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p. 1
SHELF READY PACKAGING (SRP)SHELF READY PACKAGING (SRP) – – THE FUTURE OF RUSSIAN RETAILTHE FUTURE OF RUSSIAN RETAIL
Galant AlexanderMerchandising head of discounter format
p. 2
Transport package that
1.Meets ergonomic requirements of the retailer;
2.Easy to open;3.Customer friendly design;4.Easy to ID;5.Easy to dispose;
SRP. WHAT IS IT?
p. 3SCA Packaging St. Petersburg3
p. 4SCA Packaging St. Petersburg4
p. 5SCA Packaging St. Petersburg5
p. 6
EVOLUTION IN SHELF READY PACKAGING
Non SRPCases (0201)Wraps (0406)
1st gen. SRP Cases with
perforation Wraps with
perforation
2nd gen. SRP Two piece
boxes Tray & lid
Dynamic SRP Product in front Gravity Always visible No re-work
p. 7
SRP DEVELOPMENT IN FMCG SECTOR IN EUROPE
2005 2010% annual growth
mln, m2 % mln, m2 %
SRP 7 064 40,5 9 670 47,6 6,2
Conventional packaging 10 379 59,5 10 645 52,4 0,2
Total 17 443 100 20 315 100 2,9
p. 8
RETAIL COSTS
Stock keeping15%
Receiving15%
Shelf service30%
Service5%
Cashier25%
OH 10%
p. 9
OUR OUR TARGETTARGET
THE TARGET
OPEX reduction in terms of payroll
Out of stock reduction
Feeling of wide choice despite limited assortment
p. 10
MODERN GROCERY DISTRIBUTION
The discount channel is set for the strongest growth.
2009 saw strong discount store growth in the key markets of Europe and North America.
Hypermarkets will see relatively low growth due to saturated markets, the high cost of investment per store and growing pressure on non-food sales.
The discount channel to benefit from the focus on value/price
Global: Store Number Growth by Channel, 2009-2011
p. 11
EUROPEAN DISCOUNTERS PRACTICE
80% SKU in SRP →
• Feeling of wide choice despite limited assortment (1,5-2 th. SKU);
• Store looks colorful
• Minimal staff needed for shelving
p. 12
TOP10 RETAIL CHAINS IN RUSSIA
NameSales
mln. RUR Growth 09 / 08,
%Market share,
%Stores
quantity
X5 366,777 +21.6 5.0 1,923
Magnit 165,999 +24.5 2.3 3,197
Auchan 109,573 +25.1 1.5 64
Kopeyka 65,762 +25.8 0.9 659
Dixy 60,685 +27.1 0.8 638
Lenta 55,600 +9.4 0.8 35
Victoriya 50,111 +22.1 0.7 254
7 Kontinent 40,281 +20.9 0.5 143
Okey 40,171 +37.0 0.5 47
Real (Metro Group) 15,036 -2.6 0.2 15
Joint projects with SCA Packaging Russia
p. 13
LACK OF INTERACTION BETWEEN MANUFACTURERS AND RETAILERS IN TERMS OF TRANSPORT PACKAGING
MANUFACTURER - RETAILER. PROBLEMS
Large one-off investments needed to implement SRP
Lack of SRP manufacturers on the market
Not all manufacturers realize advantages of SRP
Lack of experience
Retailers are not consolidated
p. 14
MANUFACTURER - RETAILER. PROBLEMS
14,6%
7,6%
20,1%
29,2%
52,1%
58,3%
48,6%
67,4%
62,5%
15,2%
12,4%
20,0%
25,7%
36,2%
45,7%
46,7%
63,8%
64,8%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Other
Shopper disapproval
Reluctance to particpate
Packaging redesign
Equipment costs
Different shelf sizez
Implementation costs
Supply chain costs(including production)
Lack of commonstandards
2007
2006
What are the Key Barriers in Adopting RRP Across the Industry?
