One Stop - Automated planograms for localized demand
Leading convience chain sees double digit sales lift
One Stop is a leading UK convenience retailer; combining everything from Cereal to Cider they provide a number of services, including cash machines, Post Office and National Lottery. Operating more than 700 stores across England and Wales they currently have more than 9,000 employees.
The Business Need
One Stop and Galleria have been working together for more than a decade, during this time the retailer has taken their micro-space strategy on a constant evolution, from a crawl phase via manual space planning through a walk and run approach with full automation and optimization abilities.
Following exponential growth One Stop identified the next stage in their micro space planning evolutionary journey. The retailer identified an opportunity to further improve their customer centric strategy to support a greater focus on localized merchandising across their expanding estate.
The Galleria Solution
With a key focus on being the best store for customers in the neighborhood, One Stop needed a more powerful merchandising solution to support and facilitate that fresh fundamental focus. The Customer Centric Merchandising solution from Galleria provided a platform for fully automated and optimized planograms that meet individual, localized store requirements and drive dramatically increased customer satisfaction.
"The solution transformed the productivity of our project"Mervin Nugent, Senior Range Planner, One Stop
Over the course of their long standing relationship with Galleria, One Stop has made the transition from manual plan generation to the automation of over 30,000 store specific planograms per year.
"We’ve already seen great results from this latest project with Galleria"
The latest step in the evolution of their conjoined strategy saw the retailer realize impressive operational efficiency gains, caused in part by the additional ability to align inventory with a locally optimized assortment, which enhanced the shopping experience and increased customer satisfaction and loyalty across the brand.
"Some stores are seeing a double digit sales lift"
One Stop is one of the leading retail convenience businesses in the UK, with over 700 stores across England and Wales their sales exceed $1.41billion. With a strapline of “Making what matters locally better together”, their key business focus is to support the needs of local customers within the neighborhood.
Experiencing exponential growth in recent years, One Stop recognized that their traditional manual approach to space planning could no longer support the business in their drive for complete customer centricity. Recognizing an opportunity to become more intune with their customers, One Stop set about to review the organization of their current estate to learn more about the distinguished differences between customer groups, and as a result a number of new concept stores were established in early 2014. These stores would deliver the differences that the retailer identified; from an increase in fresh food availability to a greater concentration of convenience products.
The retailer’s existing methodology behind planogram production lacked the data integration required to combine merchandising strategy with sales data and store fixture information. This lacking functionality prevented them from being able to deliver high numbers of automated, optimized plans to store in an efficient manner.
They were looking for a chance to really reflect the consumer shopping variances across their estate.
One Stop’s mission to grow the business with new stores in the right location did not come without its challenges; employing a strategic approach to being the best store in the neighborhood through a customer centric approach, the retailer set out to offer tailored space and assortment that reflected the needs of their local customers.
One Stop also made a commitment to increase their strength in fresh food and own label products, whilst engaging with customers through a digital strategy.
Sewn into this strategy is continued investment in people, stores and technology. Giving stores the skills and tools to build links with the local community was amongst one of the most important tasks, to deliver this One Stop put priority on great managers in every store.
In order to fulfill their focus, the retailer identified a need to be able to deliver group merchandising strategy to store whilst maintaining a customer centric approach and enhancing their general operations.
In a drive to combat increased competition, expand market share and satisfy their own thirst for improvement One Stop set about implementing the next stage of their customer centric strategy in order to earn the lifetime loyalty of their customers.
Finding efficiencies which could be reinvested into the customer proposition supported their aim to be the convenience store of choice for customers based upon a detailed understanding of what they need and want.
Identifying that a localized approach was the most efficient way to execute on their strategy, the retailer set about to explore options for improvement. They began to question if planograms based on top down cluster averages was still good enough to win in a market as fierce as today’s environment. They theorized that not all stores of the same size, in the same location or under the same banner would be shopped in the same way. As a result, One Stop recognized the need to convert to a highly customer centric, store specific merchandising approach.
“We needed to gain control over the space and inventory at every store and create targeted space and assortment recommendations in every category within each store in line with our customer’s expectations” said Mervin Nugent, Senior Range Planner at One Stop.
In order to achieve this the retailer looked to adopt a system driven approach which would enable them to further analyze clusters of stores. This approach would enable them to tailor assortments more specifically to customer’s needs & such analysis could prove valuable information to the buying teams. In addition to this they acknowledged that assortment decisions should account for waste by store whilst also being able to maintain the correct days of supply on fixture.
It was imperative that the retailer should select a solution partner who was a respected specialist in their area, providing them with both stability and support, whilst providing flexibility for change. Ultimately they wanted an agile partner who understood the customer centric journey, someone they could collaborate with and trust. One Stop were looking for a collaborative relationship with a solution partner that would take the time to understand their business to help them achieve their short, medium and long term objectives.
With a rapport spanning over a decade, leading category optimization experts Galleria already had a proven relationship with One Stop. It is through Galleria’s Customer Centric Merchandising solution (CCM) that the retailer achieved the ability to create automatically tailored planograms which fit their individual store requirements whilst respecting Group strategy.
Being able to anticipate differences between stores or locations on any scale is a challenge, but when faced with a store estate as large and varied as that of One Stop it seemed impossible. With a generic approach all stores are treated the same, resulting in a generic plan being issued across the board to all stores on the estate, regardless of their individual space allowances or assortment requirements. This approach often results in wide variations of interpretation, which can extend to low levels of execution and compliance.
The traditional methodology applied by One Stop involved the merchandising team generating planograms manually, a method greatly hindered by the ever increasing store count. Additionally this approach failed to mirror the retailer’s localized and customer centric strategy and values.
