Value Chain Strategyin a VUCA worldRichard KocherspergerSummer 2013VolatileUncertainComplexAmbiguous
Industry Gurus26/14/2013
Tell Me and I ForgetTeach Me and I RememberInvolve me and I LearnBen Franklin36/14/2013
Previous Presentations• 2013: The Consumer will change yourbusiness whether you like it or not!• 2012: Speed: The Consumer...
Goals/Objectives• Who‟s Driving the Bus (food industry)?• Economic Impact of a leaderless nation.• Food Industry Perspecti...
Consumers are becoming more demanding andretail/foodservice operations face tougher questions.CONSUMERIncreasingly fast-pa...
6/14/2013 7
The Consumer Drivesthe Food Supply Chain86/14/2013
Customer‟s Perspective•Anytime: 24/7/365•Any Place: Format•Anywhere: geography•My Way!96/14/2013
The “Have” and “Have Not‟s”$0$20,000$40,000$60,000$80,000$100,000$120,000$140,0001970 1975 1980 1985 1990 1995 2000 2005 2...
U. S. Demographics116/14/2013
12U. S. Demographics6/14/2013
Who Are My Consumers?Generation Age Millions ofPeopleMillennials (Generation Y) 18 - 24 71Generation X (Busters) 25 - 35 4...
Generational Evolution146/14/2013
Speed of Adoption156/14/2013
Observations about the Consumer• Consumer behavior is changing fasterthan our abilities to change the FCPGsupply chain (OM...
5 W’s• Who?• What?• Where?• When?• Why?As consumers we are diverse inthought, purchase behaviors, andthe use of technology...
Thought for Today6/14/2013 18
Reality CheckAmerican Employment???• Available Workforce: 155 million• Unemployed/underemployed: 29.7 million• Real Rate: ...
Reality Check206/14/201390 million don‟t work23 million claim disability48 million on SNAP
Job Opportunities6/14/2013 21
Reality Check• 1 in 6 Americans; 1/10Canadians arechallenged to feedthemselves• 2 Billion peopleworldwide do not haveenoug...
4 Biggest Economic Factors• Payroll tax increases: The expiration of payrolltax cuts on January 1 hit lower- and middle-in...
Future FCPG IndustrySupply Value ChainCommand CenterControl TowerRoles can notbe definedRetailersGoogleMicrosoftAmazonThe ...
Thought for Today“Insanity is doing the samething, over and over again, butexpecting different results.”― Albert Einstein2...
10 Food Companies Dominate266/14/2013
27Food Retail Industry Graveyard6/14/2013
Food Retail Industry Graveyard286/14/2013
Food Industry E R296/14/2013
Food Industry E R306/14/2013
Consumer Reports 2012• 33% changed primarystore• 43% looking for lowerprices• 25% poor selection, longlines• 17% employee ...
Food Retail Winners326/14/2013
6/14/2013 33Food Retail Winners
Rise of the Ethnic Focused Retailer346/14/2013
Foodservice Industry Winners356/14/2013
Same Store Sales% Change from last yearMay -2.09%April -5.15%March +2.53%February -0.67%January +1.67%December - -0.94%Nov...
2013 Retail Market ShareNumber ofStoresDollar Share Annual MillionsTraditional Grocery 40,333 42.9% $480,138Total C Stores...
Foodservice Performance6/14/2013 38
Key Developments• McDonald’s Seen Overhauling U.S. Menu From 145Choices• Kroger Powers DC with Food Waste• Six Food Recall...
Retail Developments• Supervalu returns to its roots• C&S supplies Winn Dixie• Target opens in Canada• KROGER Turkey Hill s...
Retail Developments• WAWA goes to Florida: 100 stores• America runs on Dunkin‟• Deep Discount Stores (Family Dollar, Dolla...
AvailableKrogerAholdPublixCerebus6/14/2013 42
New Discount Formats6/14/2013 43
6/14/2013 44
New Fresh Formats6/14/2013 45
46Farmers Markets2013: 8,000+6/14/2013
Tops: Orchard Fresh6/14/2013 47
6/14/2013 48
Deep Discount Stores6/14/2013 49
Dollar Stores506/14/2013
Global BattleCompany Banner Sales,2011 (USD bn)5-year CAGR,2006-20111 Walmart 483.1 +5.62 Carrefour 150.4 +4.13 Tesco 116....
