Any retailer, CPG or academic is invited to participate in any of the working group meetings participate, at no cost. Each session will start with a retailer case study or new research study, the group will then discuss the learning points. Be ready to contribute to the discussion.
The use of RFID in apparel retailing to count items using a hand held reader is now well established, with other categories such as furniture, electronics and others also being explored in those retail outlets, mostly fashion, general merchandise, sports and department store channels. What has not yet been established is the use of RFID in the supermarket / grocery retail channel. This session will discuss the possible use cases, hear from some examples of those use cases being trialled or even deployed that can help the fresh and ambient categories sell more and lose less.
While many retailers in Europe and USA will not present fuel for payment without pre-payment, some retailers, in some markets such as the UK, have a history of letting the customers fill up and then to make the payment, request they go into the store where they ideally make another purchase, a coffee, some confectionary, newspapers, essential foods, etc. This approach to fuel payment has proven to be highly successful, with retailers enjoying the often high margin incremental sales while being able to withstand the risk of customers not paying for their fuel, by either driving straight off the forecourt or declaring they have no means of payment.
However, the recent price increases have challenged the status quo of these retailers, with the potential risk of a growth in non payment and drive offs. In this session, we will explore what data retailers have on any change in risk levels, the possible counter measures to these risks, including technology such as ANPR / LPR, and then the role of collaboration with the police.
In our initial ECR research (click here) on food waste, we highlighted the different interventions that could shift the efficient frontier (see image below) to the right. The research called out the opportunity to reduce the minimum case size shipped from the DC and the addition of one extra shelf life day to the products. Both gave impressive results, however both required a degree of collaboration with external parties, which inevitably made them harder to deliver.
Also highlighted in the ECR research, and perhaps easier for retailers to execute as it requires less cooperation with others, was the concept of OSA service level differentiation, where the OSA targets for some items in the assortment, such as the slow sellers, were set to be lower than others in assortment, such as the fast movers. In the modelling, by setting the OSA at 3% lower for the slower sellers and 3% higher for the faster movers, a 13% improvement in food waste was predicted.
In practice, we have already seen the benefits of OSA service level differentiation strategy evidenced in the Meny bakery case, where the Category Manager intentionally planned for many of the 50 sku's in her bakery assortment to only be available in the morning, with a plan for those items to be out of stock in the afternoon. Recall in this case study, she reported that their end to end approach (they also looked at production planning, etc) delivered a 34% reduction in waste with no sales reduction, the OSA service level differentiation strategy was a major contributor to these impressive results. Click here to read an overview of this session and to request the slides and recordings.
In this session you will hear from the academics about the impressive results they have been able to model using service level differentiation, the group will then discuss these findings, sharing how retailers in the group are / are not leveraging service level differentiation as a strategy, and the categories that are most advantaged to this strategy beyond bakery.
Retailers reported in a recent study that 23% of unknown loss could be attributed to self checkout, so it is unsurprising that there has been a huge focus on managing losses at the Self Checkout, however, and as one retailer discovered, losses from the main bank tills can be bigger than self-checkouts, or at the least a significant problem that has not recently had much attention from the loss prevention team.
In this session we will hear from retailers who are adopting new approaches and technologies to monitor and manage losses attributable to the assisted checkouts.
Age restricted items, such as knives and alcohol, in certain countries and retailers, can trigger up to 15% of the interventions that need to be made the self checkouts. These interventions frustrate and slow down the [obviously] over 25 customers, while creating the opportunity for challenge with other customers.
In this working group session, the group will turn its attention to the use of age verification video technologies at SCO, with insights from retailers actively pursuing a scaled deployment in pursuit of colleague safety, productivity and customer satisfaction (fewer interventions)
Product returns, often 3-4X greater with online retail Vs bricks and clicks, and for some categories in excess of 25% of total sales, significantly impacts the profitability of online retailing while compounding the environmental impact the organisation has on the planet.
In the world of shoe retailing, 20%+ levels of returns can be expected, with online only retailers such as Zappos promoting very easy free returns as part of their proposition, encouraging customers to trial different sizes and returns the sizes that do not fit. For the customer, the ease of returns is a critical part of their whole shopping journey. However, for those managing risk in an organisation, the policies, and controls matter.
In this session, we will hear from Victor Bayata and how Clarks Shoes have identified new ways to reduce the cost of returns and the risk of bad returns. Following Victors presentation, the group will discuss the findings and learning points.
Facial recognition has been one of the most talked about video analytics for at least a decade. However, open questions on the technology itself, the business case and above all, concerns around privacy have slowed down its introduction in retail.
However, there are now some very compelling retailer use and business cases emerging on facial recognition, with proven results as to how the use of facial recognition has helped protect store workers and created a safer retailer environment. In this meeting, we will hear two retailers share their journey, their learnings, experiences, how they engaged their legal team and finally, the financial benefits and return on investment from the deployment of facial recognition across their business.
"I am just sick of firing amazing store managers because of their bad shrink results [the causes of which are not under their control]!" - this sentiment was the underlying inspiration for one very senior retail leader to apply for, and secure the position of head of loss prevention for a leading international grocery retailer. Once in post, this leader adopted a systematic approach to addressing both the malicious AND the non-malicious causes of losses, establishing a small team (two pizzas!) who, on a weekly basis, would review the results from the external inventory audits, identifying the variances, per sku, by exception Vs average shrink for the category, for the latest batch of stores audited.
