Spring 2017
Recommended EatRite, a family-owned grocer, expand its private label, launch a technology initiative, and actively invest in human capital
Modeled the recommendation's impact to increase margins 2.43% and net profit $710mm
1. 21st Century EatRite: Fresh Strategy | 2017 Deloitte Case Competition
Fresh Seniority | Miles Wood, Alexandra Van Den Heuvel, Scott Moore, Robert Ryan III
3. EatRite needs a 21st century strategy
to maintain its market position
Context
• Family owned, locally-sourced grocery store
• Strong focus on local community
• Decades of moderate regional growth
Problem
• Recent decline in market share
• Steady drop in profitability
• Ineffective business model
Solution
• Identify root causes of market share loss and low profits
• Evaluate options in the 21st Century grocery market
• Recommend solutions to revitalize the organization
Introduction Problem Identification Recommendation Next Steps Conclusion
4. To boost profits, EatRite will need an
innovative, data-driven brand
Introduction Problem Identification Recommendation Next Steps Conclusion
Inability to Establish
Data-Driven Direction
Disparate Information
Systems
Minimal Integration of
Data Sources
Lacking Holistic
Perspective
Underdeveloped Private
Label
Distribution Model
Scaling Operations is not
Decreasing Costs
Dependent on Fading
Brand Loyalty
Aging Customer Base
Absence of In-Store
Technology Integration
Outdated
Checkout/Delivery
Model
Lack of Innovation Falling Margins
Intuitive Decision
Making
Outdated and
Unattractive Brand
Traditional and Slow
Company Culture
Aging Employees
Weak Performance
Management
High Employee Turnover
Talent Acquisition
and Retention
Ineffective Operating Model Human Capital
5. NOW: Next-Gen Private Label,
Organize Data, Win Fresh Talent
Introduction Problem Identification Recommendation Next Steps Conclusion
• Career Performance Roadmap
• Promote talent
retention
• Attract Young Talent
• Incentivize Performance
• Data Integration Plan
• Develop Website and App
• Account-based Loyalty
Program
• Integrate Technology In-store
• Build relationships with
suppliers and manufacturers
• Launch Private Label to 100-
400 new, high-margin products
Impact
Heightened market share and
reduced margins generate
$85 – $360 MM in profits
over five years
Construct high quality brand
through private label
$
Data efficiency will lead to
$105 – $225 MM in profits
over five years
External (app, self-checkout)
and internal (predictive
analytics)
Ineffective Operating Model Human Capital
Technology Initiative Revitalize OrganizationPrivate Label Expansion
Human capital investment
will produce $75 – $120 MM
in profits over five years
Long term advantage of
injecting fresh talent into the
enterprise!
$ $
6. Private Label plays an essential role in
any 21st century grocery enterprise
Introduction Problem Identification Recommendation Next Steps Conclusion
• Private label grows to 27% of store sales
• Total sales grow 15% by 2020
• Private label margins exceed brand margins
by 5.5 percentage points in 2020
• Initial and Long-term costs: $30 and $20 MM
• Return on Investment: 2016 (T + 1 year)
• Private label grows to 27% of store sales
• Total sales grow 5% by 2020
• Private label margins exceed brand margins
by 4 percentage points in 2020
• Initial and Long-term costs: $30 and $20 MM
• Return on Investment: 2017 (T + 2 years)
Aggressive – Profits up $360 MMConservative – Profits up $85 MM
• Debate rages within EatRite regarding private label expansion
• In our view, EatRite’s private label is underdeveloped
• Important strategy in a market of brand loyalty
• Sales growth and margin expansion for all products
• Expand private label to new categories and products
• Build new relationships and heavily market the label
Now
Why PL?