Following a detailed customer consultation program One Stop identified that the generic approach was not the best solution for them and would not sufficiently satisfy the local and convenient retailers growing customer base. They were able to determine that much of their offering could be better tailored to meet the needs of their customers. With this opportunity in mind, the retailer looked to explore the potential of optimizing their offering, a gargantuan task for a retailer the size of One Stop. In order to get a greater insight into the best approach for their business they implemented a series of innovation stores.
Having identified three potential areas where improvements in customer centricity could be made; One Stop set about the conversion of their concept stores. Three of the retailers’ missions were to be affected, Grocery Eat Later, Impulse Food to Go and Tobacco News; in addition they were able to pinpoint a variance in the levels of affluence, which they determined could account for the fluctuations in shopper behavior across stores of an otherwise similar format.
Accommodating the planned adjustments required more than just merchandising and One Stop saw a further opportunity to review store space; the Intelligent Store Optimization (ISO) solution from Galleria was used to determine accurate macro space allocations and enable them to truly reflect the variances in space requirements from one mission to the next whilst also taking into account additional locally driven variables such as affluence or ethnicity.
“Using ISO as a consultancy exercise gave us targeted space planning recommendations for every category within the innovation stores. Providing quick analysis of large amounts of data the solution transformed the productivity of our project” said Mervin Nugent, Senior Range Planner with One Stop.
In a drive to enhance loyalty, One Stop set about to determine how best to give their customer what they want, where they expect to find it. Innovation stores were zoned as part of the initiative; segmenting specific items as indicated by consumer groups. This meant that items which might normally be purchased together would be stocked together, for example food consumed on a night in with friends such as crisps and snacks might be located close to alcohol. Due to the local nature of One Stop stores, they are often positioned within close proximity to schools, as such the potential for child relevant products increases, such as sweets, magazines, toys etc., items which could be easily zoned together.
As a result of the consultation the retailer was able to gain an understanding of the rate of sale by products in each mission, providing enhanced intelligence for the buying team and validating customer/ product fit, facilitating the inclusion of new products to the assortment where appropriate.
Additional functionality which the retailer found could be beneficial to their requirement was the ability to individually alter assortment offerings to reflect true localization options as defined by the store manager. Galleria completed extensive collaboration with the retailer in order to deliver an interactive web deployment platform for planograms which could enable store managers the ability to select specific products outside of the core assortment which could be added or removed depending on demand. The development of this functionality enabled Galleria to incorporate the retailer’s “local choice initiative”, providing the ability to build credible assortments with the additional assistance of local managers, those who know their individual customer base best. The retailer reported an increase in planogram compliance since the implementation of a customer centric approach that saw them consider customers by location.
In order to increase the productivity of each store One Stop chose to amend the offering within each mission to specifically suit the level of area affluence accordingly. Creating the custom offering that their consumers were crying out for was no mean feat and given the cost implications consideration had to be given to the kind of redevelopment the store required.
Having gathered the insights available – the retailer began increasing and decreasing range and space accordingly, based on purchasing priorities for the missions identified. The CCM solution from Galleria enabled great changes to be made across the three missions. Improvements to the Grocery Eat Later mission included increased space for fresh food, dovetailed with a decrease in both range and space for magazines and cards, amongst which an increase in like for like sales of chilled foods could be seen.
“The initial investigations into the Food to Go mission revealed that our customers would benefit from more chilled and fresh food, as a result we increased our offering of sandwiches, snacks and ready meals.” comments Mervin Nugent.
Had the retailer applied manual methodology to the generation of planograms they would undoubtedly have encountered the numerous difficulties associated with such large scale variance, problems which could not be rectified by staff training. Since each store has unique footprint it inevitably has different fixture layouts to accommodate the unique physical characteristics – meaning a generic plan will never be a perfect match for a unique store; this in turn puts the decision at the hands of the in-store staff and often results in such plans being disregarded entirely due to their inadequacy.
The only way to amalgamate such aggravations associated with manual planning on this scale would be to multiply operational resources tenfold; however the automation of store specific plans achieved through the use of CCM has reduced the requirement for an increase in resources, ensuring the retailer was able to retain a core operational team of experts. Revolutionizing their operations, CCM enables the retailer to automate in excess of 30,000 store specific plans per annum, a growing figure based on the success of the innovation stores, the results of which could see even wider variations across space and range between formats. One Stop also recognized an additional like for like produce sales increase.
Feedback from customers has been profoundly positiveMervin Nugent, Senior Range Planner, One Stop
“We’ve already seen great results from this latest project with Galleria” says Nugent, “Some stores are seeing a double digit sales lift, and feedback from customers has been profoundly positive”
Cleverly constructed convenience is by its nature convenient and therefore will continue to reinforce local customer loyalty through great value.
In future years there may be an excess of grocery retail supply at a national level but One Stop continue to retain a strong position in the market and as such should be protected against potential price pressures from other convenience retailers, whilst gaining and retaining customer loyalty.
Key benefits realized by One Stop
Since working with Galleria on this project, One Stop stores have realized significant benefits, including:
- Rapid assessment and revision of shopping missions
- Custom space recommendations
- Increased assortment & merchandising accuracy and efficiency
- Increase on planogram compliance
- 49% increase in like for like product sales increase
- 20% increase in like for like sales of chilled food
- Reduction of waste and shrinkage, particularly in perishables
- Enhanced customer satisfaction and loyalty
About One Stop
Founded in Wolverhampton in 1975 as part of T&S Stores plc, One Stop is a leading retail convenience store chain in the United Kingdom with 600 stores across England and Wales. Along with everyday essential items, One Stop Stores provide other services for customers including cash machines, postal services, national lottery, bill payment and home delivery of newspapers and magazines.