
• Voiello• De Cecco
• Barilla• De Cecco
• De Cecco• Voiello
• Riscossa• Voiello
• Voiello• De Cecco
• Ambra• De Cecco• Voiello…
• Ambra• De Cecco• Voiello…
• Riscossa• De Cecco• Voiello…
Cluster Small
Cluster Medium
Cluster Large
Zone A Zone B Zone C
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The tool mixes flexibility and strict rules to reduce the risk of mistakes
A fixed and flexible assortment component
Guidelines for the flexible component differentiated per cluster
SKU’s rankings to support brand choice for the flexible component
Guidelines for managing promotions
Guidelines for implementation
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Results…
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The results show an over-performing shelf with improved standardisation
ASSORTMENT
SPACE
SALES
- 14 %
- 7 %
+ 6 %
max
min
max
min
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In the freed space we could merchandise complementary products …
Pasta and pasta sauce on the same shelf to favour joint purchasing
Pasta sauces
Oven sauces
Pasta
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Let the store managers talk …
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Grazie!