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Shelf Ready Packaging - A Bigger Cake?

'Shelf Ready Packaging (SRP) is a reality today', 'SRP is not a goal in itself' - these were just two of the messages from the SRP breakout session at the ECR Europe conference in Stockholm.

In a packed auditorium, speakers from IGD, Tesco, Carrefour, Procter & Gamble, Colgate-Palmolive and Smurfit Kappa Group discussed the role of SRP in helping combat the challenges of the last 50 metres.

The session was chaired by Jonathan Pearce, Head of Supply Chain - Europe, Nestlé and Joe Dybell, Food Supply Director, Tesco, who took the audience through some of the challenges of replenishing shelves with and without SRP by stocking shelves in white coats at the entrance to the auditorium.

KEY AREAS FOR SRP SOLUTIONS

Philip Clarke, International and IT Director, Tesco, opened the session and outlined three key areas for successful SRP solutions which should help improve sales and drive availability:

• Quality of packaging (fit for purpose)
• Design with the whole category in mind (aesthetics on shelf)
• Dimensions (fill the shelf, not under- or over-fill)

Jacques Vincent, Vice-Chairman and COO, Danone, talked of the need to 'make the cake bigger, not more expensive'. Faster replenishment should benefit the shopper, and a well sign-posted promotion should help sell more, but SRP is not necessarily the solution for all products and all categories.

Starting with the shopper, international food and grocery expert IGD showcased new research from across France, Germany, Spain and GB into how shoppers react to products being hard to find, out of stocks, and their views on packaging in-store. Over 50% of shoppers in France and GB buy the product from another store when faced with an out-of-stock.

SRP AESTHETICS

The aesthetic aspects of SRP are also important, where shoppers recognise the advantages of using SRP for merchandising. Recognising the issues, as well as the positive features identified by shoppers, should help the industry to improve design and implementation, said Tarun Patel, Head of Supply Chain & ECR UK. This means that the shopper will ultimately decide the success of SRP. Successful implementation in-store is key to ensuring SRP is not just a technical solution, but a shopper-friendly one too.

The retailer view of SRP was given by Xavier Hua, Director of Supplier Logistics Relations, Carrefour, which wants 100% of Carrefour own label products to be in SRP (Prêt-à-Vendre - PAV), and more than 50% of product volumes to be in SRP solutions, including merchandisable units, half or quarter pallet solutions.

Xavier announced recent implementation results: 12% of food SKUs in France are in SRP (equalling 20% of grocery value), and 50% of grocery value is in SRP solutions in Poland, where the local team has driven fast implementation. Carrefour stated that SRP is not a goal in itself, but has to provide value for the shopper as well as taking cost out of the supply chain.

WHERE AND HOW TO PLAY

Procter & Gamble's Graeme Carter, Customer Logistics Director (Global Tesco Team) talked of how important it is for manufacturers to know "where to play", and particularly how critical it is that an SRP solution meets the needs of the retailer, the manufacturer and the shopper. The risk of not delivering SRP solutions can lead to lost listings, lost share of shelf, and lost sales.

Graeme said that while standards will help consistency and are particularly important for large-scale manufacturers working across many markets and retail customers, it is equally important to "deliver the basics". These are solutions that are easy to identify, easy to open, present the right brand image, and manufacturers must realise that SRP is no longer a point of differentiation, but a cost of entry.

Pelin Karakas shared Colgate-Palmolive's approach of "how to play". She talked of the importance of the Colgate road-map to define "good SRP", incorporate it in new project design (promotions, new products) and leverage existing examples. Colgate-Palmolive also uses a scorecard approach, which Pelin likened to a school report: "you don't need to get 100% everywhere, but you need to pass the class".

In the final panel Q&A session, Chris Lewis from Smurfit Kappa Group explained how packaging suppliers are working with manufacturers to find innovative SRP solutions. These recognise the need to integrate new SRP into existing production facilities.

Recognising the need for retailer differentiation, Xavier from Carrefour added that harmonisation is more relevant than standardisation, where it is striving to get solutions across all its formats and markets. P&G said that collaboration is key to finding the right solutions, but it does take time: "It is important that manufacturers don’t move too quickly to the wrong solution."

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