p. 15
PACKAGING PROBLEMS IN RETAIL
SRP imitated by merchandisers
Other supplier's/producer’s packaging is used
Product damage when opening package
p. 16
RUSSIAN MADE -
• Package is brown and faceless. Hard to find the product in DC;• No design, no color;• Package is fragile and jammed;• Hard to open;• Doesn’t fit the shelf;
PACKAGE COMPARISON
p. 17
Easy to IDEasy to ID
RETAILERS ADVANTAGES
OOS andOOS and OOD reductionOOD reduction
Easy shelvingEasy shelving
Feeling of abundance Feeling of abundance
OPEX REDUCTIONOPEX REDUCTION
p. 18
Wider assortment on the Wider assortment on the same spacesame space
All tastes are All tastes are blocked blocked togethertogether
Easier goods receivingEasier goods receiving, , stock stock takingtaking, , product IDproduct ID
RETAILERS ADVANTAGES. MIX BOX
p. 19
Guaranteed facingGuaranteed facing
Brand promotionBrand promotion
Brand-block creationBrand-block creation
Face to customersFace to customers
MANUFACTURER’S ADVANTAGE
p. 20
MANUFACTURER’S ADVANTAGE
Advertising space ~18 м2~30 000 RUR/ monthTotal: ~ 1670 RUR/m2
Advertising space ~0,5 м2~134 RUR/monthTotal: ~268 RUR/m2
p. 21
Merchandisers costs reduction
OOS reduction
Easy to ID
Shrinkage reduction
Easy to make a display
MANUFACTURER’S ADVANTAGE
p. 22
PRIVATE LABEL
PRIVATE LABEL –is the best example of SRP implementation
SRP usage achieves 80-100% for goods under PL among West European retailers (Carrefour, TESCO, Aldi and others).
p. 23
PRIVATE LABEL
• X5: Plans to increase PL share up to 30-50% in the medium term.
• METRO GROUP: Plans to increase PL share from 8% up to 10-11% by 2012 year.
• MAGNIT: Plans to increase PL share up to 20% by 2015 year.
p. 24
SHELF READY PACKAGING
SCA Packaging together with retailers and suppliers launched a project to implement SRP
ConsumerProducer Retailer
p. 25
SHELF READY PACKAGING
PROBLEM SOLVING
RETAILER
SCA PACKAGING
SUPPLIER SUPPLIER
p. 26
PROJECT TEAM
Sales manager
Designer
Supplier
Merchandising manager
Category manager
Key account manager
Logistics manager and/or purchasing manager
Brand manager
Retailer
p. 27
PARTICIPANTS AND THEIR INPUT TO PROCESS
Retailer Producer
CostsResponsibility for implementation
Quantity of products in a box Product
information
SCA
SRP proven designs
SCA tools
Customized shapes and graphics
Prob
lem
sol
ving
p. 28
TOOLS
Во время проведения совместных с клиентами семинаров мы используем логистический подход и собственные средства проектирования
Оптимальное размещение продукции
• Cape
Дизайнерские программы
• Artios CAD
• Adobe CS
Библиотека готовых решений• Midas
Программа расчета прочности коробки
• SAM
3-D визуализация
• ImagineПлоттер
p. 29
STREAMLINING THE DECISION PROCESS
SHOPPER
MANUFACTURERRETAILER
SPEEDSPEED
p. 30SCA Packaging St. Petersburg30
Costs after…
0
2000
4000
6000
8000
10000
12000
14000
Price persecondary
pack
Packagingprocess at
customer site
Primarydistribution
Storage andhandling at DC
RetailerDistribution
Store logistics Total cost0
2000
4000
6000
8000
10000
12000
14000
Price persecondary
pack
Packagingprocess at
customer site
Primarydistribution
Storage andhandling at DC
RetailerDistribution
Store logistics Total cost
Costs before…
p. 31
SRP IMPLEMENTATION
While cost for packaging increased by 76 000 RUR, return losses decreased by 1 500 000 RUR per month.
Before… …after
p. 32
FIRST RESULTS
p. 33
SUMMARY
2. SRP projects with category leaders, holders of world’s best practice-
3. Package requirements are listed in PL tendering terms and conditions
1. Mutual advantages for retailers and manufacturers. SRP provides instant result;
p. 34
THANK YOU!
LET’S DO IT!
DEPTH max 40 CMWIDTH max 30 CMHEIGHT max 30 CM
Our ergonomic requirements