Re-Inventing Retail:

Making a Difference at

the Shelf

Re-Inventing Retail:

Making a Difference at

the Shelf

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Discussion TopicsDiscussion Topics

Project Foundation/Timeline

Re-Invent Retail Strategy

Re-Invent Retail Coverage Model

Technology & Tools

How’s It Working?

Re-Invent Retail

Strategy

Re-Invent Retail

Strategy

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Strategic Partnersfor Retail project

Strategic Partnersfor Retail project

Internal Acosta cross-functional team

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Acosta Strategic PrioritiesAcosta Strategic Priorities

Analytics / AssessmentBain analytic teamAcosta taskforceDesign Working Team – 8 monthsBain design teamSenior Acosta team

Test and Pilot

MEI NARS Technology – Canada testTest markets – test structure & process elementsPilot markets – test complete modelImplementationProject team – 12 month commitment (planning/training) National Rollout – 6 months

•Re-invent Retail

•Scorecarding

Strategic initiatives to address key industry dynamics:

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Project Goal: Significantly Improve

Distribution, Shelving, New Item Execution, and Merchandising

Project Goal: Significantly Improve

Distribution, Shelving, New Item Execution, and Merchandising

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2522

19

14

96

4 4

0

10

20

30

Average value of retail services

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What Drives Performance for the Key Elements of Retail Services?What Drives Performance for the Key Elements of Retail Services?

Distribution ShelvingNew item execution

Merchan-dising

Overall average

Call frequency 1 1 1 1 1.0

Time in Store 2 2 2 3 2.3

Category/ Product knowledge

3 3 4 4 3.5

Data/ Technology

5 5 5 5 4.8

Customer Expertise 4 4 3 2 3.3

Driver

Frequency & time in store are the most important drivers of superior retail execution

Rank ordered importance of drivers (1-5)

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New Retail Model – Key PrinciplesNew Retail Model – Key Principles Maximize SCALE through Syndicated Coverage

Enables greatest frequency & duration in highest volume stores At the point of opportunity more often Fewer stores…avg. 14 per rep = greater store expertise 50% less drive time…More time in-store

Dedicated Retailer Vertical Teams Greater retailer penetration Enables more effective work in store

Full-Time Associates on coverage Reduced turn-over…Higher Skill Utilize part time for set work

Focused by Trade Class Dedicated Fresh Team

Requires unique skill sets State-of-the-art Technology system

Re-Invent Retail

Coverage Model

Re-Invent Retail

Coverage Model

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Retail coverage variables

Continuity Coverage Segmentation

Continuity Coverage Segmentation

Store characteristics

Grocery Mass Natural/Specialty

Product line

Core store Dairy, Frozen,

Grocery, HBC/GM Fresh Products

Produce, Deli, Meat

Channel

Volume Buying authority CDI & BDI

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Coordinated Offering With Focused, Differentiated Services

Segmentation by channel and product lines

Segmentation by channel and product lines

Fresh Products

Fresh foods team

Core Store

Syndicated grocery team

Coverage team

Frequency 2X per mo. & 1x per mo. 61% ACV Weekly coverage

86% ACV 2x/month covg

Key drivers of value

Ability to identify stores with high buying authority

Knowledge of product portfolio

Relationships with store-level decision-makers

Duration of coverage - work

Frequency of visits Ability to respond to voids

and OOS rapidly Ability to leverage POS

data proactively and reactively

Wal*Mart

Dedicated Wal-Mart Teams

Anchor Team-WMSC Syndicated-Div 1

2X/month-WMSC 1X/month-Div 1

In stock rates-99%+ STS new items-98%/4 wks Modular/Merchandising

compliance Improve product

awareness with dept. level penetration/training

Grocery Mass

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Priorities are Designed to Focus on the Highest Value

Work

Priorities are Designed to Focus on the Highest Value

WorkPriority 1

Priority 2

Priority 3

Priority 4

New Items

Distribution Voids

Merchandising Questions

Tasks (To-Do’s)

=

=

=

=

•Rules engines designed to insure prioritization consistency & compliance

•Additional matrix for individual SKU volume

•Gatekeepers insure focus and allow for potential extreme exceptions

Technology & Tools

Technology & Tools

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In-store opportunity identification – tools & technology

In-store opportunity identification – tools & technology

DMS: In-store Distribution Management System•Voids identified by retailer, by store, by period•Resides on intranet site on ASSET •Accessible to all Business Managers

Data Prism: •system for analyzing retailer POS data•identifies distribution voids

Void Algorithm:•Developed with Bain•Accurately identifies void items – driving efficiency

MEI:•Enterprise retail system•Store-specific APL’s reside on PPC•Communicates store specific opportunities

Data sources:•Syndicated•Retailer POS•TD Linx

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Tools and Technology Store-Specific Call Plan

Tools and Technology Store-Specific Call Plan

NationalStrategy

Local Opportunities& Activities

Void Data

Store Call Script•(P1) New Items•(P2) Voids•(P3) Questions•(P4)Tasks

•Store Specific•Date SpecificA

costa

Pri

ori

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tion

Syste

m

Sto

re S

pecifi

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PL

Retailer POS

Syndicated

How’s It Working?How’s It Working?

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Post Re-Invent Retail Results

Post Re-Invent Retail Results

Store coverage at 97% Call per store averaging 2.3 per store per month New Item speed to shelf at 63% in 4 weeks Closing >90% of all identified voids each month Averaging 9 hours coverage/store/month Completing 95% objectives/call Scan rates have improved 1.2%

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•Up 1.5 POINTS since inception of Re-Invent Retail…•Over 32,000 net distribution points added.

HBC manufacturer

HBC manufacturer

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Distribution AnalysisManufacturer C – Pre vs. Post Rollout

Source: Manufacturer C Dashboards, Pre-Rollout Data (1/21/04) and Post-Rollout Data (11/06/04)

Distribution Analysis Pre Rollout vs. Post Rollout

# Storesin Chain

TPD'sAvg Sku's per

Store

Period: 1/ 21/ 04 10,139 1,246,893 123

Period: 11/ 06/ 04 9,774 1,341,913 137

Difference (365) 95,020 14

% Change (3.6) 7.6 11.4

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Fastest Manufacturer Speed to Shelf Results Ever!!!

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Brand G Void Closure Q4 ’04

$8,600,000 annual impact for Brand G

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How has RIR ImpactedManufacturer B at Retail So Far?

How has RIR ImpactedManufacturer B at Retail So Far?

Distribution improving– scan data reflect positive changes in distribution…

plus 2.8 points or 3.7% Voids decreasing

– 9.5% no scan reduction versus July ’04– Nearly 5000 voids filled

New Item Speed to Shelf– STS has increased 50% (based on retail availability)– New Item at 94% tagged where authorized

Based on MEI reports/ scan data.

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Acosta Re-Invent Retail Model Recap

Acosta Re-Invent Retail Model Recap

Scale Creates the foundation for most efficient model

Syndicated model provides for greater efficiency Greater frequency and duration in the store

Focused by Trade Class Allows for greatest retailer knowledge

Superior tools and technology Identifies greatest opportunity stores Laser focused scripted tasks

Superior in-store performance Full-time associates on coverage teams Vertical by customer – provides greater focus

42,000+ calls per month/2.4 average per store per month

At the point of opportunity