NEXT CASE STUDY
Case Study: Capturing Sales, Restoring Control
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Assembling and maintaining the pieces of the puzzle that make up the item file and pricebook is essential to the success of any Scan-Based-Trading Program |
Company Description
A regional convenience store chain with over 1,100 stores throughout the East Coast and Florida, and several billion dollars in annual revenues.
Challenge
Had fewer than 1,000 UPC code in its item file for the DSD Category in question, newspapers. Even among those newspapers in the item file, many newspapers were ringing-up at the wrong retail price because the chain's pricebook for the category had been maintained haphazardly. Cashiers didn't trust the data in the system, and were using the “General Merchandise – Non Taxable” key for over 75% of transactions in the category. The merchandiser wasn't getting credit for sales in the category and payables exceeed recorded sales. The retailer was unsure if it was making or losing money in the category.
Actions
* iControl helped the retailer make an announcement to the supply chain announcing the program
* iControl then contacted every store to find out what newspapers the store was selling, and relying on a combination of its database of newspapers and distributors, rebuilt the retailer’s item file and pricebook from scratch.
* By the time the program went live, 99.8% of newspapers carried by the retailer were properly loaded into the retailer’s system – at the correct UPC, cost, and retail price. iControl continued to track missing items to perfect the item file and pricebook, and achieved 100% accuracy by week 7.
* iControl participated in training sessions of field staff, to rebuild trust and confidence in the data so that store staff would know to scan newspapers without giving the matter a second thought.
* After the program began, scanning results were tracked weekly by iControl and compared to data from suppliers – by store – and iControl directly contacted any store that had a variance exceeding 20%, then 15%, then 10%, gradually started calling stores with variances of 8%, 6% and finally 4%.
Results
iControl helped the retailer go from “Dark” to “Light” – the category sales and margins became fully visible so the retailer can evaluate its overall business, its individual suppliers, and its store clerks.
* Cashiers that were not scanning newspapers even after the program began were re-trained, and those who persisted were terminated.
* The manual process that caused so many errors and made the cateogry invisible at corporate was replaced with a smooth-operating process that includes EDI updates of the item file and pricebook
* Sales were appropriately booked to the newspaper category and the merchandiser
* Three months into the program, the retailer’s overall scan rate of newspapers was 92.3%; six months in it was 94.6%, nine months in it was 98.2%
* The retailer was able to determine that while it had previously lost money, it was now making over $1 million per year in net profit on the category!
Maintenance
iControl continues to track scanning by store on a weekly basis. If any exceptions prop-up, iControl immediately deals with them by contacting the store, its district supervisor, the distributor, and the category manager. Maintaing a high level of scanning is essential to an SBT program.