McDonald’s and Yum! Brands will extend their leadership through penetration ofinternational markets and adapting to local ...
US Food6/14/2013 53
US Food6/14/2013 54
55Gordon Food Service6/14/2013
Bricks-NA• WINCO FOODS plans new DC in Phoenix• ALDI NORD Trader Joe’s to build DC inPennsylvania• ALDI NORDS Trader Joes ...
Bricks• SCHWARZ GROUP Lidl builds new DC inFrance• TESCO One Stop DC for northern England• CPALL to expand distribution ne...
Pick Up Sites: Peapod• Chevy Chase, Columbia, Clarksville, MD• Amazon partnerships: Rite Aid, Staples, 7-11• Walmart: a re...
Clicks• MARKS & SPENCER opens new multi-channel DC• AMAZON to open Czech Republic DC• WAKEFERN introduces online case orde...
Social Media• Facebook buys Instagram• Google purchases Wildfire• Salesforce buys Buddy media• Yahoo purchases Tumbler• Or...
Thought for Today“A mind is like a parachute.It doesn’t work if it is not open.”~ Frank Zappa6/14/2013 62
Battle of Value Chains6/14/2013 63
6/14/2013 64
6/14/2013 65
6/14/2013 66
6/14/2013 67
6/14/2013 68
6/14/2013 69
6/14/2013 70
6/14/2013 71
6/14/2013 72
6/14/2013 73
January2012January2013IncreaseGrocery items 13,869 31,700 128%Sold/Fulfilled by Amazon 8,238 10,174 +1,936January2012Janua...
% of Total Category Sales Online756/14/2013
Amazon Lockers6/14/2013 76Staples7-11Rite Aid
6/14/2013 77
6/14/2013 78
6/14/2013 79
6/14/2013 80
6/14/2013 81
6/14/2013 82
6/14/2013 83
6/14/2013 84
6/14/2013 85
6/14/2013 86
Amazon Performance2010 2011 2012 2013Sales 34.2B 48.1B 61.1BInventoryTurns11 10 9AccountsPayable72 74 75Cash Flow 3.5B 3.9...
• Walmart serves customers more than 245million times per week at more than 10,857retail units in 27 countries• WalMart em...
Wal-Mart Financials896/14/2013
Wal*mart Formats6/14/2013 90
Source: A.C. Nielsen Channel Service Over 75% of Walmart Supercenter volume is being captured fromretailers in other majo...
9269 different bannersthrough out the World6/14/2013
936/14/2013
WalMart GrowthFormat 2013 2014Large Format >60,000 sq.ft. 125 125Medium/Small<60,000 sq.ft. 90-100 90-100Sam‟s Club 12 15T...
Walmart Innovations• Experimenting with grocery home delivery– San Jose, San Francisco, Chicago.• Introduced „Goodies‟– Su...
Walgreens966/14/2013
Walgreens976/14/2013
Walgreens986/14/2013
Walgreens996/14/2013
100When thereIs no vision,the people perish!6/14/2013
Evolving Marketplace1016/14/2013
Social Media1026/14/2013
Mobile Ecommerce103Social media marketing is going to blow the shinglesoff the roof once people really figure out how to u...
Online grocery shopping is most prevalent among shoppers in the Asia region. Growth is beingspurred by retailers embracing...
On Line Food Sales1056/14/2013FMI: 11%
Advertising Expenditures6/14/2013 106
Smart Phone Users Reach for Phone150 X/Day6/14/2013 107
The Move to Wearables6/14/2013 108
Technology Cycles6/14/2013 109
Drivables6/14/2013 110
Flyables6/14/2013 111
Scanables6/14/2013 112
Ecommerce $$6/14/2013 113
World’s Largest E-Commerce Co1146/14/2013
Same Day Delivery6/14/2013 115
Closing ThoughtExcellence is not a skill.It is an attitude.~Ralph Marston1166/14/2013
Complexity6/14/2013 117
Strategy6/14/2013 118
Value Chain Initiatives• 1. Develop an Omni Channel Strategy:– Pick from a DC; Direct to Consumer– Pick from a DDC; Direct...
• 2. Take fingerprints off the “box”• Remove the number of touches in the valuechain– Collaboration– Flow Through– Cross D...
