Modern formats for trading food and industrial goods.

What is the format?
Let's give a definition: what is the format?.

TRADE FORMAT: a set of parameters by which the belonging of a trading enterprise (both chain and independent) to one of the types common in world practice is determined.

As a rule, each of the formats has an established name

In practice, it is enough to evaluate an enterprise according to a small number of parameters, omitting the secondary ones and those that are formed under the influence of local conditions. This:

Sales area
* Number of cash registers
* Area of ​​warehouse, auxiliary, office premises
Product categories present in the assortment, assortment width
Number of positions in categories, depth of assortment
* The share of goods produced specifically for a given enterprise ("seller's brand")
* Availability of own production of products (for the food sector)
Form of service (for self-service establishments, the share of traditional trade “over the counter” is also assessed separately)
Service provided
* Opening hours
Number of personnel
Turnover per day, month, year
*Turnover per unit area
Average number of purchases per day
* Price level for basic assortment items

The “*” sign indicates parameters, the use of which helps to clarify whether an enterprise belongs to a particular format.

The format is primarily focused on the buyer, so the list does not include, for example, such an important indicator for a business owner as to whether the store is a chain store or an independent one. At the same time, some of the formats can successfully exist only in the online version, after reaching a “critical mass” of retail space.

Manufactured goods and products

Of course, there are also enterprises that cannot be classified, that is, attributed to one of the known formats or its varieties. This:

Stores that do not have their own strategy (market outsiders). This group includes a large number of post-Soviet stores, as well as many (including large) enterprises created in the 90s without taking into account the need to withstand today's intense competition);

Concept stores with a unique offer to the buyer in terms of assortment and service (signature stores, not to be confused with boutiques).

Thus, in 99.9% of cases, for the success of a trading enterprise, it is necessary to comply with one of the formats that has proven itself in world practice

Food formats.

Let us briefly describe the formats of food trade.

Basic parameters of food trade enterprises

Manufactured goods and products

Necessary comments to the table.

1. If we leave aside the specifics of the hypermarket (presentation of the non-food group, that is, household appliances, clothing, toys, school and writing supplies), then we can say that the width of the assortment of the formats listed in the table applies to all food categories and the so-called “related goods". Therefore, in the table below, the line “Product categories presented” is missing. The differences lie only in the depth of presentation of each category. If a hypermarket offers up to 1,500 items in one category, then a hard discount offers, at best, about 80.

2. Since we are talking about self-service, we note that in the first three formats, a significant amount of space is occupied by areas allocated for service with the seller, that is, the buyer does not have direct access to the product. However, this is not important for such organized trade, since from behind the counter the buyer receives packaged and labeled goods, which he then pays for at the checkout along with others at the exit.

The table clearly shows that self-service allows you to achieve turnover that is fundamentally inaccessible to traditional stores of the same area. However, in order to get this turnover, it is not enough to build a large store and fill it with goods. A huge role is played by the choice of strategy for winning the buyer, which in turn is described by a large number of parameters. Therefore, an enterprise with 10,000 square meters of area, an assortment of 25,000 items of goods and 40 cash terminals, but with all this giving a turnover in monetary terms of no more than 2 million dollars per year, cannot be called a hypermarket.

Non-food formats.

Let's move on to the non-food retail market. In post-Soviet territories, self-service in this segment is very poorly developed. These are mainly enterprises selling a relatively narrow range of clothing and footwear, and at fairly high prices. Thus, if you look at the table, we only have one block involved so far!

Someone may object to me: but when selling, for example, consumer electronics, the buyer also has the opportunity to freely approach the product and try out a TV or video camera. Yes, this is true, but you cannot mix the concepts of a showroom and a self-service store itself. Having selected a product, you will have to contact a sales consultant, he will determine the availability of the product in the warehouse, issue an invoice, and initiate delivery of the product to the point of issue. Then the buyer must deposit money into the cash register, and only after that the purchase can be received.

With such a scheme, a significant amount of warehouse space is required, personnel are irrationally loaded, and so on. That is why the most progressive Russian networks of “electronic supermarkets” (for example, “M-Video”) plan to switch to a truly modern scheme already this year, in which “medium” and “light” weight goods are selected from the shelves, as in a regular food supermarket , and is immediately paid at the cash register. There is still one small obstacle on the path to perfection: in Germany, for example, the warranty document is a cash receipt of the usual form, where the automated accounting system immediately indicates the warranty period using the scanned product code.

