The latest update on 10 years’ experience with demand-side implementation, with special emphasis on shopper value, category growth, POS data management and excellence in execution through the power of collaboration at the store level. Four case studies take a fresh look at product development and introduction, efficient promotion, assortment and merchandising.

1. CONSUMER MARKETS
Efficient local assortment
differentiation
Selex – Barilla case study
ADVISORY

2. Who we are…
2

3. Selex
2004 Turnover € 6,300 million 22 associated groups with
around 25 storebrands
Marketshare 7.6%
Associated firm leading the
project of this case study is
2,646 stores in the Megamark (142 stores) with
Hypermarket, Superstore, storebrand:
Supermarket and convenience
channels
5th largest retailer in Italy
3

4. Barilla
2004 Turnover € 2.5
billion
Leader in pasta and
crispbread
4

5. Pasta: the essence of Italy
Ranked among the top 10 in the Italian grocery business
Champion of Italian gastronomy:
26 Kg per capita, 4.000 SKU’s, 140 manufacturers
Highly localised People needs…
Pack size
Unusual shapes
Local players
Need to manage the Category meeting local expectations while
remaining efficient
5

6. Our joint project on the Pasta Category
Category Management project in South Italy
Scope:
130 stores
Small super format (400-1000 m2)
Puglia region – concentrated on 5 regional cities
Objectives:
Improve performance
Improve efficiency
Leave room for local flexibility
6

7. The situation at the start of our
joint project…
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8. We soon realised that the overall performance
of the category was outstanding …
Pasta share of store sales
2,8% 3,0%
2,2%
Italy Region Selex
…our sales were largely in line with the
regional market
8

9. The problem was the level of service to the
shopper and low in-store efficiency
More space to the category than others… but many
OOS’s and high ordering & replenishment costs
lots of
products with
only a single
facing
9

10. Our assortment was similar to that of a
hypermarket …
Average number of Average number of
items on shelf specialty items on shelf
273 278
90
38
Regional Selex Regional Selex
Hyper+Super Hyper+Super
Benchmark Benchmark
…but we are a chain of convenience
stores and small supers!
10

11. We had more space and many more items
than our competitors…
Number of items per cluster and zone
competitors
Cluster Cluster Cluster
Large Medium Small
…and little correlation between cluster size
and assortment
11

12. WHY?
12

13. Pasta is a priority category for all retailers in
the Puglia region
People are more demanding then in other areas in Italy
– brand loyalty and variety of choice
People change stores if they do not find their brand
People are highly “vocal” – especially in small store
formats they tend to ask for their brand…
13

14. The decentralised management of the pasta
category has some negative side effects
Assortment open/available to
all stores Offering not based on
market knowledge
Assortment decisions,
ordering and merchandising Little continuity of the
left to store managers offering
High level of resistance to No retail network
imposing restrictions as in efficiencies
other categories!
14

15. Our approach…
15

16. Our approach was based on three criteria …
1. Improve service to the Shopper
– Product availability in pasta
– Continuity of the pasta offering
– Completeness of the overall store offering
3. Improve the efficiency and effectiveness of
assortment and display
5. Leave some freedom to store managers to
customise their assortments
16

17. The first two objectives needed category
management expertise
FROM TO BASED ON
14.5 mt. shelf 13.5 mt. shelf  Fixed number
of shelves
290 items in 250 items in  Fixed number
assortment assortment of items by brand
92% market 92% market  Store
coverage coverage
clustering and
system of 3
zones
17

18. The objective to provide store managers with
some freedom to decide, was more difficult…
no
mono
facings
Clear
brand
profile
Change management proved a key part of the
project!
18

19. We devised a tool to set guidelines for
managing the assortment at store level
Zone A Zone B Zone C
Fixed Flexible Fixed Flexible Fixed Flexible
• Granoro • De Cecco • Barilla • Voiello • Divella • Barilla
Cluster • Divella
• Barilla
• Voiello • Divella
• Granoro
• De Cecco • Granoro
• Riscossa
• De Cecco
Small • Garofalo • Riscossa • Garofalo
Fixed Flexible Fixed Flexible Fixed Flexible
• Granoro • De Cecco • Divella • Riscossa • Barilla • Voiello
Cluster • Divella • Voiello • Granoro • Voiello • Divella • De Cecco
• Barilla • Barilla • Granoro
Medium • Riscossa • De Cecco • Riscossa
• Garofalo • Garofalo • Garofalo
Fixed Flexible Fixed Flexible Fixed Flexible
• Granoro • Ambra • Granoro • Ambra • Granoro • Riscossa
Cluster • Divella • De Cecco • Divella • De Cecco • Ambra • De Cecco
• Barilla • Voiello • Barilla • Voiello • Divella • Voiello
Large • Riscossa … • Riscossa … • Barilla …
• Garofalo • Garofalo • Garofalo
19

20. The tool mixes flexibility and strict rules to
reduce the risk of mistakes
A fixed and flexible assortment component
Guidelines for the flexible component differentiated per
cluster
SKU’s rankings to support brand choice for the flexible
component
Guidelines for managing promotions
Guidelines for implementation
20

21. Results…
21

22. The results show an over-performing shelf
with improved standardisation
max
ASSORTMENT - 14 %
min
SALES +6%
max
SPACE -7%
min
22

23. In the freed space we could merchandise
complementary products …
Pasta and pasta sauce on the same shelf to favour joint
purchasing
Oven
sauces
Pasta
Pasta
sauces
23

24. Let the store managers talk …
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25. Grazie!
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