Coop Estonia, the country’s largest and oldest retail group, operates a family of 18 consumer cooperatives with more than 300 stores in three different store formats across the country and is owned by some 80,000 customer members. In 2019, Coop Estonia partnered with RELEX to centralize their forecasting and replenishment. In 2022 they expanded the partnership to optimize promotion planning.
Oliver Rist, Coop Estonia Purchasing Director, sat down to share some insights about their partnership with RELEX and how they are increasing the profitability of their promotions, optimizing their processes, and securing high availability for campaign products.
My name is Oliver Rist. I’m the Purchasing Director for Coop Estonia. Coop Estonia is a cooperative organization, and I work for the Central Society, so to speak. So, we have, all in all, about 330 different locations all across Estonia. With regards to the grocery business, we have hypermarkets, I believe, 13-14 hypermarkets, supermarkets, and then we have, I would say, about 180 small stores or convenience stores.
But we run every month, I would say, maybe 2000 promos. So with, I’d say, 15-16,000 different SKUs throughout the year. You don’t want to run promos that don’t address your customer, and there’s a lot of cost involved. Promos contribute about 20-odd percent to our overall revenue. Which is with that ratio of 20/80, we don’t necessarily want to sell more on promo because promo margins are obviously lower than regular sales margins.
So, it’s still a significant part. I think with the coming uncertainty, it’ll play an even larger part, and there’s so many opportunities for our company to cut costs. You know, have engaging promos but also save time on the whole process. And also, at the store levels, our purchasing managers, category managers do their own guesstimations – I suppose it’s the best word – on what volumes we can hope to achieve.
And so, we match that up to what RELEX was able to deliver, and we did that on a total level, so to speak. The RELEX solution actually goes down to the store level. And so, on a total level, the solution was twice as good. So, which is to be expected. And on a store level, the results were quite good as well were significantly better because we didn’t do store-level guesstimates before.
But having that store-level estimation is really key in delivering the right amount in delivering the volumes. And then what’s also really key is having the right price point. RELEX was always very accommodating – within the bounds of, you know, not turning something completely on its head – but was also always very accommodating to also our way of thinking.
Well, we want to proceed with the implementation and enjoy the benefits. And those, those are significant. We see that we have the opportunity to really – you know, with an efficient process flow as well – to cut down time that we spend currently on managing promotions. And crucially, to do more with less and hopefully enjoy some better margins.