Case East of England Co-op: Increasing availability and sales with localized planograms

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Introduction

The East of England Co-operative Society is the UK’s fourth largest consumer cooperative. Primarily a grocer, it serves 126 stores across the counties of Norfolk, Suffolk and Essex. It stocks a wide range of everyday essentials, including thousands of local products through its award-winning “Sourced Locally” initiative.

Challenges

In 2012, the society embarked on a radical overhaul of its retail operations and processes, using automation to support in-store efficiency, streamline business processes and improve sales. The society realized that technology was at the heart of enabling this process change and sought out new systems.

“We couldn’t move from manual, store-based ordering to an automated replenishment system without first implementing a full space and assortment planning solution,” said John Dixey, Head of IT Development for East of England.

Previously, store managers were making decisions about ranging, product positioning and new-introduction merchandising, which had led to inconsistencies across the stores. “We wanted far more control over stores, providing better consistency, standards and visibility,” Dixey added.

Moving from a manual approach to automated ranging in store and at head office was a challenge. Along the way, East of England discovered data quality issues that required resolution before it could progress.

“We had to do a huge amount of work on our product and store dimension data,” said Stephen Lamb, Senior Project Manager. Some product dimension data was incorrect and store managers quickly established that many of the fixtures were older and inconsistent.

East of England Co-op at a glance

  • UK’s fourth largest consumer cooperative
  • Serving local communities across Norfolk, Suffolk and Essex
  • Owned by 275,000 members
  • Staff 4,300 employees
  • Stores 126 food stores
  • Turnover £348m – approx. €409m

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“To be honest that was a breath of fresh air because relationships with vendors aren’t always that good and things don’t always go that smoothly.”

– Stephen Lamb, Senior Project Manager, East of England Co-op

Working together

East of England chose RELEX over leading competitors for its ease of use, commitment to customers and powerful tools that could be adopted using the capabilities of its existing employees.

“Throughout, there was constant communication and close collaboration between East of England and RELEX. They were on hand to answer queries about the system and how to adapt its technology to our business processes whenever needed,” Lamb said.

“To be honest that was a breath of fresh air because relationships with vendors aren’t always that good and things don’t always go that smoothly,” continued Lamb.

The usability of the system helped the team quickly embrace the new way of working, even without substantial space planning experience or advanced training. Using insights from the new solution, the team was able to monitor each store’s results to ensure the shelves were being filled correctly. “The beauty of it was that using the system gave the ranging team the capability to control the assortment in stores without the need for extensive training,” said Lamb.

“Without doubt, one of our major successes has been the partnership we’ve developed with RELEX. We identified it as part of our criteria, and it certainly came through in the implementation,” Dixey said.

“Without doubt, one of our major successes has been the partnership we’ve developed with RELEX.”

John Dixey

Head of IT Development, East of England Co-op

Customer-centricity and localization

Customer-centricity and localization are growing retail trends. With RELEX, East of England can incorporate local products along with Co-op’s core national product assortment into planograms to give each store a more local, individualized feel.

The new system helps the team manage schemes like ‘New Because of You’, where customers can ask for specific products for their store; a key factor in the Society’s decision to pick the RELEX solution.

“RELEX looks at the sales of each product in each individual store,” said Lamb, “and decides the optimal number of facings. That’s less time spent merchandising, less waste, fewer out of stocks and improved sales.”

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inventory reduction in some categories

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Availability increased from 93% to 98%

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Improvement in sales

Improved performance

“RELEX has given us visibility into our actual availability figure and our products within stores and, for the first time, it’s also given us visibility of our actual store space,” said Chris Murray, Head of Retail Stock & Planning.

“Before we implemented RELEX, we struggled to monitor availability and inventory issues,” said Dixey. “Being able to identify them meant being able to fix them.”

The results of the transformation of both replenishment and space and assortment planning have been impressive. Availability has increased by 5pp from 93% to 98% across ambient products, sales from newly planned and replenished categories has seen a 2.2% improvement and inventory levels in key areas targeted by the team have been reduced by 20%. “That’s a massive decrease for a company of our size,” said Murray. “At the same time, as availability has gone up we’ve also seen an increase in sales.”

Next, East of England plan to apply space and assortment to fresh categories, and anticipate the benefits seen in these areas to be even greater than those realized across ambient categories. “The better selling, most profitable categories, will be given more prominence and a greater share of the space,” said Lamb. “Space optimization will go hand in hand with our store refit program.”

East of England store

Results and benefits

  • Availability increased from 93% to 98%
  • 20% inventory reduction in some categories
  • 2.2% improvement in sales
  • Planograms relevant to stores & demand
  • Visibility of space within stores

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