Supermarket Perimeter - February 2020 - 71

OPERATIONS

A tactical approach isn't enough in today's market. Commissaries and retailers need to take a strategic
approach to manage shrink and optimize profits.

are doing the same thing they did
five years ago, Miller says.
"They're trying to use tech in
better ways, but a lot of the times,
that tech is as distracting as it is
beneficial."
For success in growing sales
and doing all the other things
necessary to maximize margins,
it all comes back to people, not
technology, Miller says.
He offers the example of the
owner of a mom-and-pop bakery
shop. That baker/owner wouldn't
get involved in the business in
the first place if she didn't love it,
and as a result, you can be pretty
sure that she pays close attention
to quality, bake time, inventory
turns, how it's displayed and
many other things. For shrink
mitigation, it means she produces
the product that is in demand,
turns quickly and has little
chance of winding up reduced or
in the dumpster.
"Never underestimate personalization of service," Miller says.

"I think in many cases we really
miss the boat on personalization
of service and CSE (customer
service excellence). The guy
who loves to bake gives more
attention to quality, display and
actually serving his customers
than a 50,000-square-foot supermarket might."
Another factor influencing
shrink and the larger issue of
profit margin optimization is
what Miller calls the "Amazon
effect," something that applies
not only to the online behemoth
but to Walmart, Target, dollar
stores and other non-traditional
grocery channels.
The effect all of these non-traditionals have is that, by adding
more and more food options to
what they sell, they're making
supermarkets operate smarter to
avoid profit loss due to shrink and
other problems, Miller says.
"They're stripping out center-store sales and will continue
to do so," he says. "But you can't

do that with very fresh/perishable
items like bananas, ground beef
or lunchmeat."
Miller believes that supermarket operators need to get over
the idea that incremental change
is good enough in the Age of
Amazon/Walmart, etc. It's not
enough, he says, to put out a few
signs, or to reorganize the order
of items in a case, displaying
something on the side instead of
at the front.
"Retailers need to think boldly,
innovate and find ways to excite
the shopping experience. There's
a lot of talk about experience.
What are they going to do to
excite the customer every time
the customer comes in?"

A strategic approach
Forward-thinking retailers,
Miller adds, take a strategic look
at managing shrink and profit
optimization.
That's especially true on the
perimeter, which is so crucial to

www.supermarketperimeter.com

the success of today's stores due
to the focus on healthy eating
and shrinking of center-store.
And, of course, due to the perishable nature of so much of what
is sold in the perimeter, managing shrink needs to be front and
center to any strategy.
"When you start talking about
perimeter sales, profitable selling
has to be the focus of every single person in the business from
the newest employee to the most
senior. Every teammate must
be trained to understand and
practice the concepts central to
profitable selling."
When you train your team
to think about shrink not as an
expense but as unrealized profit,
everything changes, Miller says.
When you change your everyday business culture to naturally
operate in profit-centric ways,
shrink comes down naturally,
almost automatically.
By using a combination of
augmented-intelligence software
that pre-analyzes data, determines the root causes of profit
loss and operational causation,
Smart Retail Solutions is creating profitable selling cultures for
retailers, Miller says.
"The whole store analytics
system takes in all relevant data
points and merges them into one
business intelligence system that
automatically correlates relevant
factors, determines what caused
the sales and/or shrink loss and
what behaviors are needed to
correct operating deficiencies,"
he says.
There are definitely ways to
beat year-over-year sales and
profit metrics. When companies
want to set the shrink reduction
bar high for their stores, commissaries, central kitchens and other
facilities that supply prepared and
other foods to grocery, they just
need to make some fundamental
changes, Miller says.
FEBRUARY 2020 - 71


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Supermarket Perimeter - February 2020

Table of Contents for the Digital Edition of Supermarket Perimeter - February 2020