Our store is required to fill out a separate warranty card. This difference is primarily due to the fact that in countries with developed market economies the share of “gray” products tends to zero, while in our country it is, according to some estimates, up to 60%. However, according to my information, a solution will be found soon.

Thus, we took a brief tour of the basic points of assessing self-service enterprises for compliance with a particular format, and also examined some of the formats for trading food and industrial goods.

© O. Voitsekhovsky, RussianRetailSolution, June 2002.

INFORMATION ABOUT THE COMPANY:
Trade Help. Trading technologies of Andrey Kalmykov
Year of creation: 1996

Field of activity: creating concepts for grocery and non-grocery stores, assortment management, increasing the efficiency of the main business processes of the store and retail holding, creating an activity system using proven and original methods .

Clients:"Lenta Cash&Carry" (St. Petersburg), "Magnum" (Karaganda), the "Rost" chain (Surgut), "Universal" (Yoshkar-Ola), supermarkets "Raitsen", TH "Korzinka" (department stores "Korzinka", Center family purchase "We"), “Monetka” (Ekateriburg), “Dixie” (Moscow), “Oscar” chain (Kherson), “SEBET” chain (Baku), “Narodny” (Bishkek) and etc.

Owners and directors of grocery stores who are thinking about increasing the profits of their outlet should pay attention to products in the category NonFood. Market analysis shows that in stores with a small retail space, the development of this product category leads to increase sales from turnover to 10% and from income to 15% . For a large retail space, this figure can be up to 40% of turnover and up to 50% of income. In addition, studies show that the increase in household spending on non-food products in 2011 was 700%. I’ll tell you below how and why this happens, and what owners who are planning to develop the category should take into account.

Non-food - increasing customer loyalty

The non-food category, traditionally, is:
- goods for everyday life and housekeeping;
- cosmetics and perfumes;
- sports and travel accessories;
- toys, goods for schoolchildren, stationery. goods;
- books, magazines, postcards;
- textiles, shoes, clothing, etc.
In grocery stores they are also called “related products.”

Buyers have a need for non-food goods for the following objective reasons:
1. This is the majority of goods that every buyer needs at one time or another. If they are on sale, the buyer saves time - he does not need to visit another store.
2. House cleaning is not complete without non-food products.
3. Table setting and food preparation are not complete without non-food kitchen products.
4. Buying clothes and shoes How non-food products improve the mood of women and men.
5. Interior decoration and hygiene procedures require the purchase of textiles, household chemicals, towels, etc.
6. You have to buy socks and stockings several times a month.

The assortment usually changes seasonally or is updated on the eve of holidays.

In large stores, a category manager monitors the updating of the assortment and the search for new products. Currently, in Russia and the CIS countries there are no educational institutions that train specialists in this specialty. I’ll tell you what the responsibilities of a manager are, so that owners of small grocery outlets and large stores can hire a competent person for their staff, or entrust the performance of duties to an experienced employee. This is, first of all:
- formation of an assortment of all product categories;
- planned development of product categories throughout the year;
- managing the relevance of the assortment (rotation, new items, removal of old assortment, sales);
- pricing, budgeting of purchases and sales;
- budget execution management; - management of trading promotions.

Such a specialist must know his product categories, regularly use retail analytics, and know how products are laid out in sections of the store. His working time should be distributed as follows:
50% - current commercial activities;
30% - management of display in stores (regular and promotional display);
20% - industry study, analysis of direct and indirect competitors.

The area of ​​a grocery store for non-food can be any (from a 6 m2 kiosk to a hypermarket with a sales area of ​​10,000 m2). The main thing is to remember what the attention of buyers should be focused on in each specific case: - In retail formats with a small retail area of ​​up to 500 m2, NF attracts best seller, i.e. looking for sales leaders; - from 500 m2 to 10,000 m2, specific non-food product categories (for example, tableware) are developed and trading zones are formed for this product.