DC: Automation121Take Fingerprintsoff the Box!6/14/2013
• 3. Effectively manage transportation services– Professional traffic team to control all purchase orders.– Audit team to ...
Urbanization• Traffic• Smaller Stores/Trucks• Road Restrictions• Parking• Noise Levels• No Docks• Security• Congestion1236...
• 4. Invest in Technology: Goal is to gopaperless; immediate response time– Internet of things:• Wearables• Scannables• Fl...
Satellite Communications125V to V: Cars, Trucks,Airplanes, Trains6/14/2013
Technology• Outside IN: Respond tothe market– Social Media– Industry Resources– Trend Watching– Utilize the DigitalNatives...
Technology Tools• Brands go online direct to consumer• On-line food shopping continues to growsignificantly• An explosion ...
• What value does your company? Your team?bring to the– Consumer?– Customers?– Neighborhood?– Industry?• If your contribut...
Closing Thought• It‟s not the strongest companiesthat survive,nor the most intelligent,but the ones most responsive to cha...
Global GDP6/14/2013 130
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Value Chain Strategy in a VUCA World

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what food distributors need to do to survive in a speed warp environment

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  • Key Channel Trend from the last five years. I have used Discount which reflects the CAGR growth on the last page (though you do not have to base your decision solely on CAGR if there is something more interesting to say about another channel)
  • Value Chain Strategy in a VUCA World

    1. 1. Value Chain Strategyin a VUCA worldRichard KocherspergerSummer 2013VolatileUncertainComplexAmbiguous
    2. 2. Industry Gurus26/14/2013
    3. 3. Tell Me and I ForgetTeach Me and I RememberInvolve me and I LearnBen Franklin36/14/2013
    4. 4. Previous Presentations• 2013: The Consumer will change yourbusiness whether you like it or not!• 2012: Speed: The Consumer is ChangingFaster than the Food Industry can change!• 2011: Seek to stay out in front and don‟t lookback!• 2010: The World is Changing Faster than youare!6/14/2013 4
    5. 5. Goals/Objectives• Who‟s Driving the Bus (food industry)?• Economic Impact of a leaderless nation.• Food Industry Perspective– Winners and Losers– New Developments• A review of Key Players/Concepts• Strategy: Key Issues and Opportunities56/14/2013
    6. 6. Consumers are becoming more demanding andretail/foodservice operations face tougher questions.CONSUMERIncreasingly fast-paced lifestylesTech-savvyAgeing population Single householdsUncertaintyover economyMARKETLegislationSaturation UrbanisationRising commoditypricesRise ofe-commerceI wantvalueI wantthatNOWI wantconvenienceI wantqualityWhere doesmy foodcome from?Can onlinework alongsideour outlets?How can we copewith rising costs?How will we copewith restrictivelegislation around„unhealthy‟ food?Whattechnologywill workbest?How can ourmenus/productsbest reflectethnic andethical trends?
    7. 7. 6/14/2013 7
    8. 8. The Consumer Drivesthe Food Supply Chain86/14/2013
    9. 9. Customer‟s Perspective•Anytime: 24/7/365•Any Place: Format•Anywhere: geography•My Way!96/14/2013
    10. 10. The “Have” and “Have Not‟s”$0$20,000$40,000$60,000$80,000$100,000$120,000$140,0001970 1975 1980 1985 1990 1995 2000 2005 2010Bottom 20% Top 20%106/14/2013
    11. 11. U. S. Demographics116/14/2013
    12. 12. 12U. S. Demographics6/14/2013
    13. 13. Who Are My Consumers?Generation Age Millions ofPeopleMillennials (Generation Y) 18 - 24 71Generation X (Busters) 25 - 35 41Younger Boomers 35 - 50 48Mature Boomers 50 - 65 40Depression / WWII 67 - 80 35G.I. - Pre 1928 Over 80 26Generation Alpha (google kids) under 6 ???Generation Z (digital natives 6 - 18 35136/14/2013
    14. 14. Generational Evolution146/14/2013
    15. 15. Speed of Adoption156/14/2013
