ECR Retail Loss

Enabling the Retail Sector to Sell More and Lose Less

Free tool to help retailers reduce losses in their most at risk stores.

The 2023 Fortress Store report documented the significant risk and loss problems retailers were facing in their most at risk stores and introduced seven strategies for risk mitigation. In this new report, we introduce a tool that can help retailers adopt a more holistic approach to reducing criminal activity in their most at-risk stores by engaging those in other functions. The report and the tool encourages cross-functional teams, for example, commercial, store design, marketing, human resources, format development, operations, etc, to score their own business against each of the seven criteria. A process can then set up the need for and formulation of a cross functional company-wide plan and action list for the most vulnerable stores. Prior to the launch of this tool, there has been extensive testing from retailers with positive feedback. For example. one UK retailer who tested the tool said, “We used the benchmarking exercise across different business functions. It was great to see where we are all aligned and highlight the areas that we need to focus on in the coming year.” Another retailer, operating in USA, who also tested the tool said, “There are many advantages to bringing different points of view together. A good time to use the benchmarking tool would be just before goal-setting for the year so you can leverage results to help prioritize areas to focus on.” The ambition of the tool is to shift the dial from ‘problem’ to ‘solution’, encouraging retailers to adopt a ‘whole of business’ solution using the benchmarking tool explicitly to seek out different perspectives from all parts of the business, , which in turn can then lead to more creative solutions. Through the set of 28 questions, and by asking questions around awareness and acceptance, the self-assessment tool can identify areas of alignment and then help retailers generate actions.” In this short video, Professor Emmeline Taylor shares the ambition she has for the tool, how it can be used and the likely outcomes. Feedback will always be welcomed.

Global OSA Survey - Your invitation to participate!

In October, we are pleased to announce the launch of our biggest ever survey on OSA, seeking to understand from retailers the signals they are using to determine OSA, their approaches to managing OSA and finally, the innovations they are prioritising. All retailers are invited to participate in this survey. As with all ECR Retail Loss research, participant anonymity and data confidentiality is paramount. No named data will ever be shared and only aggregated data will be published. Click the video to learn more. If you can please participate, it should take less than five minutes and while it can be easily done from your pc, you may find it easiest to complete on your mobile phone. Thank you for your participation. Click here to open the survey or scan the QR code.

