By collaborating over the web with suppliers on supply and demand data, Metro Group has increased the percentage of promotional products delivered to stores, resulting in more sales and happier customers, Axel Hopp, head of corporate information management, tells Internet Retailer.
Metro, based in Dusseldorf, Germany, and one of Europe’s largest diversified retail companies, has been conducting web-based collaborative planning, forecasting and replenishment, or CPFR, through the GlobalNetXchange with several suppliers to its Metro Cash and Carry chain of wholesale grocery stores.
Suppliers participating in Metro’s CPFR program have shown a 99% deliverability rate of planned shipments, compared to 97.5% for non-CPFR partners, Hopp says. Although the difference of 1.5 percentage points may not seem like much, it makes a big difference in profit margins and in customer satisfaction levels, he adds, noting that Cash and Carry’s professional wholesale customers tend to be more demanding than retail shoppers. “Cash and Carry customers get angry if they go to a store to buy promotions and the products aren’t there,” Hopp says.
Moreover, Metro plans to learn from its Cash and Carry CPFR program as it applies CPFR to its retail stores, where the deliverability rate tends to be lower. Although Hopp declines to give the average deliverability rate for retail stores, he says Metro expects CPFR to have an important effect on increasing in-store stocks. “We see room for improvement,” he says.
He adds that CPFR will play a crucial role in retail stores, where there tends to be higher volatility in promotional pricing than in the wholesale stores. Retail customers are often less brand-sensitive for certain product categories, such as laundry detergent, so a promotion on any detergent brand is likely to be popular, making it more important to Metro and its suppliers to collaborate on sales and production forecasts to assure adequate supplies in stores, Hopp says.
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