Well a lot of the time its actually not true. The systems may be kind of connected and they are definitely connected to the overall system but the information is not actually flowing the way we want it to. Or the way that it was envisioned to. Let me give you an example.

Space Management Systems are connected but the only access to the information are the people creating the planograms. That’s ok, but what about the others that are making decisions about the planograms or that may impact them. Category wants to see the flow and the products, new items need to be listed and be available in the warehouses. DSD suppliers need to know that the items are now listed so that they can provide them to the stores, CAO (Computer Assisted Ordering) systems need to have the items added so that they show up in their systems. New planograms need to be sent to stores for the right stores and the right size sections with the right assortments, Etc.

So the question is, how many times in just that one scenario are we having to intervene manually? I can tell you for sure that there are systems out there that require intervention manually at every one of those points just mentioned. We may be manually sending pdf files to category, planogram pdf files to the stores and many times, they need to figure out which one is their store’s planogram. We usually send a manual note to the buyers, and also a verification note that may be behind because of workload to the DSD suppliers. Removal of old items aren’t streamlined and pricing isn’t set.

It doesn’t have to be like that. Imagine a world that is able to automate from a simple change with a listing for all the planograms to be flagged for change, buyers properly notified with a sku to remove as well, timelines that are automated for executing price reductions, notes to vendors for pick up of old items or to ramp up delivery for new items etc. This has been possible for sure since the late 1990’s. I say for sure because we were already doing it. CAO systems were being automatically updated with delist and new item summaries being sent to the stores and whoever else may need to know.

Integration of systems can be done. The efficiencies in first to market strategies, network communication and reduction in error rates gives large return on the investment. You can also automate reports to give quick analysis of old vs new planograms at 4 or 6 weeks to ensure that the decisions that were made were correct. Auditing and review work can be done to make it so that if changes in planograms for either flow or assortment are required, we can have the stores make the changes, communicate the changes with an FM gun and have the planograms automatically updated in the database.

Technology can do amazing things, but just like developing a house with plumbing, electric, walls, foundation, house tech etc, you need an overall plan and method to get what you actually expected.

How can we do that? We start with the end result that is actually wanted. And then we actually determine what tools we have. And then, we build the plan. It doesn’t have to be expensive, it has to be efficient, effective and meet the needs of the different business units.

I have previously been part of having done this successfully in both Canada and the US for both grocers and for non food retailers. And the difference that it makes is incredible. To the business customers, the stores and the store customers.

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Its the same with many of the departments or categories in retail. I will relate the story that I heard from a senior member of a very large and very old retail company in Canada about shoes.

In the 1960s and 70s a very large department store chain was the key place to go for shoes. They sold more than 60% of all the shoes sold in their national market at the time.

An analyst realized that almost 85% of the sales were done in only 2 brands that made up less than 10% of the space that was currently allotted to shoes at the time. When this was brought to the attention of the personnel in charge, they determined to cut over 75% of the space out of shoes. Keep the brands that sold and increase the space they were being given. Then they would take the extra space and designate it to different departments. Within 3 years, the department store chain had lost its market share and struggled to be relevant ever again in the shoe category.

What happened? They were no longer in the shoe business. When consumers started demanding assortment, it opened the door for a flood of new shoe store chains to come in. And they brought assortment, price and service.

The learning is that we need to understand most of the time what kind of a category or department you have. Is it just about a commodity such as bathroom tissue, or is it about meeting the demand of assortment such as baking? As we work through our categories and department assortments, we need to determine the damage that can sometimes come from too little assortment in assortment or variety driven categories vs the commodity categories. Some people want chocolate cake and some people want swiss chocolate cake and some people want devil’s food cake. We need to understand what the needs and the buy cycles are of the consumer and ensure that we are meeting their needs as much as they are meeting the needs of the company. Because if we are too far removed from the consumer, we begin to make mistakes that could cost us market share just like the shoes.

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