Food Waste: 66 Best Practices to Sell More & Waste Less Checklist

Nearly ten years ago, we published a [aper that listed 65 "best practices" to help retailers sell more and waste less. The paper was authored by Assistant Professors Karel Van Donselaar and Rob Broekmeulen, from Eindhoven University. We recently had a chance to review all 65, and we think they have survived the test of time! But you can be the judge, so please take a look below and compare them to your current practices. Perhaps this review, maybe you do it as a cross functional team, can spark some new thoughts and ideas? Enjoy! Here they are then, 66 best practices to selling more and wasting less. Store Operations Management Create awareness among store associates of the importance of waste reduction, for example, by giving them frequent feedback on the impact of waste on the environment Ensure sufficient workforce are available for timely shelf restocking Record the expiration dates per SKU and stimulate demand for items where expiration date is approaching and excess stock is large Introduce easy to understand KPIs related to waste, set realistic targets, and give incentives when targets are met Educate and train store management and employees on routines Ensure the delivery of promotions in every store is aligned with promotion conditions (especially display) as used in forecasting Ensure every store executes the markdown strategy perfectly Introduce in-store final processing (for example, bake-off or butcher) Shelf replenishment Put oldest items at the front Make shelves large enough to prevent OOS Align the actual number of facings on the shelves (not necessarily equal to planogram) with demand Create a well-organised and accessible backroom, especially cold rooms Use easy-access and handling-friendly crates or boxes (e.g. plastic crates with standardised sizes) Replenishment logic Supply goods for promotions in two waves and use early sales information during promotion of second wave. Use age-based replenishment logic Allow flexible lot-sizing for items with high waste Apply a new replenishment logic: using inventory and order up to levels at aggregate level for categories with high substitution willingness (i.e. first determining the aggregate desired number of products for the entire product category and then breaking it down to the SKUs) Increase inventory, sales and supply data accuracy Case pack size Optimise case pack size, making trade-offs between handling costs and waste Minimum stock Optimise safety stock and commercial display stock to balance customer service and waste Differentiate target service levels for items with long and short shelf life Differentiate target service levels for items with high and low average demand for categories with high substitution willingness Align customer service definitions in management report systems and in replenishment systems Timely reduction of safety stocks for items near phasing-out or near end-of-season Supply Chain Discuss options for products with longer shelf lives with current supplier Select new suppliers with flexible production, short lead times, and longer product shelf lives Educate and reward buyers for waste reduction Apply cross-docking Increase delivery frequency (for example, by combining fresh and ambient products in one truck or use retail DCs instead of direct delivery by suppliers) Pick orders in the DC during the night Optimise the balance between the target service levels for the DCs and the stores. Optimise the minimum shelf life left for the store when the product leaves the DC Use different ingredients or different production technologies to improve products’ image of freshness and the shelf life Use innovative packaging to increase the shelf life Cooperate with supplier to exchange operational data (inventory, forecast, actual sales) and KPIs to align production at suppliers with demand Implement vendor-managed inventories Implement supply chain synchronisation and push the majority of the inventory downstream as soon as storage space is available Increase demand Review assortment and eliminate bleeders where waste is more than 50-80%, thereby increasing demand for substitutes Stimulate sales for slow movers through better information to consumers (e.g. explaining benefits of organic food) Offer damaged or ugly food at discounted prices Markdown strategy Evaluate use of markdowns on items which approach their sell-by-date Only markdown if items would not be sold otherwise (based on actual inventory and demand forecast information) Optimise the timing and the extent of the markdown Change withdrawal behaviour Reduce space between shelves. Reduce number of batches with different shelf lives on the shelf Educate consumers on differences between sell-by-dates, use-by-dates, and best-before-dates Inform consumers on possibilities of using misshapen food items Reduce demand uncertainty Increase average demand per SKU (see above) Apply Everyday Low Price (EDLP) strategy. Reduce demand dynamics Deliver smooth weekly sales pattern, e.g. by having special promotions on days with low traffic Give additional stimulus to sales during phasing-in or –out of products (extra promotion, taste for free, reduced prices) Improve demand forecasting Use different forecasting techniques for items in different situation (whether item is regular, on promotion, phasing-in or out, with trend, and/or with seasonal pattern) Detect trends and/or seasonal patterns when forecasting demand, and, if necessary, apply different forecasting parameters Remove promotional sales data when forecasting regular sales (also when selected stores prolong the promotion to avoid waste) Promotion management Apply Everyday Low Price (EDLP) strategy. Avoid multi-consumer-unit offers like ‘2 for 1’ Investigate substitution effects and reduce forecasts for items facing cannibalisation Change planograms/displays Use alternative ways to display items (for example, partly fake items with smaller amount of real items, or use pictures or multi-media) so that even in the face of out-of-stocks there is a customer perception of wide choice and abundant inventory Only use multiple facings for fast moving items Improve storage conditions within store (install chilled cabinets with transparent doors) Change merchandising policies from “Pile ‘em high” to new, store-specific merchandising policies Assortment Carry a dynamic assortment for the slow movers/specialties based on the production schedule of the supplier Remove bleeders or replace them by new items Add items to assortment that can be used with items near to sell-by-date as ingredients (e.g. fresh soups) or consume on the premises like in food markets Educate and reward category managers on waste reduction Align assortment and/or planograms with average demand for individual stores or groups of stores Offer smaller consumer units

Security Operations Centres (SOC) - Invitation to Participate in Survey

In the past decade, many retailers have invested in Security Operations Centres (SOC's) where the remote access to video data from stores and other retailer owned locations, across geographies, has opened up huge opportunities for new security, shrink and marketing use cases. To explore how these SOCS are being used, we are launching a new online survey to explore the current and planned uses of SOCs, providing study participants with unique insights as to how, and for what reason, retailers are using SOC's in their business. The findings from this survey will be presented in our online video in retail working group meeting on October 22nd. We are now inviting all retailers to participate in this survey and as with all of our research, participant anonymity and data confidentiality is paramount. No named data will be shared and only aggregated data will be published. . Thank you for your participation. Click here to open the survey or scan the QR code.

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FOCUS AREAS

The research priorities are determined by its members – they drive the agenda to ensure ECR delivers research that meets the need of the industry bringing new insights, tools and techniques that enables retailers to sell more and lose less.