assortment management for retail "flying underwear"
DESCRIPTION
Assortment Management in Retail: can the manufacturers policy be harmful to the company itself?TRANSCRIPT
Assortment Management in
Retail:can the manufacturers
policy be harmful to the company itself?
The business model is based on the Ukrainian market in the largest producers of FMCG sector analysis
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Since in Ukraine all the information about the goods is confidential, the only product which is openly displayed is
underwear.
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What are the usual discussions happening these days, specially in
a big company like
“Flying Panties”?4
Our characters …
Marketing director
CEO
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Our company does not fulfil the sales plan!
Soon we will run without panties, because the
only remaining thing left is rubber!
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The company is distracted by storm, sales are falling: for
everyone came testing time – survive or be
eliminated!
Do you still have place, marketing
director!?
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Unambiguously, because I'm super
cool!
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Previously we sold panties through advertisement but now the budget is cut, and you need to find
other sales opportunities for improvement!
Do you have any ideas?
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Without the budget !? There
are some ideas …
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First, I will wake up “sleeping” clients – Also I
will increase sales to clients, who bought little!
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Why they will buy more?
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I mastered discount art! Either it will work or . . .One out of two!
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First standard advice – we will wake up “sleeping” clients or we will sell them
more, who bought little!
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In other words …Value more important than price , we will sell to her clean
panties!15
Second idea – we will knock and for us the door will open. We will look for new segments and markets. Marketing Classic! We will “Collect” new clients!
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Will they give you?
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For me? Yes. IF we will have more sellers! Either it will work or… One out of two!
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Second standard advice – seek new clients.
“Blue Ocean” Strategy – lets go there, were are no competitors. Seeking niche.
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“Blue Ocean” Strategy – lets go there, were are no competitors. Seeking niche.
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Third idea – to be Creative!
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How so?
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Boss, behold, here are for you 2 out of 60 free or nearly free trade push techniques: here is the new way to
sell old products!
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Third standard advice - to find new creative ideas. For example: Life is
going on, but panties sings!
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Or crazy PR event “Fishnet underwear”
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What happens, if companies listens those advices?
5 suicide ways for marketing director:1. The first advice destroys profitability, because when discount is given to some companies then later all other will start to require it to;2. Second advice increases cost, because it requires the recruitment of additional sales agents and all so “to arm them”;3. The third advice is proposing new ideas, which require investment and ROI from them are in the fog.
Do you need to continue with the advice if the core problem will stay the same?
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Sales continue to fall ... Wait until autumn, or will you give the results here
and now?!
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. . .and some underwear we have for half a
year. . . How to reach the sky, and make the
clouds rain in money?
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Пробовали акции, давали хорошую
скидку… Не помогло!
Yo, I know!Shelves Optimisation !
Cheap analogues ! We will give the plan, we will change sales team and we will rope them with real sales
results!!!
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But boss, we have already changed 3 teams in 3 regions, but sales fell even
more …
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And so sellers bonuses are tied up to the panties and
shelves... I have no clue what to do and
to whom to tie!
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Ana-logically!
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Work with HR. Undressing the sellers, ukrainians are world
champions. No fixed payment at all!
Ukrainians versus World: 4:2.
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Работа с персоналом. В раздевании украинцы лучше всех!
Ukrainians versus World: 4:2.
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Boss, I have an idea! We will go to the store and we will show how to fight with them!
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How?
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If we are going to go, we will have to get bigger negotiating muscle! This is a technological approach! It is so called harsh negotiation phenomena! We will use the opponents 'script breaking' tactics!
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MAXIMA
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What is granted?
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Your shelf is kind empty! You don’t have very
important assortment!
Either something
happens,or... One out of two!
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So you are saying, that I can get panties that I don’t have?
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Underwear's that are gone:Top Movers
guarantee 80% of sales, they are needed to everyone:Dealers
Deputys
Electricians
Soldiers
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That’s how looks clients who are missing. . .
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You can get it. But it is necessary to optimize the assortment, You need to
order the 'priority' panties!
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Priority products, up to marketing - they will guarantee the future!!!!!!
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My whole family already have this priority product! Even I wear 2 underwear's at the same time! I worked hard to clean them
from the shelf!
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This is my lovely daughters photo!
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Crisis is outside, we still need to make sales!
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I wont sell any new stuff until I will sell the old products that you
obtrude!
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Here are they: Slow MoversSlowly sold products
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Here are they: Out MoversProducts which nicely reflects the
trading history and no one buys them
anymore. . .
