Private Label development as an integral part of Category Management. UK & Partners Group / Andreas Titze Kyiv, 30. April 2015

Transcription

1 Private Label development as an integral part of Management UK & Partners Group / Andreas Titze Kyiv, 30. April 2015

2 UK & PARTNERS Group is a Global Business Solution Provider and Consulting Company for Retail and FMCG. Our approach is different. We bring decades of SENIOR EXECUTIVE EXPERIENCE, coupled with UK & Partners Group, years heritage of restructuring and operational consulting. This means that we are able to DELIVER practical, measurable and sustainable RESULTS, rather than PowerPoint presentations. We are working with more than 100 interim Managers globally as freelancers on the different projects. Our retail and FMCG expertise combined with the wider global UK & Partners Group capability means we can quickly assemble world class teams and deliver truly integrated solutions to RESOLVE COMPLEX PROBLEMS. EXPERTS - ACTIONS - RESULTS

3 Andreas Titze Managing Partner Retail & Wholesale 25+ years professional experience Business Development - Growth and Expansion Strategy Performance Improvement - Turnaround Management Management - Assortment Optimization Brand Management - Pricing Strategy - Marketing Inventory Management - Working Capital Improvements Product Development - Global Sourcing and Procurement Supply Chain Management - Goods Management Process Reengineering - Organizational Effectiveness

4 Private Label development as an integral part of Management How to optimize sales and profitability with a holistic Management approach Agenda/Key Questions: How to implement a Management system which is customer-centric and fact-based How to successfully define Strategic Roles and Tactics How to improve Profitability by using assortment optimization tools How to use Direct-Product-Profitability (DPP) to evaluate the real performance How to create competitive advantage with a competent Private Label assortment

5 Management Collaborative management concept between retailers and suppliers/producers Efficient tool to identify relevant customer segments and to fulfill their expectations Customer-centric and fact-based process for continuous improvement and optimization Systematic and holistic approach to maximize category sales and profitability Pre-condition and integral part for successful Private Label development Management Brand Management Format Strategy Pricing Strategy Assortment Strategy Supplier Management Private Label Development Promotion Management Space Management Supply Chain Management Service Strategy Profitability Management

6 How to implement a Management system which is customer-centric and fact-based Management = Collaboration Management Diagnostic / Root Causes Market Market/ & Competition Competition Financial Market/ KPI Competition Format Analysis Customer Research Strategy Definition Strategic Market/ Target Competition Picture Value Market/ Proposition Competition Customer Segmentation Strategic Roles Execution Diagnostic Plan Targets Implementation Profitability Management Customer Profitability Article Profitability Profitability Supplier Profitability

7 Strategy Definition How to successfully define Strategic Roles and Tactics 3 STEPS 1 Preference for Products (Customer Draw) What are the most preferred products by consumers Reason to come and shop Shopping Frequency Final Decision Strategic Role 2 Value to the Business (Profit Generation) What are the most profitable categories Gross Margin Return on Inventory (GMROI) Direct product profitability per category profitability per sales area 3 Role and Implications Adjustment of calculated role Strategic considerations Balanced Matrix Market / competitive assessment

8 Strategic Roles and Tactics Opportunistic Essential Traffic Power Limited SKUs supplement the offer Competent assortment breath/depth Frequently purchased items Major driver of sales and profit Assortment depends on customer needs Covers complete price structure L/M/H Must have items never out of stock Market Authority and Competence Narrow offer of selected brands Focus on essential customer needs Traffic Building reason to come Differentiation vs. competition Moderate pricing focus on L/M Best availability ease of shopping High Volume strong presence Competitive range Good/Better/Best Limited Own Brand assortment Competitively priced value for money Aggressive pricing low profitability Dominant Private Label assortment Low/moderate amount of promotions Medium level of promotional activities Main driver for price/value image Competitive pricing to support authority Support `All under one roof image Competent Private Label assortment Strong promotional activities Attractive Merchandising Easy to shop Tactical profit taking maximize profit Fundamental profit generation Limited number of SKUs Product Innovation and Newness Basic Merchandising low inventory Supports `All under one roof image Easy Handling Mass Merchandising Strong promotional presence Complementary Offer/ Profit Taking Competitive Offer/ Profit Generator High Volume/Traffic Building Authority/Differentiation

