The growing food business. November 2016
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1 The growing food business November 2016
2 Fresh Food Market Overview Total fresh food market: R84,7 billion Growing at 11,1% Versus last year 10% Y+Y Growth Includes chicken bread + processed meats + bakery meat fruit and veg deli cheese By 2020 expected to grow to R124 billion The growing food business November
3 How are we going to grow our share? Focus is on butchery, produce and bakery, in Game, Makro, Cambridge Food, Rhino and Masscash Central services are operational in Makro, Game (expanding in 2017) and Masscash as a trial. Experienced people, correct ordering and aggressive promotional activity has resulted in turnover growth and reduced expenses and waste. The growing food business November
4 Our focus to support this Direct farm procurement Food safe environment Cold chain In-store execution Quality A low cost service model to enable us to pass on better pricing to our consumers. Better in-store execution with trained food handlers and having the right stock at the right time is essential. Effective cold chain management and speed to market to ensure better quality that lasts and tastes good. The growing food business November
5 Private label development 5 10% Cheaper International trends have told us that own and confined label development has driven growth ahead of that in fresh foods, and hence the launch of Marketside and confined labels. Marketside is a Walmart brand, currently implemented across some areas of fresh produce and meat. Targeted at our LSM 6-10 customers, we aim to be up to 10% cheaper than other brands and private labels. Offering exceptional value for money while focusing on quality. The growing food business November
6 From farm to fork In the past 2 years we have focused on the removal of third party concessionary operators. Reducing costs in our Fruitspot and central meat plant operation. Created strategic relationships with Bakery suppliers to leverage scale and efficiency. Continued to focus on direct procurement The growing food business November
7 Fruitspot expansion Successful Johannesburg business, has now expanded to Cape Town and was opened on the 1st November KZN Fruitspot facility will open towards the middle of November This means: Better procurement Improved low cost service delivery Total control of our produce buying nationally The growing food business November
8 Food safety at the centre The growing food business November
9 Tailor-made solutions The growing food business November
10 New central meat plant Currently under construction Plan to open July 2017 Supply to all owned businesses, and commercial customers Low cost operating model Better procurement opportunities to leverage price, quality and consistency. The growing food business November
11 Bakery and floral We are in the process of consolidating our bakery supply, with a strategic partner in order to leverage scale and efficiency for complex bakery production. Improved range, quality and price remain the key focus. First Makro flower shop has proven successful at Silverlakes. Resulted in an accelerated plan to rollout a further two more in 2016, and a further 10 in The growing food business November
12 How we save customers money so they can live better Low cost operating model Improve our distribution capabilities Focus on delivering quality Build a private label brand in Marketside Become the trusted fresh food brand across our estate. The growing food business November
13 The prize Fresh Food can contribute between 30-40% of total food sales in retail Freshness, Quality and Variety keep customers coming back for more Good fresh food stores drive preferred shopper choices 10% Y+Y Growth It s a high traffic volume generator. The growing food business November
14 Are we getting it? The growing food business November
15
16 Creating value through BIG data insights Private and confidential
17 BIG data - transactional What they buy When they buy How much they buy At what price, and margin How they pay What they buy together How they order, where they collect/deliver Where they buy ALL Customers, EVERY transaction
18 Makro s BIG data in context Item Basket Customer Segment Salesman Department Store Region Item Supplier Category In any combination ALL Customers, EVERY transaction
19 Makro customers Retail Commercial own-use Commercial resell
20 BIG data customers Name Age Race Address Tel Wealth Index Property Ownership Married/Single Director?
21 Makro BIG data segments
22 BIG data segmentation Acquire, retain and grow profitable customer segments Discover insights from the current base and evaluate focus segments for growth Prioritise target segments for acquisition campaigns and identify high value customers early Manage customer buying behaviour and identify opportunities for upsell and cross-sell Chart the customer journey and deliver more personalised experiences in campaigns, offers and messages across all channels
23 BIG data Over the last 8 years: Since 2009: 5.3 million unique customers, majority SMS and eligible million Invoices processed 122 million Instore visits by customers 1.2 million Average unique visits per month to makro.co.za 2.3 billion Transaction items resulting in 48 billion Data points, adding Enriched data points per customer including male/female, predicted race, lifestyle segment, wealth index, property ownership etc) Additional data points per customer including store, time-of-day, day-ofweek, week-of-month, month-of year, payment type 6 billion Data points per annum
24 small data
25 small data
26 small data
27 small data
28 small data
29 small data Makro Silver Lakes Kempton Park
30 small data
31 small data SMS Cell C cell number address
32 small data SMS Shopping online?
33 small data SMS Shopping online?
34 small data SMS Shopping online?
35 Campaigns and BIG data
36 Commercial Customers and BIG data
37 Commercial Customers and BIG data
38
39
40 Thank you Private and confidential
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