    16. 16. Observations about the Consumer• Consumer behavior is changing fasterthan our abilities to change the FCPGsupply chain (OMNI-Channel) !!• Demographics don’t work!!!– 5 W’s: Who, What Where, When, Why?• Different drivers affect decision making166/14/2013
    17. 17. 5 W’s• Who?• What?• Where?• When?• Why?As consumers we are diverse inthought, purchase behaviors, andthe use of technology. We areindividuals.The successful marketerunderstands the weaknesses of„labeling‟ people; therefore, theykeep a record ofpurchases, responses topromotions, emails, feedback etcto build „customized‟ shoppingsuggestions.IE., Amazon176/14/2013
    18. 18. Thought for Today6/14/2013 18
    19. 19. Reality CheckAmerican Employment???• Available Workforce: 155 million• Unemployed/underemployed: 29.7 million• Real Rate: 19%• Rutgers Study: 2006-2011– 27% of the graduating students have full time jobs– 33% are unemployed• The median family income dropped 39% since2007197.76/14/2013
    20. 20. Reality Check206/14/201390 million don‟t work23 million claim disability48 million on SNAP
    21. 21. Job Opportunities6/14/2013 21
    22. 22. Reality Check• 1 in 6 Americans; 1/10Canadians arechallenged to feedthemselves• 2 Billion peopleworldwide do not haveenough food to eat!• 40% of global foodresources are wasted– Not harvested– Spoils– Thrown away226/14/2013
    23. 23. 4 Biggest Economic Factors• Payroll tax increases: The expiration of payrolltax cuts on January 1 hit lower- and middle-incomeconsumers especially hard.• Housing recovery is not real: Many of thepurchases are speculators: Investment Groups• Healthcare: Rising premiums will continue tofunnel consumer spending to healthcare rather than tofood & retail consumption• Energy Costs: Significantly impacts consumerbudgets6/14/2013 23
    24. 24. Future FCPG IndustrySupply Value ChainCommand CenterControl TowerRoles can notbe definedRetailersGoogleMicrosoftAmazonThe ConsumerDistributorsThird PartyAlliances,PartnersManufacturingNetworkRegional, global plantsBulk, Semi-finished,Filling Finishing,SuppliersInformation InformationInformationInformationInformation246/14/2013
    25. 25. Thought for Today“Insanity is doing the samething, over and over again, butexpecting different results.”― Albert Einstein256/14/2013
    26. 26. 10 Food Companies Dominate266/14/2013
    27. 27. 27Food Retail Industry Graveyard6/14/2013
    28. 28. Food Retail Industry Graveyard286/14/2013
    29. 29. Food Industry E R296/14/2013
    30. 30. Food Industry E R306/14/2013
    31. 31. Consumer Reports 2012• 33% changed primarystore• 43% looking for lowerprices• 25% poor selection, longlines• 17% employee rudeness• Not enough checkouts• Wegmans 88• Trader Joe‟s 86• Publix 85• Fareway 84• Costco 83• Harris Teeter 83• Raley‟s 82• Hy Vee 82• Stater Bros 81• Winco 81• Whole Foods 81316/14/2013
    32. 32. Food Retail Winners326/14/2013
    33. 33. 6/14/2013 33Food Retail Winners
    34. 34. Rise of the Ethnic Focused Retailer346/14/2013
    35. 35. Foodservice Industry Winners356/14/2013
    36. 36. Same Store Sales% Change from last yearMay -2.09%April -5.15%March +2.53%February -0.67%January +1.67%December - -0.94%November -0.26%October +0.58%September -0.88%August -0.81%July +0.85%June -2.01%May +1.17%April +1.84%6/14/2013 36Inflation Rate: 1+% At Home2.3% Away
    37. 37. 2013 Retail Market ShareNumber ofStoresDollar Share Annual MillionsTraditional Grocery 40,333 42.9% $480,138Total C Stores 152,513 15.6% $158,546Total Non TraditionalGrocery54,325 39.1% $387,529Dollar Stores 23,418 2.4% $21,492Total All Formats 247,081 100% $1,026,215Future of Food Retailing, 2012 Willard Bishop376/14/2013
    38. 38. Foodservice Performance6/14/2013 38
    39. 39. Key Developments• McDonald’s Seen Overhauling U.S. Menu From 145Choices• Kroger Powers DC with Food Waste• Six Food Recalls a Day in the U.S. and Counting• Whole Foods Mulls Larger Stores, Acquisitions• Bright Farms to Build Greenhouse in DC FoodDesert• Loblaw Rolls Out Digital Loyalty Program• Fresh and Easy TBD• Walgreen’s Energy Free Store6/14/2013 39
