This article, (editor Jörg Rode), was originally published in Lebensmittel Zeitung on 10 December 2021.
Grocery group Coop Denmark is among the first major retail organisations in Europe to seamlessly link automated replenishment and shelf planning in one IT system. The medium-term goals are store-specific assortments and product placings.
Coop, Denmark’s second-largest grocery retailer, is using software from Finnish vendor RELEX to perform sales forecasts, automated replenishment as well as space and shelf planning via one integrated system. According to Coop‘s Logistics Director Henrik Gerdt, the goal is to create store-specific assortments in which the number of facings for individual items is also adapted to the sales and customers of the respective store.
According to Gerdt, the company is in the middle of a staged roll-out of RELEX’s new cloud-based version of its “Living Retail Platform” and is now managing about half of its items (SKU) with the Finns’ latest solution. Coop Logistics’ service level to stores is now above 98 percent, thanks to improved replenishment automation, he said.
“Previously, we optimized the assortments for larger clusters of stores. We now expect to do much better at the individual store level with the new system,” explains the Head of Logistics. Currently, he says, Coop is still in the learning and optimization phase. “We haven’t reached our goal yet,” says the manager.
The Head of Logistics gives two examples of such store-specific shelf planning: Consumers in the capital Copenhagen have different needs than those in rural parts of Jutland. Coop offers largely the same goods throughout Denmark, he says, but in Copenhagen sales of organic products are significantly higher, so they also need to get more facings on the shelf.
However, Gerdt says it makes equal sense to manage shelf spaces also related to seasons and special events. For some products, for example, there are very different sales figures before Christmas and after — and these also vary from region to region. A demand-oriented allocation of facings is according to the logistics director at least as important in the context of store-specific assortments as listings planned by location. In Gerdt’s assessment, this is “the way we retailers will have to go in the future.” The complexity to be managed and thus the demands on the IT systems continued to increase.
Coop found the decision in favor of RELEX’s integrated solution particularly easy because the Danes have been using the core of shelf planning for a long time: The system from British company Galleria, which was aquired by RELEX in 2016. Gerdt cites the advantage of RELEX‘s retail software as being that ordinary employees from the specialist departments could configure the system themselves for their tasks without having to frequently call on the IT department.
Coop is combining automated replenishment and shelf planning as part of a major renewal of its IT landscape. As the largest project, this includes the introduction of the SAP Retail merchandise management system in the current S/4Hana version. According to Gerdt, the IT modernization is linked to the company’s efforts to clean up and optimize outdated business processes. The new merchandise management system already controls half of the company’s sales, he adds. SAP and RELEX use the same data. Connecting the systems of the two IT providers is no problem, he says.
Coop comprises the grocery retail banners Brugsen, Kvickly, Fakta, Coop365, and Irma with about 1,000 stores in Denmark and annual sales of more than 6 billion Euros in 2020.