9 Execution How to improve Profitability by using assortment optimization tools Step I Diagnostic Step I Diagnostic Step II Plan Step II Step III Step IV Plan Targets Implementation How relevant is the category for the target customer What is the Strategic Role of the category How attractive is the market for the category What are the most important sub-categories/skus What is the current pricing Market/ and promotion strategy Competition How profitable is the category/sub-categories What is the performance/potential of Private Label Who are the main competitors in the market What is the performance vs. the market/competition What is the pricing structure vs. competition How is the customer evaluating the assortment Sub- Mix SKU Adjustments Pricing Architecture (Good-Better-Best) Branding Structure Private Label Strategy Market/ Competition Space Allocation and Merchandising Seasonality Innovation/Newness Promotion and Advertising Tactics Value Added Services Root causes + Drivers Assortment Optimization

10 How to use Direct-Product-Profitability (DPP) to evaluate the real performance Management = Collaboration Management Diagnostic / Root Causes Market Market/ & Competition Competition Financial Market/ KPI Competition Format Analysis Customer Research Strategy Definition Strategic Market/ Target Competition Picture Value Market/ Proposition Competition Customer Segmentation Strategic Roles Execution Diagnostic Plan Targets Implementation Profitability Management Customer Profitability Article Profitability Profitability Supplier Profitability

11 How to use Direct-Product-Profitability (DPP) to evaluate the real performance - = + Profitability on Article Level Turnover Cost of Goods Sold (COGS) Gross margin Later income Providing a better indication of the real profitability Allows benchmarking and true comparison Powerful tool for strategic and operational decisions 1 Determine Total Income on article level = Total income - - Cost related to category General cost 2 Allocate all direct cost related to categories (allocation key t.b.d.) = Direct Product Profitability (DPP) 3 Allocate all direct costs related to articles (allocation key t.b.d., e.g. sales ratio)

12 Private Label How to create competitive advantage with a competent Private Label assortment Private Label Brand Architecture Competitive Advantage Premium (High) Growth Differentiation Customer Loyalty Better (Medium) Good (Low) Profitability Private Label Innovation Image/Profile Choice/Selection Opening Price Point (OPP) Attractiveness

13 Private Label development as an integral part of Management How to optimize sales and profitability with a holistic Management approach Agenda/Key Questions: How to implement a Management system which is customer-centric and fact-based How to successfully define Strategic Roles and Tactics How to improve Profitability by using assortment optimization tools How to use Direct-Product-Profitability (DPP) to evaluate the real performance How to create competitive advantage with a competent Private Label assortment

14 10 Management actions to successfully boost Sales and Profitability 1 Implement a Management System that is customer-centric and fact based decision taking 2 Introduce a holistic Profitability Management to evaluate the real performance by considering all facts 3 Decide an overall Value Proposition to meet the needs and expectations of the target customer groups 4 Define Strategic Roles based on `Value to the Customer and `Value to the Business 5 Increase Profitability by using assortment optimization tools and process reengineering 6 Implement restrictive Inventory Management tools to improve the Working Capital and Cash-Flow situation 7 Introduce a competent Private Label assortment to differentiate and gain additional profitability 8 Maximize sales growth and profitability through a balanced Portfolio and Product Mix 9 Ensure full control over the Pricing & Promotion Management, Pricing Excellence is a key profit lever 10 Optimize the Space & Shelf Profitability by creating planograms which are in line with the category strategy

15 UK & Partners Group has comprehensive expertise in Management and Profitability Management Customer-Centric Management & Profitability Management Global expertise in strategic and operational Management Extensive experience in Profitability Management and Fact Based Negotiations Striving for excellent results and building a high performance organization Profound knowledge of category analysis and performance tracking Distinctive entrepreneurial approach and strong customer-centric attitude Strong collaboration and high commitment to your further growth and success

16 Retail Experts UKPG professionals are long-serving Retail and FMCG executives, who provide their significant experience and comprehensive General Management know-how to accelerate operational and financial performance. Our expertise covers all strategic and operational aspects of retail, including Procurement, Management, Marketing, Supply Chain, Store Operations, Distribution, Expansion and Working Capital Management. We have worked for leading retail companies with a successful record of performance improvements during operational challenges and transformation processes. UKPG offers an exceptional combination of operational expertise, pragmatic hands-on solutions and result-oriented procedures.

17 FMCG Experts

18 GLOBAL OVERVIEW Overview UK & PARTNERS GROUP founded in 2004 by Uwe W. Klenk More than 10 countries More than 100 Interim Managers Wider UK & Partners Capability Global Business Corporate Solutions Cyber Security Real Estate Private Equity Performance Improvement Transaction Advisory Services Financial & Operational Due Diligence Sector Screening Channel Strategy Our Main Industries Retail FMCG Some of Our key Areas Interim Management Management Restructuring Turnaround Start Up IPO M & A Private Label E-Commerce / Digital Procurement Efficiency Coaching Top Management Supply Chain Optimization Executive Positions Trend Research

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20 Thank you for your attention!