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The fact is we didn’t foist, but your “Masha” (shop manager)
ordered!
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This is a headache. Perhaps the sales
agent gave bonuses in panties to the Masha, so she ordered more. .
Agent done his job, Masha got her
“bonus”, and what should I do?
Buyers stopped going to the shop,
underwear's they need I don’t have!
Either they don’t like the color or the color
is bad.
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So say to them – buy what is here. . . tell them they can’t see underwear's under the cloths, what's the difference what
color they are? Panties, is a product that can be substituted. . . Or one out of two!
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Men product substituted for women
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Women product substituted for men
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We will assign to you the best
merchandisers, which will be able
to explain to people.
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We will give you new stuff too – cheap
crisis panties!
For real it’s a good stuff, just take as much as you can! Not less then EURO pallet! I give
you my word. Or. . . one out of two!
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New MoversGoods, that are introduced in to assortments
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New Movers for men's Goods, that are introduced in to assortments
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Yeah, you know, we would like to bring to
you and top movers… but, you know, how
our logistic and production works . When I will get it in my warehouse I will
bring you first!
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When you will solve your damn problems come back. Tomorrow “Carlsperg’s” panties will arrive, may be they have what I need?!
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I don’t get it... For some crazy reason
assortment and shelf optimizations for all Ukraine and for this shop doesn’t
work?
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Now I will show where are we looking
• First we are analyzing main business process, we check how well the TOP clients are served with TOP assortment
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What do you need for that?
1.To identify TOP clients by sales2.To identify which products are in TOP
assortment by regional sales3.To know analysis methods that allows you
to calculate lost sales4. And of-course not to forget your head at
home!
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We check if all top movers are in top shops. . .
. . . and this is what we found:
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Data analysis and during shelf observation time we found:
• Regional TOP assortment in TOP shops was displayed between 36% and 60%. That why potential to increase sales was from 40% to 56%.• However, at the same time there also was lost sales, which fluctuated between 16%-25% and thus in certain circumstances, when producer had his 'focus team' for work with assortment and whole bunch of merchandisers!!!• And at the same time from 12% till 36% was overstock, though they haven't been delivered the whole month, but usage was daily!
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Current Marks
TOP Products Marked in Black are
not listed in the shops assortment at
all.
TOP Products marked in red are in
assortment, but at analysis time they
weren't on the shelf -OutOfStock
TOP Products marked in blue which weren't delivered during the month but they are
still in the shop.(OverStock)
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Assortment surplus, shortage and potential
Shop Address Assortment
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How is it possible that the most wanted products are not in assortment at best
shops?Life without panties?
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Rules, which affect shortage of needed products:
1.Planogram creation policy (one planogram for 1 region or maybe for the whole Ukraine for one year);2. Priority products policy (in the best shelf places put products you want to get rid of, not what the consumer wants to buy);3. High margin products get priority, even so the final benefit might be little;4. Business way: employees works to fulfill sales plan but not for clients (shelf's) 'service'.
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And other rules, aggravating sales:
1. Retailers belief that product substitution fully replace products that are short (shop don't need to order sold products till they have substitution).2. To put products which are sold-badly, which front look is damaged or the valid time is over in the best place.3. Belief, that does not need to order sold products until stock of product (or group!) decrease till minimum (most of the time it is '0')4.- etc.
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I see we have a very interesting situation! Apparently we are making one planogram for the whole Ukraine. But usage in regions and even in separate shops is quit different!
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yeah, and during the year everything is changing, during the winter we need warm panties and during the summer light. . .
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What if competitors creates new product...
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So boss. . . You think we are dealing wrongly of what and how much of it should be in the shelf's?
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You know colleague. . . if only we could review the planogram in every shop, and knowing what and how much of it are exactly are sold. . .
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If your are interested in how to improve your sales, how to find the solution to control your shelf
spaces, how in three months to get real ROI from your investment in to changes, you need to contact
us. We can reach fast results, we have real Know
How, real supply chain management experience (for Production, Distribution and Retail) and
knowing how to be mediators between production and retail.
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Author of “God, Quantum physics, Organizational structure and Management style”
http://www.versloknyguklubas.lt/en/component/virtuemart/?page=shop.product_details&flypage=flypage_images.tpl&product_id=121&category_id=30
You can order a book, workshop, or lecture, or
just a dream at:
+37069841027 Darius Radkevičius
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www.god-‐physics-‐management.com
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