Established now for over twenty years, in this session lead by Martin Hasker from Tesco UK, we will learn how this capability has helped ensure that the stores are not "booked" for the losses for which they have zero control, with the leading causes of these exceptions being set up errors on off shelf displays, mistakes on case sizes and item code errors. Where the largest errors are validated and root causes identified, the value of the losses will either be removed from the stores shrink results, allocated to other lines in the P&L, and / or be compensated for by their vendors. Without this capability, the cost to stores of their shrink is typically up to 20% greater than the first cut of the audit results. Further, with this process in place, stores are more accountable for their shrink number.
With an increasingly number of grocery retailers, especially in Europe, moving their bought in, and pre-pack ranges, to central forecasting and automated replenishment systems, focus has now turned to the counters and in store production departments, and the opportunity to reduce waste and improve availability, by more tightly controlling ingredient replenishment. Some of the problems that retailers are seeking to address include:
That they may have have no systematic link in the supply chain between the saleable item and the ingredient it contains, how do you create a sales forecast for ingredients with no "sales history"?
That they may not have a maintained stock file on the saleable items, so with no visibility to ingredient "on hands" how do you create the right forecast?
That they are providing stores with mismatched levels of ingredients, packaging, production and labour plans, yet seeking to hold them accountability for availability, productivity and reduced food waste.
The meeting will start with Lisa Harrison sharing the ambition at Morrisons to move from store ordered replenishment to automated replenishment and their plan to achieve this & the potential issues they see on the journey. The group will discuss her presentation and share back how their organisation have embraced these challenges on ingredients, with the meeting closing with a recap of the key learning points.
This meeting is for retailers, producers and academics only.
The debate in the industry about whether to hold stores accountable for their losses or accountable for their compliance to the agreed actions that will minimise shrink is one that is set to rage forever. One reason for NOT holding stores accountable for losses is that the source of losses can be out of their control, for example, stores cannot control shortages from the DC, nor are they encouraged to allocate hours to check on delivery accuracy.
The recent disruptions in the supply chain, driver shortages, uncertain demand levels, new vendors, supply shortages, etc, in part linked to the pandemic, has meant that stores are less trusting of the accuracy of their receipts yet have few means to understand the extent of the shortages, and thereby the impact that shortages from DC's has on their shrink number. Because of this, holding stores accountable for their shrink number has become more problematic.
In this session, we will explore how different retailers have been approaching these issues, and addressing the causes of DC shortages.
For the last thirty years, retail loss prevention leaders have been protecting products from theft, by, for example, placing them in locked cabinets, applying EAS technologies, such as hard and soft tags, creating over-sized packaging, installing fixtures that slow down the thieves, including technology that can deny the stealer the benefits of using the item, etc.
Most, if not all of these technologies have been around for decades, and were not designed with today's modern retail context in mind, especially self-checkouts, scan & go, BOPIS, etc, or for a retail store context where there will often be far fewer store associates on the shop floor at any one time, less hours to apply product protection equipment, and finally, many retailers where customer approaches are discouraged.
Given this new retail landscape, the meeting will be focused on what is coming over the horizon in terms of product protection technologies, and the new technologies retailers believe can protect the hottest products from theft, especially theft driven by those wanting to re-sell the stolen goods. To kick start the meeting, ten retail loss prevention leaders will share with their peers, the product protection technologies they and their business are betting on to be BIG. These are likely to be new technologies they believe can be scaled behind a positive business case.
The meeting will close with a discussion on what the group took away as the key learning points.
Nothing frustrates shoppers more than empty shelves, and in this working group meeting we will hear from three retailers who are delivering innovations in technology, data analytics and shop floor routines to improve both on-shelf availability and online order accuracy, the perfect order, first time.
After the presentations, the working group participants from the other retailers and CPG’s will then share back their reactions, and their own experiences, with the meeting closing with a conversation on what the participants took away as their key learning points.
Traditional checkouts created a huge opportunity to sell shoppers, while they were waiting to be served, those items that the retailer knew you might have forgotten, or would simply buy if they saw it on display, chewing gum, chocolate, magazines, razors, batteries, financial services, etc. The sales of these items could represent up to 20% for some retailers, while for others such as grocery, the sales might be circa 3-5% of total sales, but often higher margin with interested vendors willing to invest behind to secure additional shelf space.
The emergence of self checkout, in all its forms, as the dominant method of payment for many retailers, especially grocery, has lead to a change in how shoppers behave and act at the self-checkout. Often there is no queue, and once they arrive at the POS terminal, they are immediately into "doing work" mode, either picking up, scanning items and then paying, or with Scan & Go, docking the terminal and offering payment. With mobile Scan & Go, there is arguably no checkout, you just walk out!
Given this change in context, many retailers are experimenting with different approaches to selling impulse items. In this working group meeting, we will hear from retailers and their latest thinking on how to sell impulse items in a mainly self-checkout retail context.
Searching for the worlds best food waste innovations
Upcoming ECR Working Group Meetings Through to December 2022