- A young supermarket and convenience store retailer in Azerbaijan with ambitious expansion plans to achieve market leadership.
- Fragmented market, many small independents. Emerging SME’s vying for greater share of the expanding modern grocery sector.
- Wholesalers/distributors dominate the buying relationship across multiple sectors. Prices maintained at high levels, especially on imports, and limited range choice. Selling prices are set on a fixed margin ‘cost-plus’ basis by category.
- Buying capability below western standards with buyers lacking skills needed to engage with suppliers on an equitable basis.
- Stores planned and ranged in an ad hoc way with little standardisation and largely influenced by local retail management.
- Systems simple or non-existent and a lack of centrally defined written down processes results in wide variations in space use, range construction, and merchandising. Inefficiencies undermine the day to day operation.
- A ‘Back to Basics’ approach was taken to establish western style category management processes and skills starting with a review of company strategy and how it informs the allocation of space, assortment planning, and merchandising.
- The category hierarchy was reviewed to establish suitability for both category management and space management purposes.
- An audit was done to establish the ‘As Is’ space across all categories in all stores resulting in an accurate space database.
- A process was followed for a quick evaluation of return on space to determine immediate opportunities for improvement.
- A set of space rules was created as the framework for space allocation in new stores and for right-sizing space in existing stores.
- Category Managers were upskilled to equip them with western style processes to construct customer focused ranges.
- A cross functional ‘Category Hothouse’ workshop approach was used for the chosen ‘Destination Categories’ to establish the ‘As Is’ and map out an implementation plan to deliver the ‘To Be’.
- Merchandising principles were reviewed to establish simple best practice rules and guidelines for training and implementation.
- Merchandising and replenishment processes were set up in preparation for a new space management and merchandising system.
- Category Managers were equipped with clear processes supporting a defined and communicated company strategy enabling them to manage suppliers consistently across multiple categories.
- The centralised control of space enabled category managers to better forecast demand and negotiate sourcing plans with suppliers.