Source: Oliver Wyman consumer survey
Food retail stores in Germany: profit simulation based on a 5% online market share
Online retail is primarily a threat to full-range retailers’ store networks
Full-line retailers
Small supermarkets
Discounters
29,000
16,000
11,500
3,500
15,000
10,000
Up to -3%
Up to -15%
31,000
“World-class fresh” requires good teamwork
Excellent in-store execution
Best product quality right up to the shelf
The right volumes at the right time
Close collaboration with suppliers
The perfect range store by store
The perfect product presentation
•
Partnerships / vertical integration
Exchange of data and best practices
Integrated view on the supply chain (cost, speed)
Leading regionality and locality, as well as a culture of assortment innovation
Local adjustments to each store’s assortment
Short ordering lead times for the stores
Store ordering processes and tools
Integrated supply chain with integrated merchandise planning
The perfectrange storeby store
Right collaboration with suppliers
World-class fresh
Forecast accuracy
Optimum packaging/ order units
Service staff, as appropriate
Right space allocation for each department and item
Consistent standards across the supply chain
Temperature control right up to the shelf
Quality assurance processes and systems
Product specifications
Fair targets and incentives for each store
Best-practice process standards, simple tools & aids, and training sessions
Rigorous customer- and quality-centric culture
QUALITY ASSURANCE SYSTEM
Product quality and freshness needs a multidisciplinary approach
Product quality as purchased by consumer
Shelf maintenance
Store handling
Picking and delivery
DC quality control
Product volumes
Supplier management
Right space allocation
Consequent removal of shrink
Local delisting of permanent shrink-drivers
Quality-focused store operating model
Educated product handling
Careful handling of sensitive goods
Right storage temperatures
Right storage and delivery temperatures
Fast turn-around in DC
Inventory data and store insights
Short store lead time
Forecasts and order recommendations
Transparency/feedback loopson results
High quality control coverage at DC reception
Monitoring and escalation
Supplier selection and management
Clearly defined product quality standards, easily accessible for entire organization
Product specs
Quality Control System
• • •
Quality-focused store operating model Consequent removal of shrink Local de-listing of permanent shrink-drivers
• •
Right storage temperatures Careful hand-ling of sensi-tive goods
Picking & Delivery
Fast turn-around in DC Educated product handling Right storage and delivery temperatures
DC Quality Control
High quality control coverage at DC reception Transparency /feedback loops on results
• • • •
Forecasts & order recommendations Inventory data & store insights Short store lead time Right space allocation
Supplier screening and selection Quality performance tracking Supplier suspension criteria Trustful collaboration
Clearly defined product quality standards, easily accesible for entire organization
Taste quality control assurance process
Strong quality communication and information/education to clients
Weather impact
Cannibalization
New and discontinued products
Promotions and price changes
Holidays and events
Seasonality and trends
Orginal forecast
CALENDAR WEEK
OTHER SUCCESS FACTORS INCLUDE:
MEAN FORECAST ERROR (%)
IMPACT OF WEATHER ON FORECAST ACCURACY. EXAMPLE: GERMAN BRATWURSTOTHER
Accurate weather forecasting can be a key factor in determining success in fresh
Weather-adjusted forecast
30
50
40
25
0
20
10
Part of the assortment is changed frequently, giving customers the chance to consistently explore and find inspirations
Highly dynamic fresh range
Strong presence of regional, sub-regional, and local products and specialties
Leading regional and local offering
Store-specific supplemen-tary products, aligned with each store’s specific customers in the catchment area
Store-specific range extension
Well defined core assortment based on store cluster and sales magnitude, differentiated by season
Cluster-specific core range
Strong presence of regional, sub-regional, and local products and specialties.
Store-specific supplementary products, aligned with each store’s specific customers in the catchment area.