Supermarket Perimeter - February 2020
Editor's Note - Meat fights back
Contents
The wire
Meal matters
Building trust
Bakery - Europain 2020
Bakery - Sourdough
Deli - Soups
Deli - Asian Cuisine
Meat & Poultry - Packaging
Meat & Poultry - Grass-fed
Produce - Snacks
Produce - Berries
Seafood - Sustainability
Food Safety - Instore bakeries
Commissary Insider
Classifieds
Ad index
Fresh takes
Supermarket Perimeter - February 2020 - Supermarket Perimeter - February 2020
Supermarket Perimeter - February 2020 - BB - 1
Supermarket Perimeter - February 2020 - BB - 2
Supermarket Perimeter - February 2020 - Supermarket Perimeter - February 2020
Supermarket Perimeter - February 2020 - 2
Supermarket Perimeter - February 2020 - Editor's Note - Meat fights back
Supermarket Perimeter - February 2020 - Contents
Supermarket Perimeter - February 2020 - 5
Supermarket Perimeter - February 2020 - The wire
Supermarket Perimeter - February 2020 - 7
Supermarket Perimeter - February 2020 - Meal matters
Supermarket Perimeter - February 2020 - 9
Supermarket Perimeter - February 2020 - 10
Supermarket Perimeter - February 2020 - 11
Supermarket Perimeter - February 2020 - 12
Supermarket Perimeter - February 2020 - 13
Supermarket Perimeter - February 2020 - Building trust
Supermarket Perimeter - February 2020 - 15
Supermarket Perimeter - February 2020 - 16
Supermarket Perimeter - February 2020 - 17
Supermarket Perimeter - February 2020 - 18
Supermarket Perimeter - February 2020 - 19
Supermarket Perimeter - February 2020 - Bakery - Europain 2020
Supermarket Perimeter - February 2020 - 21
Supermarket Perimeter - February 2020 - 22
Supermarket Perimeter - February 2020 - 23
Supermarket Perimeter - February 2020 - Bakery - Sourdough
Supermarket Perimeter - February 2020 - 25
Supermarket Perimeter - February 2020 - 26
Supermarket Perimeter - February 2020 - 27
Supermarket Perimeter - February 2020 - Deli - Soups
Supermarket Perimeter - February 2020 - 29
Supermarket Perimeter - February 2020 - 30
Supermarket Perimeter - February 2020 - 31
Supermarket Perimeter - February 2020 - Deli - Asian Cuisine
Supermarket Perimeter - February 2020 - 33
Supermarket Perimeter - February 2020 - 34
Supermarket Perimeter - February 2020 - 35
Supermarket Perimeter - February 2020 - Meat & Poultry - Packaging
Supermarket Perimeter - February 2020 - 37
Supermarket Perimeter - February 2020 - 38
Supermarket Perimeter - February 2020 - 39
Supermarket Perimeter - February 2020 - 40
Supermarket Perimeter - February 2020 - 41
Supermarket Perimeter - February 2020 - Meat & Poultry - Grass-fed
Supermarket Perimeter - February 2020 - 43
Supermarket Perimeter - February 2020 - 44
Supermarket Perimeter - February 2020 - 45
Supermarket Perimeter - February 2020 - Produce - Snacks
Supermarket Perimeter - February 2020 - 47
Supermarket Perimeter - February 2020 - 48
Supermarket Perimeter - February 2020 - 49
Supermarket Perimeter - February 2020 - Produce - Berries
Supermarket Perimeter - February 2020 - 51
Supermarket Perimeter - February 2020 - 52
Supermarket Perimeter - February 2020 - 53
Supermarket Perimeter - February 2020 - Seafood - Sustainability
Supermarket Perimeter - February 2020 - 55
Supermarket Perimeter - February 2020 - 56
Supermarket Perimeter - February 2020 - 57
Supermarket Perimeter - February 2020 - Food Safety - Instore bakeries
Supermarket Perimeter - February 2020 - 59
Supermarket Perimeter - February 2020 - 60
Supermarket Perimeter - February 2020 - 61
Supermarket Perimeter - February 2020 - 62
Supermarket Perimeter - February 2020 - Commissary Insider
Supermarket Perimeter - February 2020 - 64
Supermarket Perimeter - February 2020 - 65
Supermarket Perimeter - February 2020 - 66
Supermarket Perimeter - February 2020 - 67
Supermarket Perimeter - February 2020 - 68
Supermarket Perimeter - February 2020 - 69
Supermarket Perimeter - February 2020 - 70
Supermarket Perimeter - February 2020 - 71
Supermarket Perimeter - February 2020 - Classifieds
Supermarket Perimeter - February 2020 - Ad index
Supermarket Perimeter - February 2020 - Fresh takes
Supermarket Perimeter - February 2020 - 75
Supermarket Perimeter - February 2020 - 76
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