The relative lack of South African retail presence, combined with a mood of pessimistic doubtfulness and lack of data among some of the most vocal in attendance, was tellingly juxtaposed by the contribution from Justin Suter (IBM/ex-Sainsbury UK).
While Suter didn't seek to portray the European efficient consumer response (ECR) movement as a resounding success on all fronts, he was armed with data galore. Not all of it fascinating but all serious and pertinent: on-shelf availability is a big issue for consumers (shoppers). His material point being: without retailers and suppliers working together, you can't fix it.
What he didn't add, but should have, is that for ECR and its attendant initiatives to take root and have traction in any market, a major retailer has to get serious. ECR only happened in the UK once retailers committed themselves to centralised distribution and started taking hard control of the real commercial drivers: How to optimise the return from space, stock, talent, suppliers and shoppers? And their sole aim is to be better retailers and build market share through sustained improvements in customer loyalty.
The more retailers understand about and meet the needs and aspirations of their shoppers, the more shoppers come to their stores and the more they spend when they're there. Forward-thinking retailers seriously invest money, often in conjunction with suppliers, looking variously at the whole store offer or particular categories to understand what shoppers like/dislike about the store offer - range, presentation, price, promotion, service - and what they value in other people's approaches. And then work with suppliers to deliver compelling responses that wins customers' hearts, minds and cash.
Here's a case in point. In the late 1990s, Asda UK (now part of the Wal*Mart family) did some interesting research to find out what shoppers did after shopping on their busiest trading nights (Thursday/Friday). The answer was that a huge percentage stopped off at Indian/Chinese takeaways and bought a take home meal. Obvious really, who wants to start cooking after spending two hours shopping on a Thursday night?
This insight led to the launch of Asda's "Curry Pot" - and its transformation into the largest retailer of Indian take-out food in the UK. But to make it real, Asda needed a supplier partner who could deliver this product, at the right quality, price and with the right service standards across 200 stores. To Suter's points, Asda could envision the idea but couldn't deliver it on its own.
In the UK, Asda was the first retailer to adopt category management and ECR ways of working. It was driven by need: it was going bust. Tesco remains perhaps the most nimble and committed while both Sainsbury and M&S have restored the health of their businesses by doing the two things ECR demands: re-engineer genuine efficiencies on the supply side in conjunction with suppliers and plough the savings into growth-driving activities aligned to what your customers (consumers/shoppers) want, either knowingly or latently, from your brand. All things being equal, retailers should not compete on price - this is just the table stakes: the real battleground should be offer, service and the total shopping experience. (just visit Woolworths Food stores or Foschini @ Home).
Globally, Glendinning has been supporting joint working initiatives with Tesco, Boots, World Duty Free, Wal*Mart, Carrefour and their suppliers as a major part of our core consultancy over the last ten years. It's meat and drink to us. The big idea isn't the process itself, but the business driving opportunities that flow from the process and the focus on rapid testing in-store before rolling across the retailer's estate.
In South Africa, we are working with suppliers who have rigorously re-engineered their value chains to deliver improved returns and sustained consumer value. Others are seriously investing in shopper insights and customer profit management to help build edge for themselves with their customers - but often customers aren't open to receiving the information, let alone able to work with it.
At the retail level, Pick 'n Pay are making some promising moves in developing category management focus but it will need to crack the conundrums of how category management and ECR initiatives can become ways of working in a decentralised system and ramp up its own data integrity standards. But these are just operational challenges and if it really wants to, Pick 'n Pay will find a way through. Sadly, none of this real meat made it to the conference floor.
If ECR South Africa is to have a future, we must have a real agenda that facilitates a level of debate and action worthy of our industry. There's plenty of beef that's well worth chewing; we just need leadership with sharp teeth and enough belief to start carving. As Ronald Reagan also said: "If you're afraid of the future, then get out of the way, stand aside."
Enough said.
