One Stop - Optimizing macro space
Intelligent Store Optimization allows leading convenience store chain to access store space quickly and accurately
Following a successful pilot exercise using Galleria’s Intelligent Store Optimization solution it was logical that the rest of the One Stop estate could benefit from macro space optimization. “We decided that we needed to optimize and manage macro space and micro space on a storespecific level,” said Mervin Nugent, Senior Range Planner with One Stop. Having developed a good working relationship with the company over the last decade, Mervin Nugent said they turned to Galleria for assistance. “Galleria’s initial work with One Stop involved their Customer Centric Merchandising Solution, which helped identify the proper category assortments within One Stop as we moved toward a more automated method of selecting product assortments for individual stores.” Mervin Nugent said. “Based on that engagement, we felt Galleria was up to the task on our newest challenge.”
Galleria and Intelligent Store Optimization (ISO)
Galleria was tasked to work with the One Stop management team to provide space and category planning services using one of the retail solutions within its suite of products – Intelligent Store Optimization, or ISO. ISO enables retailers to produce targeted, store-specific space recommendations for every category in an individual store – quickly and efficiently.
“We needed to gain control over the space and inventory at every store, and we also wanted targeted space planning recommendations in every category within each store,” Mervin Nugent said. “Galleria’s ISO solution allowed us to do that expediently.”
Commencing the project
The ISO project began with the evaluation of the space assigned to each product category in every store to determine if those categories were under-spaced, over-spaced or adequate – followed by store-specific recommendations on the ideal amount of space required for each category.
Initial trial, produces positive recommendations
“This part of the ISO exercise allowed us to look at the selling behavior of each product within each category,” Mervin Nugent said. “We provided Galleria the information necessary to determine how many days of supply we needed for each product and how much space within each store was required to satisfy our regular and case pack inventory requirements. Also, with ISO we can predict and track any uplift or decrease in sales based on the performance metric we’ve created within each individual store.”
Galleria initially ran a trail within five One Stop stores, consulting with Mervin Nugent about varying days-of-supply and inventory requirements while the different analysis’ were reviewed – and taking the client’s recommendations into account prior to running the chainwide exercise.
Through the ISO process, long-life product categories such as cereals or canned goods are differentiated from short-life, perishable items like fresh and chilled foods, which require a smaller amount of inventory – and a smaller amount of space on the shelf to meet their inventory requirements.
“Obviously, there are some categories, such as greeting cards, that don’t need as much space,” Mervin Nugent said. “However, Galleria’s representatives worked with us in those cases where some of the initial findings didn’t look as if they offered a credible range.”
Developing space recommendations
In developing space considerations, One Stop and Galleria worked together to feed technical requirements into the ISO process, including product dimensions, to determine how much space each product took up on the shelf.“The data requirements are an important part of the ISO exercise,” Mervin Nugent said. “We also had to allow for categories that reside in the aisle of the store and wall fixtures where we couldn’t simply swap out space because they were different dimensions, as well as chilled or frozen products. ISO allowed us to stipulate that restriction into the exercise and we ultimately received very credible results.”
Through ISO, Galleria identified that grocery non food & grocery food were over-spaced, while impulse items , chilled fresh products and off-licence goods were under-spaced. As a result of the exercise, 10 percent of total space was freed up throughout the One Stop chain – which included four new promotional bays at each store. (The ISO software had been adapted to fix the promotional category at four bays, but could have been fixed at two bays with the flick of a switch.)
One Stop were impressed with the ease and speed in which the ISO solution was implemented across the One Stop chain of stores.
“The ISO solution does all the work and doesn’t require a lot of additional analysis and data entry, so it was extremely painless on our end,” Mervin Nugent said. “ISO also comes with built-in reporting capabilities that provide not only the analysis, but can be easily read so we could understand where any changes were made. With it, we were able to review more than 500 stores in two days. Without the ISO solution, it would have taken us months to accomplish that. The time savings are substantial.
A team approach
Mervin Nugent said he was also impressed with the collaborative approach that Galleria has exhibited while working with One Stop. In recognition of that, the convenience store chain honored Galleria with a Values Award for its earlier implementation of the Customer Centric Merchandising Solution across the chain – making Galleria one of the first outside suppliers to receive the honour.
“They work alongside our employees and really develop a team approach on these projects…presenting recommendations, getting feedback to check the validity of their findings and tailoring the results when necessary,” Mervin said. “The recent award Galleria received from One Stop demonstrates how good our working relationship has become.”
With the ISO exercise, Mervin said Galleria worked hard to ensure the outcome of the project was the best it could be. “In addition to helping us make thoughtful decisions on spacing decisions for our customers, it’s also given us insight into areas of growth that were traditionally not our core focus.”
Key benefits realised by One Stop
Since implementing the recommendations One Stop stores have realised significant benefits including:
- Freed up 10 percent of total space
- Increased merchandising effectiveness
- If all the ISO recommendations were implemented One Stop could see a significant sales & profit increase.
- Store specific product execution
- Rapid assessment of many retail locations
- Limited analysis work required
- Reduction of waste and shrinkage, especially in perishable categories
“We were able to review more than 500 stores in two days. Without the ISO solution, it would have taken us months to accomplish that. The time savings are substantial.” Mervin Nugent, Senior Range Planner, One Stop