    40. 40. Retail Developments• Supervalu returns to its roots• C&S supplies Winn Dixie• Target opens in Canada• KROGER Turkey Hill signs distribution deal withCORE-MARK• TARGET and other US Retailers test Google same-daydelivery• 7-Eleven Owner to More Than Double North AmericaStores• Costco to open 150 more warehouses• Sweet Bay/Harvey’s goes to Bi Lo• Wal-Mart Neighborhood Market to expand6/14/2013 40
    41. 41. Retail Developments• WAWA goes to Florida: 100 stores• America runs on Dunkin‟• Deep Discount Stores (Family Dollar, DollarGeneral: 500 stores+6/14/2013 41
    42. 42. AvailableKrogerAholdPublixCerebus6/14/2013 42
    43. 43. New Discount Formats6/14/2013 43
    44. 44. 6/14/2013 44
    45. 45. New Fresh Formats6/14/2013 45
    46. 46. 46Farmers Markets2013: 8,000+6/14/2013
    47. 47. Tops: Orchard Fresh6/14/2013 47
    48. 48. 6/14/2013 48
    49. 49. Deep Discount Stores6/14/2013 49
    50. 50. Dollar Stores506/14/2013
    51. 51. Global BattleCompany Banner Sales,2011 (USD bn)5-year CAGR,2006-20111 Walmart 483.1 +5.62 Carrefour 150.4 +4.13 Tesco 116.3 +6.04 AEON 107.7 +12.85 Metro Group 106.3 +4.06 Seven & I 98.8 +9.67 Schwarz Group 97.5 +10.98 Kroger 93.7 +6.39 Costco 93.5 +7.410 Casino 86.3 +10.1Company Banner Sales,2017f (USD bn)5-year CAGR,2012-2017f1 Walmart 637.7 +4.82 Amazon 199.4 +24.83 Carrefour 169.6 +4.84 AEON 158.6 +5.95 Tesco 156.9 +5.26 Costco 151.7 +7.87 Seven & I 140.2 +5.88 Schwarz Group 130.1 +6.49 Metro Group 118.5 +3.610 Auchan 113.3 +6.76/14/2013 51
    52. 52. McDonald’s and Yum! Brands will extend their leadership through penetration ofinternational markets and adapting to local consumer behaviour.US chains dominate, holdingall spots in the top 10.020,00040,00060,00080,000100,000120,000McDonaldsYum! BrandsBurger King Subway Starbucks Wendys Dunkin Brands Darden DineEquityDominos PizzaRetailBannerSales(USDmn)Total Banner Sales 2011-201620112016McDonald’s will remain themarket leader, as it continues toenhance its brand image and adaptproduct ranges to local tastes.Burger King is currently playingcatch-up after suffering duringthe downturn, but is forecast todrop to fifth by 2016.Dunkin’ Brands is set to move upto sixth by 2016 with the Dunkin‟Donuts banner focusing onexpansion in Europe and Baskin-Robbins concentrating on the US.Domino’s Pizza will retain itsposition through internationalgrowth and e-commerce drives.Source: Planet Retail
    53. 53. US Food6/14/2013 53
    54. 54. US Food6/14/2013 54
    55. 55. 55Gordon Food Service6/14/2013
    56. 56. Bricks-NA• WINCO FOODS plans new DC in Phoenix• ALDI NORD Trader Joe’s to build DC inPennsylvania• ALDI NORDS Trader Joes chooses TexanDC site• ALDI SÜD to start work on south FloridaDC soon• Grocers Supply to build in Dallas6/14/2013 57
    57. 57. Bricks• SCHWARZ GROUP Lidl builds new DC inFrance• TESCO One Stop DC for northern England• CPALL to expand distribution network• MERCADONA equips new DC with Witronautomation• CARREFOUR plans new DC near Marseille• DIA to open new warehouse in Argentina• DELHAIZE GROUP begins construction ofSerbian DC6/14/2013 58
    58. 58. Pick Up Sites: Peapod• Chevy Chase, Columbia, Clarksville, MD• Amazon partnerships: Rite Aid, Staples, 7-11• Walmart: a retail store.• Europe: click and pick common at store level6/14/2013 59
    59. 59. Clicks• MARKS & SPENCER opens new multi-channel DC• AMAZON to open Czech Republic DC• WAKEFERN introduces online case ordering• SEARS offers fulfilment service for otherretailers• TESCO plans new dotcom warehouse inDidcot• Peapod building new DC in North Jersey• Fresh Direct new DC in the Bronx6/14/2013 60
    60. 60. Social Media• Facebook buys Instagram• Google purchases Wildfire• Salesforce buys Buddy media• Yahoo purchases Tumbler• Oracle buys Involver and Virtue• Over $3 billion was spent to access socialmedia.6/14/2013 61