Organizing the space:
1. Non-food goods in small areas are placed not at the beginning of the buyer’s journey, but at the end of the buyer’s journey in special areas or separate areas of the store , for example, after drinks. There are so-called promo places in the store - “take off” zones - “take me with you”, and non-food can also be located there (promotional baskets, promotional ends, checkout stands, POS points of sale of product brands). Non-food products can also be located locally throughout the sales area.
2. Non-food goods in large retail areas (1000-10,000 m2) are located at the beginning of the buyer’s path, on the right in a counterclockwise direction. This is due to the fact that customers come to food retail primarily for food - and this is a “regular demand”. By starting our product offering with non-food, we satisfy the “impulse demand” of the buyer.

Redevelopment: necessary or not

If the categories are new or there is an expansion and development of existing product categories, a redevelopment of the sales area is needed. At the same time, you need to think about changing the merchandising: both the display on shelves (planograms) and the cross-merchandising of product groups on retail equipment throughout the sales area.

The location should be chosen by the company's trade technologist or category manager managing the NF group when creating a store layout, or by an experienced consulting company that can do professional cross-merchandising of the sales floor.

Error

Suppliers and sellers of equipment often undertake the implementation of the plan, but they do not take into account the principles of product proximity, determining the number of linear meters for product categories, rules for the direction of customer movement, balancing the sizes of shelving areas and aisles, and much more. other.

Should be avoided

Many business owners are addicted to cheap Chinese goods: they dream of receiving 100% income growth by increasing retail prices doubled.

Usually the result is the opposite - huge amounts of money are “frozen” in the balances in the warehouse. Most entrepreneurs do not know how to competently sell non-food, hence the loss of significant funds when withdrawn from circulation. For example, I personally encountered a situation where a seller purchased 200 liter suitcases for long-distance flights in St. Petersburg. But there are few, much fewer ordinary buyers who travel to remote countries for a long period of time and need such large suitcases than ordinary buyers who live and continue to live within the radius of the store. The result is a warehouse filled with large suitcases. The percentage of domestic and imported producers in the non-food category today is:
- China+Türkiye - 80%.
- CIS - 20%.

Unprofessional product display, lack of understanding of the functionality of non-food retail equipment, lack of understanding of the meaning of POS as a point of sale - its location on the sales floor, leads to the fact that the frequency of visits to non-food zones by customers is 5-10 times lower than food product zones, penetration goods in checks - no more than 0.5-1%. As a result, most non-food areas in Russian retail (especially in the regions) are in a cool (cold) or frozen state.

Adviсe:
- It is advisable to divide the order volume of a non-food batch by 2. Let me explain: in 9 out of 10 cases, retail chain specialists and supplier sales representatives are wishful thinking: they do not have an accurate forecast, but there is “intuition” that lets them down. Everyone hopes for the popularity of certain goods, for which one justification is given: “maybe” we will sell. But removing weakly selling or unselling non-food from the assortment of a retail chain is 5 times more difficult than introducing it!
- You need to monitor new offers, study the industry and your product category: new non-food products appear regularly 10 times a month. Up to 5,000,000 sku of non-food have already been invented, and the figure continues to grow. Goods are improved, they are given new functions and paints, but this deteriorates the quality of goods. Global NF manufacturers are passionate about the “Buy-Throw-Buy” principle and encourage us to buy low-quality NF "cheap" .
- By introducing non-food category goods into the store’s assortment, you can compensate income from sales of products with a low markup, including socially significant ones (bread, milk, etc.) After all, non-food is a carrier of margin, the markup on it can reach 40%.

Low turnover: how to fight

The correct average turnover of all non-food is up to 6 times a year. At the same time, seasonal assortment (for example, Easter cake molds, dyes before Easter) “fly away” quickly exactly in season .

Reduce non-food turnover in two ways:- They study their non-food category and begin to understand it deeply, understand the advantageous properties of non-food products, managing the competent entry of product items into the matrix. Limit the entry of the supplier’s entire assortment to the entry of the best-selling product items. This is possible with clear understanding the peculiarities of the mentality of local residents, their habits and preferences certain brands.
- They sell out unsold non-food stocks quickly, actively and dynamically, without delaying more than the middle of the season. And this is 1.5 months maximum! Promotions for non-food are a standard stage in the sales cycle.

