Overwaitea and Retail Express Breakout Session Report
Breakout Speakers:
Don Gamble: Director of IT Architecture and Development Overwaitea Food Group
Barry Grange: CEO Retail Express

The Breakout session with Overwaitea Foods and Retail Express was conducted at the IRI Retail Summit, March 2008. The breakout session gave the opportunity for Don Gamble (Director of IT Architecture and Development of Overwaitea Food Group) and Barry Grange (CEO Retail Express) to discuss and share the success of the AMP2 product implementation into the Overwaitea stores.

Today Don Gamble serves as the Director of IT Architecture and Development, he has been with Overwaitea for over seven years and was intimately involved in the selection, implementation and on going support of the Retail Express AMP2 product.
Barry Grange has a long and successful career in retail, over twenty years. He has served as the Chief Information Officer at Tesco and also sat on the board of directors. From there he ventured to the United States where he served as the Executive Vice President for World Wide Chain Store Systems, he then founded the British American Consulting Group also known as Armature which specialised in ERP and Supply Chain Systems which subsequently got sold to Lawson. Today Barry serves as the Chief Executive Officer and is a founder of Retail Express.

Overwaitea the initial business challenges:

1. Overwaitea operated six very diverse banners with 110 retail stores; the problem they faced here was in the flyer production for the individual banners. At one stage they were printing flyers where the only difference was the title on the top, as that was all they could manage, this resulted in an inability to engage with their customers in the different regions, and demographics areas.

2. Re work and confusion in the flyer production: Overwaitea produced two different flyers which they named ‘correct’ and ‘on the street’. It took a considerably amount of manpower to ensure the prices were correct, they had checkers, then double checkers , the process was unstructured and required the prices to be transferred from merchandising to pricing systems to marketing.

3. Store Level Merchandising Execution: Overwaitea systems forced them to have fixed price zones, trying to apply local prices meant taking pricing groups from other demographic areas such as urban locations and apply them to small country towns. Changing and creating stores zones for more profitable pricing required the involvement of IT staff, this was not only wasted manpower but ineffective and lengthy process.

4. There was a lack of management and visibility of pricing decisions across the organization

5. Pricing issues – the response to competitor price changes: Overwaitea did competitor price checks in an unstructured manner, and sometimes it was too late for a suitable re-action. The prices were not readily available for the decision making processes, resulting in managers having great difficulty in determining what a competitor’s price actually was. Overwaitea needed access to the competitor prices so that the right decisions could be made at the right time.

6. Manual Forecasting: Overwaitea carried out promotional forecasting manually; in fact it seemed everyone within the company was doing forecasts – all differently. The promotion model within Overwaitea is complicated; they support an extensive loyalty card program, with over 2.4 million loyalty customers; offering points, point redemptions, point programs mixed with price programs. The organization needed a way to systematically work out what the sales were going to be on an item under the promotion model.

7. The inability to price at store level by exception, Overwaitea needed the ability to price at higher levels of the location hierarchy and have the lower levels inherit them automatically.

8. Merchandising and Promotion planning – Overwaitea needed the ability to see more than one week at a time, they needed to see multiple weeks.

9. Producing six different flyers effectively with multiple versions Overwaitea needed the capabilities to move quickly and react swiftly to any changes. Control was needed, but at the same time they wanted the resources and flexibility to make last minute changes if required.

10. Forecasting and Simulation

What did they do?

To resolve the business challenges, Overwaitea looked to the market at retail solution packages, they understood that implementing software products from different companies would cause huge integration problems for the company, they couldn’t contemplate making it happen and considered developing their own in-house system – and then they spoke with Retail Express.

Retail Express was founded with a focus of bringing together promotions planning, media planning, advertising, marketing and pricing into one single product solution. Prior to the development of the software, Retail Express built a working prototype and talked with many retailers within Europe and North America, it was a year into the build when Retail Express approached Overwaitea. In 2005 Overwaitea made the decision to implement Retail Express AMP2 solution integrating the process of their merchandising, pricing, marketing, advertising and operations departments.

The AMP2 Product Solutions

AMP2 does not force you to take a certain path through the different processes; it provides the user with courses and flows, one of which is pricing. There is clearly a need to establish key metrics, key rules and infrastructure to be able to run price rules, run automated pricing; to be able to track properly and effectively what your competitors are doing, and to get that information in a timely way. AMP2 gives the ability to map your competitors’ products to your own and with price, be able to look at the financial implications of a price changes or of applying price rules to a category or the impact of forthcoming cost changes.
Advanced scientific formulas using regression analysis and non linear optimization enables Overwaitea to forecast the results of price changes before they are introduced and to understand exactly what’s going on.

One of the key points of agreement when Barry Grange and Don Gamble first discussed the solution was the concept of bringing together regular price, promotional prices, promotional offers, events and advertising, delivered in one software solution/in one set of elasticity models.

Promotions’ planning gives the ability to establish centralised calendars for campaigns, events, media and then the ability to build from that calendar the offers and events which are going to be active across the business. You can forecast what’s going to happen with ‘what ifs’ around an offer or promotion, advertising brings together the calendars with the media templates and the media vehicles. Through integration with In Design, Merchandizers have the capability to see flyers before they get to the art department. This gave the category managers at Overwaitea the opportunity to view how flyer pages would actually look early on in their planning meetings – and they can see changes and different versions of the flyer minutes after they make a decision, instead of days, giving ample time for collaborative changes to be made.

From Barry Grange’s time at Tesco he understood that the key to success was the ability to conduct accurate and timely forecasting, simulation, category impact analysis and optimisation to support ‘what ifs’ within the merchandising and category management functions.

Implementation and Timelines

Implementation at Overwaitea began in December 2005, and they piloted in July 2006 in ten stores. The pilot was a great success and Overwaitea were confident to proceeded, over the following three months they replaced the legacy systems with no issues. The implementation was seamless and Don Gamble stated that his business users were confident and aggressively telling him to move faster.