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Shelf Life

In today's competitive market, convenience store operators look to new profit centers, new products and updated offerings to stay profitable, and many are trying hard to get their gasoline customers from the pump and into the store.

What happens when the all-important mission is accomplished, and the customer is successfully drawn into the store, but target items are out-of-stock? It often results in lost opportunities, and lost sales.

"Staying in-stock equals an increase in sales, and that is why we are all in this business," said Wayne Wills, merchandising director at Certified Oil Co., a 65-store chain based in Columbus, Ohio, which also operates 42 gas stations.

The importance of keeping the shelves full — and full of the right products, in their right location — has led many operators to seek the right tools. With the help of both manufacturers and distributors, the results seem well worth the effort.

Picture Perfect

Retailers often rely on employees to keep the shelves stocked with the right products, but it's easy to make mistakes. "Typically if something is out of stock, employees try to plug the hole with another item, and if you are out of an item, it is usually one of your best sellers, so you want to make sure you restock it," said Wills. "The key is to make sure employees are stocking by the planogram and not by ownership. If they happen to over-order on something, they will often plug in with that item, and you can lose sales."

To solve the out-of-stock problem often found in c-stores, some retailers, including Circle K and Certified Oil, turned to Gladson Interactive's 4-foot permanent strips. Certified Oil is currently rolling them out in the candy and gum section as well as the automotive and cookie sections. Each strip features the SKU and description for each item, along with its picture, to ensure its correct placement in the planogram.

"Before, we used regular shelf labels and originally had plastic chips that would slip around or get moved by people," explained Wills. "The strips will save us a lot of time stocking the shelves because they have pictures to make sure the product is in the right location."

Wrigley is maintaining the planogram for the gum and candy section, and Eby-Brown is taking care of the sweets and cookie section. To create the strips based on the established planogram, Wrigley or Eby-Brown enters the information into an Apollo planogram program, which is sent to Gladson, according to Wills. Gladson creates the strips and sends them to Certified to verify.

"We do the planogram based on category management principles and get our customer to approve it," said Chuck Fetty, customer business manager on the national accounts team at Wrigley Confections. "Then we send it to Gladson, which has a database of over 600 items, and they print out the strips with a picture, a UPC scan code and the code of the wholesalers (UIN number). Also, the striping is printed in a color to match each company — for example, Circle K is red."

By keeping items in stock, both retailers and manufacturers benefit from satisfied customers and increased sales, according to Fetty. "It benefits us both because the retailer wants the best-selling SKUs in the store, and by maintaining the planogram and recognizing out-of-stocks, when something sells out, they can reorder," he explained. "Without the strips they may not notice something is missing, and whatever they have the most stock of may end up in that spot. Then retailers can be missing sales on their best sellers."

Additionally, the strips guarantee the planogram integrity, noted Fetty. The pre-printed strip and picture ease the stocking process to make sure the shelf is set according to the planogram developed. It allows employees to glance at the picture, rather than having to take time to read the labels.

"You could come out with a great planogram, but it's only as good as a retailer's execution," he noted. "But with the preprinted strip and picture, it is much harder to mess up."

It also saves time when stocking the shelves because the picture simplifies the process — which, in turn, saves on labor. "Using the strips, retailers save time, and any time you can simplify or speed up labor, that labor can be applied to other areas of the store to benefit the overall business and even help the bottom line," said Wills.

So what happens when a new product is added, or the planogram changes? Often a refresh only occurs twice a year, and the strips can be easily reprinted, according to Wills. And Fetty points out the possibility of offering a new item rack.

"Circle K has a new item rack so they can reorder the strips very easily because they are not replacing the whole category," he explained. "Most retailers have a new item section to assure speed-to-shelf, and it is usually only three or four feet, with only four shelves. It's easier to replace these strips than to restock 12 feet of nine shelves in the regular section."

Ordering On the Go

To improve inventory control and merchandising efforts for its c-store customers, M.R. Williams Inc., a distributor based in Henderson, N.C., and serving retailers in both North Carolina and Virginia, decided to create a Web-based inventory and ordering model.

The company first developed a Web site to provide the ability for retailers to place orders as well as access their database and pricebook information maintained by M.R. Williams. Mike Williams, owner of M.R. Williams Inc., said, "They can also create movement reports, and all they need is a computer and Internet access."

The second part of the model rolls the components of the Web site into a handheld unit used at the stores — specifically, Symbol's Palm device. The company's AS400 server manages the databases of all its customers, and a server between this one and the Palm uses Extended Systems' mobile sync and management software to transfer shared data between the server and the Palm.

"The Extended Systems software funnels to the Palm and converts the information into a usable format for the store to use," said Williams. "The Palm is a fairly inexpensive and convenient tool, and we designed, wrote and tested the software, and rolled it out in the field two and a half years ago," said Williams.

The company charges c-store customers $10 a week to use the unit, and named it C-Tech 21, standing for convenience technology for the 21st century, according to Williams. "We found stores can reduce their inventory by $5,000 per store on average and have a better stock level of products, with fewer out-of-stocks because the Palm gives them a balance. Instead of thinking they may need something, now they have the information at their fingertips."

Information at Hand

The mobile version using the Palm has many of the same features the original Web site offers, but it allows retailers to walk through the store and scan an items UPC code or shelf tag to check order history and place a reorder. It also allows smaller retailers who are not scanning or do not have an on-site computer, to still reap the benefits of a computerized system.

"Stores not scanning at the POS can use the unit to do price checks, and can receive messages from us as well as their headquarters without a computer," said Williams. "It's all wireless."

When placing an order, a retailer can scan an item or tag and see their average weekly purchase, and based on their order history, the system will recommend an order amount, according to Williams. The Palm also gives a list of items already on order to avoid over-ordering.

Several of M.R. Williams' customers utilize the Palm tool, including Speed-Ez Inc., a single-store operation owned by Dabney Convenience Store, in Henderson, N.C. The company started using the Palm a year ago for ordering and inventory, and is very pleased with its results.

"You can do inventory with it, and even look up items you don't order from M.R. Williams," said Karen Poythress, owner of Speed-Ez. "When I place my weekly order, it tells me how much I ordered before, the last time I ordered, and my average weekly order. It really contributes to reducing my out-of-stocks. I don't run out of things as much as I used to before I started using it. It also keeps me from forgetting to order things or under ordering."

Poythress also has her staff use it to look up prices. "If you ever used a PDA before, it's really simple to operate," she explained. "I can even look up my accounts receivable. M.R. Williams sends e-mail messages on it to let us know about products, and if I have any open invoices, it will let me know that as well. It's really a good tool. I call it my second brain."

Once the order is scanned into the Palm, customers simply hook it up to a cradle and a modem and by using a regular dial-up connection, the information is transferred to the M.R. Williams system. "We have some customers using the Palm, some using the Web site, and some using both," said Williams.
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