Supplier Advisory Board Bi-Annual Meeting Update
After a warm welcome by Rite Aid Executive Vice President of Merchandising Tony Montini, Rite Aid’s Chairman and Chief Executive Officer John Standley opened the September 12 bi-annual Supplier Advisory Board meeting with a question and answer session. Among the topics he discussed were Rite Aid’s Affordable Care Act program that places independent insurance agents in select stores to assist customers in understanding the new law; the company’s strategy to focus on best patients; new store growth; challenges faced by the drugstore industry due to federal laws and regulations; and opportunities for business growth in the beauty category, the Hispanic market, and through CRM segmentation.
After this productive discussion, the Supplier Advisory Board got down to business with committee reports. Three project reports were given by committee members to update the audience on the Joint Business Plan and Scorecard Project, the Planogram Review Project and the DSD Project.
The Joint Business Plan and Scorecard team’s goal is to create a mutually agreed-upon Joint Business Planning process between Rite Aid and its supplier partners that is strategically aligned to grow sales and profits. The Joint Business Plan will be measurable through a concise and consistent business scorecard that incorporates a disciplined assessment enabling Rite Aid and its supplier partners to assess their business in a timely and structured manner to achieve desired objectives.
The Planogram Review Project has formed three sub-committees: Category Review, Planogram Process and Store Layout.
The Category Review Subcommittee’s goal is to create a best-in-class process for category reviews. The team is reviewing gaps that exist with today’s process, identifying current industry best practices, determining the ‘critical few’ metrics that are important to the process, incorporating the findings from other subcommittees and creating an output (scorecard or other reporting) that is visible to the key stakeholders. The goal is to deliver a robust category review process that can be standardized across the Rite Aid platforms.
The goal of the Planogram Process Committee is to create a “best-in-class” planogram process that includes – but is not limited to – reducing the 217-day process and ultimately developing best and consistent practices within each task. The team has divided its efforts into three areas: the current executive review meeting and document, the planogram versioning tactics and the Rite Aid systems interfaces.
The Store Layout team’s goal is to maximize total store sales by matching the role a store plays in its community with the categories that best fit that role. The Store Layout team is now analyzing each Rite Aid store and determining the services it provides to its customers. This will allow the team to create store segments based on shopping trips.
The DSD Process Improvement project team has been focusing on five initiatives: optimizing selling space, unlocking the technology opportunity, the Rite pricing strategy, improving DSD execution and improving advertising.
The DSD Process Improvement team has challenged themselves to think differently about space allocation. They are now testing an expanded dairy and deli section in stores in California, Louisiana, Pennsylvania and North Carolina. The team has also focused on improving technology to better leverage data currently available and within the constraints of existing technology. The team’s focus on pricing strategies has led to the creation of Retail Revenue Management, which sets clear pricing strategies for each category, clearly defines pricing competitors and strengthens focus on every day prices versus advertised price.
The DSD Execution team has been focused on communication. This team has expanded the sign-in and RACS process testing to more DSD suppliers, finalized internal reporting structures to category management teams, and completed the “Doing Business with Rite Aid” and “What to Expect from Vendor/Partners” communications. These are now posted on the supplier portal. They have also completed the DSD University for new store and DSD managers and completed the internal scorecard reporting.
The goal of the DSD Improving Ads team was to provide an effective method to forecast ad sales and perform post-promotional analysis. In the past 12 months, they have uploaded ads into Promo 360, reviewed projections and adjusted submissions, included projection data into the ad proofing process, completed post-event analysis, implemented continuous cycle of improvement, and utilized the 1010 Data to make better informed decisions.
At the conclusion of the project reports, two new projects were announced: Harnessing Big Data and Retailer Best Practices.
Also, congratulations go out to Peter Thompson of Colgate who replaces Bill Graham of Beiersdorf on the Supplier Advisory Board Leadership Council. Bill’s dedication and commitment to the Leadership Council will be missed but we are excited to be gaining Peter’s enthusiasm for retail as well as his extensive CPG knowledge.
The next meeting of the Supplier Advisory Board is scheduled for Tuesday, March 25, 2014, at the Encore in Las Vegas, N.V.