Logistics
7. Internal and external technological
solutions will drive future growth
• Work with CIO
and frontline
managers
• Define who can
access what data
• Goal: Analyzing
and predicting the
major drivers of
revenue and profits
Brainstorm
Determine Meaningful Data
EatRite Labs
Strengthen IT Department
• Hire an IT team
• Develop website
(2016) and mobile
app (2018)
• Design internal
training materials for
regional managers
Integrate
Data, Analytics, and Tools
• Define data-driven
objectives for all staff
• Preserve existing
software
infrastructure
• Implement
integrated data
visualization tools
Modern Stores
Technological Infrastructure
• Expand loyalty
program using
personal accounts
• Pilot self-checkout
across 120 stores (4-
5 per store)
• Pilot shelf-sensors
and beacon
technology
Monitor
Ongoing Data Collection
• Use dashboards to
track customer
activity, engagement,
and retention
• Utilize insight from
pilot programs to
inform strategic
decisions
• Knowledge
management
Introduction Problem Identification Recommendation Next Steps Conclusion
8. Modern companies need technology to
make smarter business decisions
Introduction Problem Identification Recommendation Next Steps Conclusion
Collect Integrate Analyze Monitor
• Initial same store sales growth of 6.8%
• Continuous improvement of data tools yields
1.6 - 3 percentage points of sales growth YOY
• Self-checkout adopted by 15% of customers
• Mobile app adopted by 15% of customers
• Mobile marketing goes viral, increasing
sales 5 percentage points by 2020
• Initial same store sales growth of 4.9%
• Continuous improvement of data tools yields
0.5 percentage points of sales growth YOY
• Self-checkout adopted by 2.5% of customers
• Mobile app adopted by 5% of customers
• Growth in mobile increases sales by 0.1
percentage points by 2020
Aggressive – Profits up $225 MMConservative – Profits up $105 MM
9. The future of EatRite ultimately lies in
its people, so developing talent is key
Introduction Problem Identification Recommendation Next Steps Conclusion
1
2
3
Personalized Development Resources
• Career and Performance Roadmap
• SWOT Analysis
Talent Recruitment
• Establishing a Company Purpose
• Networking for Business Growth
• Social Media Presence
Performance Incentivizing
• Money
• Promotion Potential
• Flexibility
Impact – Profits up $75 MM +
Turnover costs
decline 4%
Performance Pay induces same
store sales growth of 4-6%
Enhances
attractiveness to
new hires by 35%
$
10. Outlining a tailored roadmap aligns
expectations and promotes retention
Business Analyst
(BA)
BA Project
Lead
BA Program
Lead
BA Practice
Lead
Relations
Manager
BA Manager
Requirements
Analyst
Process
Analyst
Decision
Analyst
Systems
Analyst
Systems
Functions
Service
Request
Agile
SWOT Analysis Career and Performance Roadmap
Introduction Problem Identification Recommendation Next Steps Conclusion
11. The future of EatRite ultimately lies in
its people, so developing talent is key
Introduction Problem Identification Recommendation Next Steps Conclusion
1
2
3
Personalized Development Resources
• Career and Performance Roadmap
• SWOT Analysis
Talent Recruitment
• Establishing a Company Purpose
• Networking for Business Growth
• Social Media Presence
Performance Incentivizing
• Money
• Promotion Potential
• Flexibility
Impact – Profits up $75 MM +
Turnover costs
decline 4%
Performance Pay induces same
store sales growth of 4-6%
Enhances
attractiveness to
new hires by 35%
$
12. By 2020, EatRite can double its profits
and achieve its 3% margin goals
Introduction Problem Identification Recommendation Next Steps Conclusion
Year Base Case Conservative Aggressive
Mkt.
Share
Margin
Profit
($MM)
Mkt.
Share
Margin
Profit
($MM)
Mkt.
Share
Margin
Profit
($MM)
2015 0.98% 1.50% 86 0.98% 1.50% 86 0.98% 1.50% 86
2016 0.95% 1.60% 90 1.07% 1.28% 79 1.08% 1.56% 103
2017 0.95% 1.60% 91 1.11% 1.92% 122 1.13% 2.44% 172
2018 0.95% 1.60% 92 1.14% 2.17% 141 1.18% 2.97% 223
2019 0.95% 1.60% 92 1.18% 2.58% 175 1.25% 3.74% 304
2020 0.95% 1.60% 93 1.24% 2.89% 203 1.35% 4.03% 366
Net Profit (2015 excluded) 458 720 1,168
Increase over Base Case 0 262 710
13. Addressing potential risks will smooth
the execution of EatRite’s initiatives
Strategy Specific
Risks
External Internal
Cyber
Security
Brand
Perception
Damaging
Relationships
Scope Creep
Employee
Burnout
Resistance to
Change
Introduction Problem Identification Recommendation Next Steps Conclusion
14. Within five years, EatRite can transform
itself into a leading 21st century grocer
Introduction Problem Identification Recommendation Next Steps Conclusion
Successful Implementation
Grow market share, expand margins,
energize employees, retain customers
2016
Website and Self
Check-Out Pilot
Complete
Invest $30 MM in
Private Label
Data Assessment &
Begin Building
2017 Mobile App
Complete
Data Building
Complete, Begin
Monitoring
Employee
Development Plan
Launched
2018
Data Monitoring
Shifts to Continuous
Improvement
Precision Marketing
of New / Loyal
Customers
University Recruiting
Expansion
2019
Data-Driven
Performance
Objectives Set
Social Media Goals:
Go Viral
Target Increased
Private Label Pricing
Power
15. Summary of Solution
Introduction Problem Identification Analysis Recommendation Conclusion
Expand EatRite’s Signature Private Label
Launch Data and Technology Initiatives
Actively Invest in Human Capital
Sustainable, Secure Solutions
Accessible and Electronic Due Diligence Services
Personalized Liability Analysis and Mitigation
Business Implementation Strategies for Long-Term Sustainability