Good luck with your non-food, Ladies and Gentlemen!

Every major FMCG retailer changes its assortment in the non-food category at least four times a year - once every season (winter, spring, summer, autumn). But how does this happen, who decides on the number of products presented in seasonal collections and how is the assortment matrix formed?

Market participants believe that the non-food category (household goods, household goods, sports goods, toys, textiles, shoes, clothing, etc.) has enormous potential, but is now in its infancy in terms of management by retail chains.

“The importance of non-food products for stores of various formats is difficult to underestimate, since they have higher marginal income,” comments Sergei Leonov, partner at Retail Alliance Group. — With increasing competition, when retailers lower prices for food products, non food can compensate for the loss of margin. In addition, non-food products attract shoppers from remote areas to stores, increasing the store penetration area.”

In particular, the expert says, a buyer is unlikely to travel 20-30 minutes by car to a store for yogurt, the price of which is the best in the city. But he can come this way in search of a microwave oven or a lawn mower.

“The range of non-food products can be permanent and available all year round, as well as seasonal. It is the management of seasonal collections that is the most problematic in Russia,” says Sergei Leonov.

Among the shortcomings of modern Russian management of seasonal collections in hypermarkets and supermarkets, experts name an uninteresting, non-unique and unattractive assortment for the buyer, as well as untimely presentation of goods and a high level of availability of illiquid goods.

Such large FMCG market players as X5 Retail Group (Pyaterochka, Perekrestok, Karusel chains) and O'Key form a non-food assortment through their own efforts, relying on their own and custom market research when selecting products, as well as sales results of previous seasons.

As X5 reported, in the retailer’s hypermarkets (from 4,000 sq.m.) non-food products make up about 30% of the total assortment, in supermarkets (1,600 sq.m.) - about 15%. Mainly these are household goods. In O'Key hypermarkets there are 60-66% of non-food products, in supermarkets about 20%. Most of this category in the network is occupied by products for newborns, household chemicals, cosmetics and perfumes.

The federal chain Magnit website reported that non-food products account for 22.6% of the total sales of hypermarkets and 11.5% of the total sales of convenience stores. Other large FMCG chains - Metro Cash & Carry, Auchan and Lente - were unable to promptly provide information on this issue.

In the Molniya retail chain, which is developing a network of 30 super-, hypermarkets and express-format stores, the assortment is also independently selected by category managers based on the document “Regulations on Assortment Policy” adopted by the company. “Customer demand is taken into account when forming all product categories, and not just non-food, which account for about 13,200 SKUs in Molniya hypermarkets,” the website reported. “The entire assortment, regardless of the seasonality of product categories, is reviewed on the basis of a schedule - about 10 times a year.”

X5 says that based on the types of goods and price segments, the company has formed a database of customer needs, which is regularly filled with specific brands and trademarks. The company's main emphasis is on compiling an assortment of spring clothing and shoes, accessories and goods for cars, goods for summer recreation and leisure, vacation and active recreation, summer and school seasons, warm season (heaters and fan heaters), as well as the New Year season.

“Usually, when creating a non-food assortment, several sources of information are used,” comments Sergey Leonov. — This is an analysis of sales of goods from last year’s season and last year’s assortment of the most successful chains. In addition, for each season, the assortment structure for different network formats is formed, the price positioning of the collection by the number of products and trends in demand growth are studied. There are also certain specifics in the selection of different collections. For example, fashion - if you study the models, colors of clothes and shoes, and trends in general, in time, you can increase the turnover significantly.”

Some companies prepare more than 12 collections a year, which differ not only in seasons, but also in other periods. Thus, the bicycle season begins in March and lasts until mid-September, and the heating season, when it is already cold outside and the radiators are not yet heated, lasts less than a month. The time spent on purchasing goods is the same, regardless of its quantity and the format of the store in which it will be sold.

According to experts who create an assortment matrix and manage collections of non-food products in retail chains, the retailer himself can create a collection. To do this, he, among other things, needs to rewrite the assortment of non-food products from specialists, study various exhibitions, analyze his sales and spend at least four years on this effort, time and money. If there is none of this, then it is more logical for the retailer to turn to the purchasing company.

