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Georges Le Nigen, Retail Solutions. Powering Retail Execution Management. Grow sales with ePOS data-powered collaboration. October 12 th , 2012 Praesidium Edition. Agenda. Where to find key opportunities What are the main barriers and how to overcome them
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Georges Le Nigen, Retail Solutions Powering Retail Execution Management Grow sales with ePOS data-powered collaboration October 12th, 2012 Praesidium Edition
Agenda • Where to find key opportunities • What are the main barriers and how to overcome them • Think Big ! Program vs. Pilot • Next Steps for Success
Observation #1: The End-to-End Supply Chain is Silo’ed and Not Fully Equipped Supplier DC Retailer DC Store Shelf Shopper Consumer DC Production Supply Chain Sales Marketing BlackBox • ENTERPRISE-LEVEL SOLUTIONS • ERP • Supply Chain Management • Supply Chain Execution • Syndicated data • TPM/TPO • Shopper Insights • Predictive analytics • Space planning • Spreadsheets
Observation #2: There is a Huge Value Potential to be Captured at the Store Level 2010-… Focus 1990-2010 Focus 1990-2010 Focus TheBlack Box Shopper Consumer Supplier DC Retailer DC Store Shelf CPG Forecasting Error: 45% Promotion Missing their Targets: 40% Promotion Display Non Compliance: 35% NPI Failure Rate: 70-80% OOS: 8% (Promotions: 16%)
The Key Principles of Value ChainCompetitive Differentiation
500 Customers Some of our Customers
Club Stores Our Retailer Coverage Drug Grocery Europe Home Improvement (France, Int’l) (Belgium) (Italy) (France, Italy,Belgium, Int’l) (UK) Mass Stores (UK) Other (Int’l)
ePOS-based collaboration with EU retailers
Translating Epos Data into Value Opportunity Key Levers Solutions • Out-of-Stocks (Phantom, Shelf, D-voids) • Item Distribution • Promotion Effectiveness • Retail Intelligence • Retail Visibility • Intelligent Zero Scans • On-Shelf Management +3.5%per $1bn in revenue Revenue +2-5% - -5% Inventory -5% • Forecasting accuracy (safety stock impact) • POS-Based Forecasting +1.8% Margin • Unsaleables and markdowns • Promotion pricing +1-2% • Retail Intelligence • Retail Visibility
Opportunity is proven… …So why not all retailers are sharing Epos data with all suppliers ?
Barriers to Overcome Complexity of reports Reliability of forecasting models Suppliers vs. Retailers Poor quality Granularity Number of stores covered
The top 5 collaboration roadblocks RETAILERS SUPPLIERS “If suppliers want data, they have to pay for it” “I do not want suppliers to challenge the execution of my stores” “Suppliers will use the data to sell more stocks to me” “ I do not want to be overwhelmed by hundreds of suppliers sending reports and alerts” “My priority is private label” “No resources” “I do not believe in retailer data” “I do not want to pay to measure store execution (I have already a sales force for that)” “This is a supply chain subject” “Even if I send reports/alerts to my customers, nobody will take action- stores don’t care”
Key factors of success PROGRAM, NOT PILOTS METHODOLOGY Most Successful companies have a full OSA program Identify Opportunity Get commitment from top exec Define Processes Choose Partner Measure and correct GOVERNANCE
POS-based collaboration: Building Process Guidelines Example
OSA 2.0 Retailer specific processes
Today s Best Practice:A Demand-Centric Organization HQSales DemandPlanning/Forecasting FieldSales/OSA Commercial Real-time, GranularCustomerData SC/Ops Marketing Replenishment TradePromotions InventoryManagement CategoryManagement
Organization:Building the Right Sponsorship • Typical functions: • President of sales • SVP, Supply Chain Functional reporting to the sponsor May be a different function per team, depending on priorities
Organization:Key Resource – Program Management Office • Program Management Office • Profile and Experience • Both supply chain and commercial experience • Director- (preferred) or Senior Manager-level • Innovative and strong-minded – natural-born sales person, good communicator • Goals and Objectives • “Sell” the initiative locally • Support on-boarding • Set up and implement training structure – corporate and local • Create best practice identification mechanisms – at the corporate level • Identify and convince new retailers • Communicate results (both upwards and transversally) • Reward Mechanisms • Number of teams rolled out • Process adoption maturity within countries • Project ROI
EPos Data Quality ManagementWhy do businesses need an expert ? • Across over 60 retailers, including 70% of the top US, UK, Europe retailers • Over 600 rules to ensure data integrity • 70 data quality experts 3-year history at the day-store-SKU level, data resets Store- and item-attributes, internaldata series… • Full harmonization across retailers, against supplier calendars, data hierarchies
A single source of data, many applications How would you use datasharing with your customers ?
OSA 2.0 The RSI 3D Process for Success™
Size of the Prize: Top 10 Key Use Cases that Drive ROI • Promotional Store Allocations(out-of-stocks, revenues) • Intelligent Zero Scans(out-of-stocks, revenues) • New Product Introductions(revenues, ACV%) • Distribution Voids & Gaps(out-of-stocks, revenues) • POS-based Forecasting(inventory, out-of-stocks) • Promotion Design / Selection(revenues, margin) • Run Down Management(markdown $, margin) • Micro-Assortment Planning(revenues) • Expanding Points of Distribution(revenues) • Unsaleables Reduction(reclaim%, margin)
OSA 2.0 New Product Introduction
Retail IntelligencePromotion Analysis: Price Elasticity Analysis
OSA 2.0 Promotion Analysis
Next Steps • Measure Sales Growth Opportunity • Promo, New Products, Distribution… • Get Commitment from Top management • Define process of collaboration • Choose best partner for data+technology+support • Measure results, fine tune systems and processes