Introduction
One Stop is a leading UK convenience retailer. Combining everything from cereal to cider, it provides a number of services including cash machines, post offices and The National Lottery. Operating more than 700 stores across England and Wales, it currently has more than 9,000 employees.
Background
Following a successful pilot exercise using RELEX’s space and assortment 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 store specific 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 it turned to RELEX for assistance. “RELEX’s initial work with One Stop helped identify the proper category assortments as we moved toward a more automatedmethod of selecting product assortments for individual stores.” Mervin Nugent said. “Based on that engagement, we felt RELEX was up to the task on our newest challenge.”
RELEX was tasked to work with the One Stop management team to provide space and category planning services with its space and assortment solution.
RELEX’s solution 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. “RELEX’s solution allowed us to do that expediently.”
Commencing the Project
The 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 Results
“This part of the project exercise allowed us to look at the selling behavior of each product within each category,” Mervin Nugent said. “We provided RELEX with 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 the RELEX solution we can predict and track any uplift or decrease in sales based on the performance metric we’ve created within each individual store.”
RELEX initially ran a trial 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 chain wide exercise.
Through the trial 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, RELEX’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 RELEX worked together to feed technical requirements into the system, including product dimensions, to determine how much space each product took up on the shelf. “The data requirements are an important part of the project 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. The solution allowed us to stipulate that restriction into the exercise and we ultimately received very credible results.”
Through the project, RELEX identified that grocery nonfood & 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% of total space was freed upthroughout the One Stop chain – which included four new promotional bays at each store. (The RELEX 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 was impressed with the ease and speed in which the solution was implemented across the One Stop chain of stores.
We were able to review more than 500 stores in two days. Without the RELEX solution, it would have taken us months to accomplish that. The time savings are substantial.
Mervin Nugent, Senior Range Planner, One Stop
“The RELEX 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. “It also comes with built-in reporting capabilities that provide not only the analysis, but that can also 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 RELEX 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 RELEX had exhibited while working with One Stop. In recognition of that, the convenience store chain honored RELEX with a Values Award for its earlier implementation across the chain – making RELEX 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 RELEX received from One Stop demonstrates how good our working relationship has become.”
With the initial project, Mervin said RELEX worked hard to ensure the outcome 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.”