Store and category clustering
Fulfilling a customer centric strategy relies heavily on understanding the variation in customer shopping habits and how they can best be served to maximize performance and to earn the life time loyalty of customers. Often retailer driven clusters are top down and by store, driven by store format, store size, geography, demographics or the location of distribution centres, a by-product of many years of increased supply chain efficiency, however do customers really see the shopping experience in the same way? By achieving a more granular understanding of the category performance it is possible to both respect the retailer driven top down clusters, whilst at the same tome honing the category strategy with a bottom up approach to better target Price, promotion, marketing initiatives, assortment recommendations, and product distribution and merchandising strategy with subsequent planogram production. The Galleria team work on a daily basis with suppliers to provide the very best actionable insight.
Most suppliers that we speak with rate getting product listed and increasing the distribution of the products across their retailer customer estates as one of their key initiatives. However the process of assortment planning grows ever more complex. Balancing the factors that ultimately provides the best possible and credible assortment within a given amount of space is a challenge. In addition to key performance measures, like value volume and profit contribution it is equally important to understand the depth of the assortment (how many different SKU’S) and the breadth (how many size variants) of the SKU’s that we need to stock. This coupled with propensity, products that might not contribute to well on a performance basis, however are very important to the consumer, business transfer and space elasticity make the conundrum even more fascinating. Back in 1989 Galleria was formed on the back of bringing space aware assortment solutions to the market and has a vast experience in crafting consumer decision trees that both achieve supplier objectives with regards to product listing and product distribution, whilst supporting the retailer’s category strategy.
Micro space planogram production
The role of the supplier with regards to planograming is increasing over time. Yes the retailer heavily relies upon the supplier to provide the high level merchandising strategies that are encapsulated within planograms; however the customer centric journey means that retailers are demanding more and more specific plans, right down to store specifics for many categories and they are increasingly relying on the supplier community to satisfy this requirement. Ensuring that strategy does not remain a philosophy relies upon accurate planogram production and execution by the store. In addition to advising on merchandising best practice and producing strategic planograms, the Galleria team are able to utilize the highly advanced Customer Centric Merchandising solution to facilitate the mass production of planograms at both a cluster and store specific level. Using this advanced technology produces thousands of planograms with very low error rates which results in a highly competitive planogram service for our supplier customers.
Macro space analysis
Considering that stores are owned by retailers we are encouraged by the increased requests from our supplier customers to complete macro space analysis. More and more retailers are turning to suppliers for strategic advice and space recommendations at a department, zone, aisle and sub-category level. In addition to grass roots experience in the art of store analysis and planning the Galleria team has access to ISO, Galleria’s Intelligent Store Optimization solution, which provides a comprehensive array of analytical tools, including elasticity and or inventory demand driven models that forecast the most appropriate space recommendation. The results can be driven by Shopper insight data in addition to EPOS data to help drive business strategy and furthermore the solution assists the team in understanding the likely impact of the recommendations, resulting in the forecast of increased or decreased performance as a result of change. The service can be performed upon individual stores and clusters with results produced at the department, category, zone or aisle level. If required the results can be used to produce schematics of the store.
It is an accepted fact in the food retail business that over a third of all sales now come from promotions, so why gamble a promotion display that does not reflect the sales of an individual local store? Galleria currently works with suppliers to achieve the best use of promotional space by optimizing the assortment and space by store. By offering an assortment that meets the unique local demand in the right quantity, the sales will increase and product will stay in stock for longer, however it will also reduce the level of unsold stock after the promotion has finished. Accurate planning means that our supplier customers achieve the product distribution that they expect and achieve the promotional mix that meets consumer demands. Timing of a promotion, both product and deal, is critical to driving your business strategy. In addition to advising on promotional strategy, the Galleria team is able to utilize the highly advanced PDO, Product Display Optimization solution to get the very best performance from the promotional activity.
In addition to training Galleria software solutions, the team have many years’ experience in retail and are ideally positioned to provide tailored training across the spectrum from business to IT. Focus is placed upon combining business best practice with “a day in life” from a business process perspective to ensure that the training allows the recipient to apply the experience to their individual organisation and to reap business benefits as soon as is possible.