“The volume of purchases from Russian retail chains is unfortunately small due to the underdevelopment of the non-food segment,” says Sergei Leonov. “They will not be able to select collections themselves in Bangladesh, so for now we are the ones solving this problem by accumulating orders from chains and benefiting them from combined purchases.”

Such companies outsource the management of collections and the conclusion of contracts for the supply of goods at low prices, thus forming competitive prices in the market. In addition, they accompany sales at every retail chain that works with them - they offer display standards, billboard and leaflet layouts, control inventory, organize sales in a timely manner, offer exclusive, unique products, etc.

Non-food in a hypermarket: time to change!

Non-food in a hypermarket: time to change!

Hypermarkets as a format appeared in the sixties in France. The pioneer of the new format was Carrefour with an area of ​​2500 sq. m. meters in the suburbs of Paris. At first, the idea of ​​a huge store in the countryside seemed strange, but by the end of the 60s, competing hypermarkets began to appear like mushrooms. During these years, the French gradually acquired personal cars. Retail tycoons - owners of the famous Auchan, Carrefour and L'Eclerc - sensed the changes and began to build large stores outside the city with huge parking lots. Here customers could do one stop shopping - buy everything they needed for a week or two in advance. The hypermarket format has firmly won the hearts of customers for many years. Over time, hypermarkets have changed. From basic in equipment and appearance, they in France by the beginning of the 2000s turned into huge (10,000 square meters) and luxurious stores. Today, with increasing competition and the emergence and development of large specialized chains of construction, gardening and electronics stores, it is becoming increasingly difficult for hypermarket chains to compete with them in price and assortment. And the time has come for another change for hypermarkets.

“In European hypermarket chains, non-food departments are selling poorly and are in real crisis,” says Christiaan Rikkers, managing director of JosdeVries The Retail Company. - Hypermarkets can no longer “embrace the immensity” and compete with category killers. For the most part, buyers come to the hypermarket for food. For non-food goods, such as household appliances, goods for home and garden, and repairs, they go to specialized stores. How do European hypermarket chains react to new market conditions? They are reducing retail space and creating new sub-formats. Over the past year, both leading hypermarket chains Auchan and Carrefour have launched new concepts.”

In April 2011, Auchan-City opened near Lille, a new urban hypermarket with an area of ​​4,000 square meters. meters. The network soberly assessed the needs of customers and decided to satisfy their everyday needs, without frills. Therefore, the range consists of only 25,000 SKUs. The assortment of the non-food department has been seriously revised; here the buyer will find only what he needs. Textiles are represented only by underwear; an expanded range is left in the categories of school supplies and small household appliances. The approach has been changed - the right goods, an emphasis on fresh vegetables and fruits, promotion of local products - more than 1000 items are sold in Auchan-City in the best places - at the ends of the gondolas and the best shelves. We think the concept and design of the store is very fresh and modern - lime colored walls, navy blue graphics, red signage above the departments. A sound concept for an urban hypermarket.

In the fall of 2010, Carrefour launched two Carrefour Planet stores and tested their results for a year. The chain opened stores with an area of ​​6,000 square meters. meters, of which only 2000 sq.m. is given to non-food. meters. The non-food departments themselves are designed more like a department store - brands are represented, a different type of flooring is used, and good, different lighting is used. All this is needed to create a more comfortable and inviting atmosphere. Sales results for the year confirm the downward trend in purchases of non-food goods in hypermarkets. Thus, sales of toys and auto goods fell the most - from 19 to 24%, as well as electronics - 14.7%. Carrefour has tested the concept and, having modified it, will continue to open so-called “baby hypermarket” Planet stores.

Many chains are seriously reconsidering their approach to the non-food department; several new projects are currently being prepared by German hypermarkets. The market leader in Belgium (occupies 23% of the market) Delhaize in 2011, with the help of specialists from JosdeVries The Retail Company, changed the non-food departments in three stores. Today Delhaize offers customers only three groups of non-food products: kitchen accessories, decorative products and media (books, magazines, CDs). A new design was made for the department. It was placed closer to the cash registers to accommodate impulse purchases. Wire shelving was selected, lighting and graphics were changed, photo images were added, and merchandising training was conducted.