    61. 61. Thought for Today“A mind is like a parachute.It doesn’t work if it is not open.”~ Frank Zappa6/14/2013 62
    62. 62. Battle of Value Chains6/14/2013 63
    63. 63. 6/14/2013 64
    64. 64. 6/14/2013 65
    65. 65. 6/14/2013 66
    66. 66. 6/14/2013 67
    67. 67. 6/14/2013 68
    68. 68. 6/14/2013 69
    69. 69. 6/14/2013 70
    70. 70. 6/14/2013 71
    71. 71. 6/14/2013 72
    72. 72. 6/14/2013 73
    73. 73. January2012January2013IncreaseGrocery items 13,869 31,700 128%Sold/Fulfilled by Amazon 8,238 10,174 +1,936January2012January2013IncreaseGrocery items 155,000 229,000 48%Sold/Fulfilled by Amazon 17,925 39,000 +21,075#1 „Earth‟s Biggest Selection‟January2012January2013IncreaseGrocery items 620,000 1,703,527 174%Sold/Fulfilled by Amazon 169 75,000 +74,831Amazon’s Grocery category expansion:Source: Planet Retail
    74. 74. % of Total Category Sales Online756/14/2013
    75. 75. Amazon Lockers6/14/2013 76Staples7-11Rite Aid
    76. 76. 6/14/2013 77
    77. 77. 6/14/2013 78
    78. 78. 6/14/2013 79
    79. 79. 6/14/2013 80
    80. 80. 6/14/2013 81
    81. 81. 6/14/2013 82
    82. 82. 6/14/2013 83
    83. 83. 6/14/2013 84
    84. 84. 6/14/2013 85
    85. 85. 6/14/2013 86
    86. 86. Amazon Performance2010 2011 2012 2013Sales 34.2B 48.1B 61.1BInventoryTurns11 10 9AccountsPayable72 74 75Cash Flow 3.5B 3.9B 4.2BCap Ex 979M 1.9B 3.8BShippingRevenue3.5% 3.2% 3.7%Outbound <7.5%> <8.3%> <8.4%>Fulfillment <8.5%> <9.5%> <10.5%>GrossMargin22.3% 22.4% 24.8%6/14/2013 87
    87. 87. • Walmart serves customers more than 245million times per week at more than 10,857retail units in 27 countries• WalMart employs 2.2 million associatesglobally, including almost 1.4 million in theUnited States.• Walmart is one of the largest private employersin the U.S., the largest in Mexico and one ofthe largest in Canada as well.886/14/2013
    88. 88. Wal-Mart Financials896/14/2013
    89. 89. Wal*mart Formats6/14/2013 90
    90. 90. Source: A.C. Nielsen Channel Service Over 75% of Walmart Supercenter volume is being captured fromretailers in other major channels.Each new Walmart Supercenteraverages $1.7million in sales perweek (roughly $900,000 insupermarket item volume).If Walmart takes 5% to 7% of the$750 billion grocery industry in2013, Walmart will add $35 - $50billionSupercenterSource of Volume33%AllOther32%GroceryChains22%WalmartDiscountStores13%OtherMass6/14/2013 91
    91. 91. 9269 different bannersthrough out the World6/14/2013
    92. 92. 936/14/2013
    93. 93. WalMart GrowthFormat 2013 2014Large Format >60,000 sq.ft. 125 125Medium/Small<60,000 sq.ft. 90-100 90-100Sam‟s Club 12 15Total 237 240946/14/2013
    94. 94. Walmart Innovations• Experimenting with grocery home delivery– San Jose, San Francisco, Chicago.• Introduced „Goodies‟– Subscription service for new products not carried ininventory• Offering „same-day‟ deliveries via internet• Offering click and pick with in-store lockers• Partnership with American Express Cards• Offering Scan and go via smartphone956/14/2013
    95. 95. Walgreens966/14/2013
    96. 96. Walgreens976/14/2013
    97. 97. Walgreens986/14/2013
    98. 98. Walgreens996/14/2013
    99. 99. 100When thereIs no vision,the people perish!6/14/2013
    100. 100. Evolving Marketplace1016/14/2013
    101. 101. Social Media1026/14/2013
    102. 102. Mobile Ecommerce103Social media marketing is going to blow the shinglesoff the roof once people really figure out how to use itMegan O’Connor, Levi Strauss6/14/2013
    103. 103. Online grocery shopping is most prevalent among shoppers in the Asia region. Growth is beingspurred by retailers embracing e-commerce as young, affluent, tech-savvy consumers opt to shopvia the channel.10%7%7%27%10%8%33%31%11%13%Proportion of web shoppers whohave made grocery purchases online.Source: Planet Retail’s Online Shopper Survey data.
