As technology makes it easier to both gather data from supermarket operations and pull actionable insight from that data, some grocers are exposing this information to department leaders in each of their stores to drive improvement from the ground up.
We sat down with Chad Knutson, Asset Protection Profit Improvement Manager at Wisconsin’s Festival Foods, to discuss three such reports he’s sharing with department leaders.
For grocers with the ability to build their own systems, the components of a shrink tracking system don’t have be complicated. Make sure personnel scan out all of the lost products with a specific reason code, noting whether they’re damaged, out of date, overproduced, seasonal discontinued, etc., then note whether the item was donated or not. This way, you can send department leaders reports to get an informed idea of where losses and inventory gaps came from during routine audits, making it easier to focus on addressing the root causes of the problem.
Festival Foods, for example, was able to save hundreds of thousands of dollars in damaged goods by tracking the losses back to the box cutters being used to open boxes on-site–a simple fix that resulted in massive savings.
With shrink reporting functionality, these systems can become powerful on a weekly basis. Automated reports can be sorted by shrink dollars so department leaders can identify high dollar issues item-by-item.
“Whether it’s a product transfer, a recall, or something else, each store is always tracking the sources of shrink,” Knutson said. “We give department leader the autonomy to customize their shrink reports any way they want to make them as valuable as possible.”
With basket size shrinking and shopping trips becoming less frequent, grocers should be paying more attention to optimizing their in-store experience and keeping customers in the store for longer periods of the time. This makes visual merchandising more important than ever.
Cutting edge tools like 1010data and Shelf Logic can help supermarket merchandising decision-makers gather data to create reports and create extremely detailed planograms.
At Festival Foods, merchandising aligns closely with special offers and other promotions.
“We put all of that information in the hands of our department leaders so they can create engaging, fresh displays designed around what our guests expect to see,” Knutson said.
Compliance reporting ensures shrink dollar amounts are made available to everyone who needs to see them on a routine basis.
With these reports in-hand, staff can clearly identify the highs and lows and act on them accordingly. High numbers may indicate that something was entered incorrectly or flag a pricing problem, while low numbers may indicate that the department didn’t execute the scanning plan for some reason, which can be then be further investigated and dealt with.
When compliance reporting works, it can quickly become a natural part of the training process throughout stores and their departments, both for new hires and new locations or acquisitions. A handful of associates can be trained at a time, passing the process onto others without intensive instruction.
“We strengthen our compliance reporting system with department-specific resources that quickly highlight the top six things that help with shrink,” Knutson said. “It’s a great motivator for our associates.”