In a recent interview on WGN, Bob Mariano, the CEO of Roundy’s was asked the question “What makes a great grocery store?” His response focused on customer care: “A great grocery store is made up of great people that care about their customers and go out of their way to make them feel appreciated.” Today, Mariano’s competes against global companies like Trader Joes and others and plans to merge with The Kroger Company in late 2015. But they still regard themselves as “neighborhood stores” focused on service and operational excellence.
So how do they do it? The answer rests in relentless dedication to daily execution.
When Mr. Mariano mentions that great grocery stores are comprised of great people, people that care, he infers that stellar execution drives customer satisfaction.
Great groceries rely on an underlying infrastructure of knowledge, insights and collaboration to better serve the customer. The fuel powering great grocery is often linked to important aspects of operations - supply chain, merchandising, planning and daily execution. The tactical side of operational efficiency is strongly tied to the shopper experience through promotional effectiveness, new item introductions and on shelf availability. For all of this to work, a unified supply chain and data visibility needs to support retailer-supplier collaboration.
Let’s quickly address the role of data and analytics in this approach.
Modern solutions to retailer-supplier collaboration hide the complexity involved in stitching together data from disparate systems. Users don’t need to harmonize data from merchandising, point of sale and inventory systems with external factors like weather and demographics. Make no mistake about it, the advanced analytics used to create intelligence are inside. They rest comfortably behind a curtain of actionable insights that tell the tale about customer wants and needs, promotions and price, long term planning and daily execution. Flawless execution means merchandising specialists, category managers, replenishment buyers, and supply managers apply the right lens to quickly discern meaning buried in the noise. They arrive at answers that lead to action in support of the customer. Modern solutions in retailer-supplier collaboration enable analysts to anticipate challenges through proactive alerts that literally point them to a potential problem along with the lead time needed to react.
Here are four key areas for effective collaboration:
Four Focus Areas of Collaboration
Unified Supply Chain
A unified supply chain is comprised of integrated data that shows the relationship between supply and demand. With detailed visibility into days of supply by store, product and day, analysis is blended with forecasted demand, delivery dates, distribution center inventory and more. Grocers proactively plan upcoming promotions, anticipate new orders and relocate supply. A unified supply chain affords both parties the ability to pivot translating into better execution, lower post-promotion inventory levels and supply that closely matches demand. A unified supply chain has the ability to increase on shelf availability and raise customer satisfaction. Retailer and supplier synergy allow these formerly disparate organizations to act as one in support of the shopper.
Efficient growth planning allows retailers and suppliers to analyze historical transactional data, factor in a new set of assumptions, collaborate and reach agreement. A blend of visibility, managed change and notifications leads to faster, streamlined planning cycles. The ability to do this efficiently, react quickly, course correct when needed and communicate in a world where immediacy carries new found weight is of paramount importance today. These topics have taken center stage as retailers fight for market share at a time when the splintering of the consumer is becoming more common.
When store managers begin their day, it’s all about execution. What can we do to ensure new events run smoothly? Are the displays located correctly? How will new item introductions perform? The commitment to in store execution is both relentless and time consuming. Faced with these challenges, store managers and merchandising specialists are now focusing on improving the odds of success. Imagine where instant access to granular analytics by store, product and day are used to identify out-of-stocks. Imagine where days of supply are factored in, alerts notify replenishment buyers and communication with supply managers leads to higher on shelf availability and successful promotions around the holidays. These examples highlight how new forms of analytics are guiding daily, in-store execution every single day.
Price, promotion, product and placement – the fundamentals of merchandising are forever linked to data and analysis. Retailers are justifiably consumed with tuning the mix as they introduce seasonal items, clear inventory and attract new shopper segments with new promotions. Shelf facings, assortments and merchandising platforms designed to simplify the shopper experience while increasing the basket act as the spice in a recipe that drives grocery day in and day out. Merchandising decisions grounded in facts maximize the grocer’s chance for success. Finely tuned metrics addressing these issues are becoming an essential part of operational execution.
Successful grocers leverage up to date information and analytics to help drive their business. Organizations that recognize this competitive advantage stand a greater chance of improving operational efficiency and in so doing, free up time to address other pressing challenges such as omni-channel or working with local brands to introduce new products.
Roundy’s and more than 1,000 U.S. companies in consumer package goods and grocery collaborate using Market6 to optimize retail operations every day.
Tony Agresta is the Senior Director of Marketing at Market6. Market6 provides web based retailer-supplier collaboration solutions that drive insights and deliver measurably better results. Today, Market6 has over 1,000 suppliers and retailers using these solutions. Read how they have achieved success.