    104. 104. On Line Food Sales1056/14/2013FMI: 11%
    105. 105. Advertising Expenditures6/14/2013 106
    106. 106. Smart Phone Users Reach for Phone150 X/Day6/14/2013 107
    107. 107. The Move to Wearables6/14/2013 108
    108. 108. Technology Cycles6/14/2013 109
    109. 109. Drivables6/14/2013 110
    110. 110. Flyables6/14/2013 111
    111. 111. Scanables6/14/2013 112
    112. 112. Ecommerce $$6/14/2013 113
    113. 113. World’s Largest E-Commerce Co1146/14/2013
    114. 114. Same Day Delivery6/14/2013 115
    115. 115. Closing ThoughtExcellence is not a skill.It is an attitude.~Ralph Marston1166/14/2013
    116. 116. Complexity6/14/2013 117
    117. 117. Strategy6/14/2013 118
    118. 118. Value Chain Initiatives• 1. Develop an Omni Channel Strategy:– Pick from a DC; Direct to Consumer– Pick from a DDC; Direct to Consumer– Pick from a DC; Pick up at the store– Pick from a DC; Pick up via a locker– Pick from retail store; direct to consumer– Pick from retail store; pick up at the store6/14/2013 119
    119. 119. • 2. Take fingerprints off the “box”• Remove the number of touches in the valuechain– Collaboration– Flow Through– Cross Dock– Reduce back door receiving6/14/2013 120Value Chain Initiatives
    120. 120. DC: Automation121Take Fingerprintsoff the Box!6/14/2013
    121. 121. • 3. Effectively manage transportation services– Professional traffic team to control all purchase orders.– Audit team to review freight bills.– Move to intermodal where appropriate– Review energy resources: Natural Gas, Electric– Hedge your energy commitment– Black box/satellite connections with all assets– Balance the work load : Offer incentives for „slowdays6/14/2013 122Value Chain Initiatives
    122. 122. Urbanization• Traffic• Smaller Stores/Trucks• Road Restrictions• Parking• Noise Levels• No Docks• Security• Congestion1236/14/2013
    123. 123. • 4. Invest in Technology: Goal is to gopaperless; immediate response time– Internet of things:• Wearables• Scannables• Flyables– Traceability of products, support equipment,people.– Big Data: capture; analyze; manage– Cloud: SaaS6/14/2013 124Value Chain Initiatives
    124. 124. Satellite Communications125V to V: Cars, Trucks,Airplanes, Trains6/14/2013
    125. 125. Technology• Outside IN: Respond tothe market– Social Media– Industry Resources– Trend Watching– Utilize the DigitalNatives• Demand Shaping• Customer RelationshipMarketing (CRM)6/14/2013 126
    126. 126. Technology Tools• Brands go online direct to consumer• On-line food shopping continues to growsignificantly• An explosion of mobile shopping/scanningapps• Digital dialogue widens/expands• Front end checkouts are eliminated6/14/2013 127
    127. 127. • What value does your company? Your team?bring to the– Consumer?– Customers?– Neighborhood?– Industry?• If your contribution is strictly moving product,your role will be diminished and/or eliminated!6/14/2013 128Value Chain Initiatives
    128. 128. Closing Thought• It‟s not the strongest companiesthat survive,nor the most intelligent,but the ones most responsive to change!1296/14/2013
    129. 129. Global GDP6/14/2013 130

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