The non-food department in a hypermarket today requires special attention. This concerns optimizing the assortment, improving the display and presentation of goods. To sell non-food products, you need to put more effort into seducing the buyer, giving him advice and recommendations using design and graphics, as the Italian chain IPER successfully does. JosdeVries The Retail Company is currently developing a concept for the “hypermarket of the future”, including category management, and will present it at the Montreux Property Show in 2012.

The concept of “non-food products” is broad and multifaceted. And since the nomenclature is heterogeneous, the management of trade in such goods depends on many different nuances determined by the properties and general purpose of each type of goods.

On the one hand, unlike food products, which quickly deteriorate and therefore require increased attention to their expiration dates (since otherwise the trading enterprise will suffer losses), the “lifetime” of non-food assortment is longer and, therefore, does not need such strict control.

On the other hand, in the trade of non-food products, it is important to take into account a large number of different parameters that characterize a particular product. So, for example, if we are talking about clothes and shoes, then these are the sizes, colors, height, fullness, material from which they are made, etc. One of the typical features of the trade in household appliances and electronics is the recording of serial numbers, warranty periods and the issuance of warranty documents. coupons, printing of certificates, etc. A number of goods (in particular, furniture) can be sold either individually or as a set (set). When trading jewelry, it is necessary to take into account not only the quantity, but also, in parallel, the weight and, in addition to this, the dimensions of the products. Working with “living goods” is also specific in its own way, i.e. representatives of the world of animals, fish and plants. In addition, differences in the structure and properties of non-food products entail differences in the technologies for their sale.

We asked the director of the Estar company, Anatoly Evgenievich Reshetnikov, about what you should pay attention to when working with non-food.

- What do you think is the main feature of the non-food business?

The specifics of the business are based on whether the store offers a mono or multi-brand to its customer. All trading preferences are based on this. So, if in more developed cities the client has a fairly large selection of well-known brands, then in Kirov his options are much smaller. We have very few mono-brands, mostly multi-brands. The reason for this situation is that, unfortunately, we do not yet have serious sellers in this market. If, for example, food chains have been formed for a long time, and large owners are building entire supermarkets, then department store stores mainly operate on the principle of “maybe something will sell.” Although there are exceptions here too. Entrepreneurs who begin to cooperate with European manufacturers are forced to meet their ideas about style, image, and quality of service. This will inevitably entail a clearer focus on a particular buyer, changes in the price component, and increased competitiveness.

- Should such a process be accompanied comprehensive re-equipment of commercial enterprises? After all, assortment management influences the decisions used in automation of retail trade enterprises...

The market for private traders is extremely diverse. Therefore, we can talk about comprehensive re-equipment only for those who are well organized, have close contacts with metropolitan supplier networks, conduct regular purchases and have their own development strategy. In the Kirov market, such sellers occupy a share of ten percent, no more.

- But we still have prospects?

Yes, there are opportunities for development. Unlike Europe, in our market of manufactured goods, many aspects are literally in their infancy, and many are simply absent. Having a good resource base and high untapped potential, we have good chances to move forward. Many Russian companies are already moving at an accelerated pace. Moreover, Kirov doesn’t look so bad against their background.

- Give some advice on what needs to be done to develop a non-food business?

It all lies in the ability to sell, and it brings with it a whole range of issues. This includes correct marketing, a well-designed sales strategy, an understanding of who your client is, the ability to feel the visitor, and to serve him politely and professionally. Taking all this into account, you can work and develop your business.

- How can companies like yours influence the development of the non-food market?

Our influence is indirect, since we care about the appearance and image of the trading enterprise, creating an atmosphere that makes the buyer want to visit the store again and again. Thus, with our participation, the seller manages to form a cohort of loyal customers to a particular store or brand, and therefore receive a constant income.

- Should merchants try to create the image of their store, boutique, or supermarket on their own, without involving specialists?

Life has shown that using the work of professionals is much more effective and cheaper than trying to do something yourself. In modern market conditions, it would be too reckless to rely only on one’s own ideas and preferences, while ignoring the experience and skills of others. Competently building a business will inevitably lead to its development, and in this regard, communication with specialists will only bring benefits.