retail strategy methodologies

BI, Analytics & Reporting

- 4 min read

“Land and Expand” for retail strategy development

Three methodologies to achieve excellence in large grocery chains through an integrated planning and analytics software

What are the steps involved in developing a retail strategy? This is a fundamental question that should be considered when a large grocery chain evaluates a software solution for its strategic retail planning process, including the business strategy for grocery stores spread over several geographics. Indeed, identifying those steps and holistically conceive them allows grocery chains to represent their own business logic within the software solution and consequently use the benefits of technology to drive efficiency across the entire supply chain, from warehouse to customer service level.

We can broadly recognize three different ways to implement a combined planning and analytics solution in an organization: top-down, bottom-up, and a hybrid approach. In the first case, the starting point is the Office of Finance: the financial processes are standardized and automatized based on effective workflows. Consequently, the digital retail planning transformation propagates across the operations and day-by-day activities of the company. Instead, the bottom-up approach works oppositely: after the evolution of the operational elements of retail strategy, the digitalization ‘climbs back to the top.’ Finally, a hybrid approach combines both the dynamics, moving simultaneously from the top and from the bottom towards a touchpoint.

In this regard, we spoke to three of our Italian customers within the Grocery industry: Conad Nord Ovest, Pac 2000A, and Unicomm – three leading names in the supermarket sector and among the cooperatives of independent retailers. They represent these three different ways to consider the importance of strategic planning in retailing, based on a modern Decision-Making Platform.

Top-down and going “over the top”: From finance to operations, and from budgeting to multi-year planning

Struggled with too many disconnected software solutions for the finance area, Conad Nord Ovest chose to transform its FP&A approach to achieve a standardized and combined financial planning and reporting. Therefore, the company’s starting point of its journey towards an end-to-end integration was the “top,” i.e., the financial department:

Before introducing the Board Decision-Making Platform in the Office of Finance, our Financial Planning and Analysis process was scattered across different dimensions: a database that gathered the information from other databases and a disjointed reporting tool. This situation caused delays, and the reporting capabilities were minimal. We searched for a solution that addressed both our financial planning and our advanced reporting and analytics needs. We relied on Board to transform our Office of Finance, and the outcome has been extremely positive and significant,” says Franco Iazeolla, Management Control Director at Conad Nord Ovest.

Given their successful experience with Board, Conad’s management team decided to expand the use of the platform to other elements of retail strategy:

We are so proud of the best practice we have adopted with the Board platform that we are promoting the use of the software across the entire cooperative and the network. We have implemented the budgeting process with Board within the other entities of our network; besides, we have expanded the use of the software to the operations, such as marketing and logistics as well.

Conad Nord Ovest also put its trust in Board for high-level planning, therefore going “over the top” of the Office of Finance: the annual plan for the Group based on the Board platform and a multi-year planning process with a long-term vision.

Bottom-up and strengthening the chain: from BI to Enterprise Performance Management, connecting Sales with the Office of Finance

The first Board project implemented at PAC 2000A consisted of a set of analytics and reporting applications. But soon, the company’s information specialists acknowledged that a unified BI and CPM/EPM platform could provide many more capabilities than originally thought. Indeed, they could plan and analyze on the same sets of data, translating the operational drivers – related to the bottom-part of the organization – into financial ones, therefore underpinning the strategic retail planning process:

We realized not only that the analytics capabilities of the platform were more advanced and business-oriented than those of other tools in the market, but also that the platform could be used as an Enterprise Performance Management solution, bringing its benefits across the entire organization, up to the Office of Finance” recalls Vanni Chioccoloni, CIO at PAC 2000A.

At PAC 2000A, the Board platform has been able to fill the gap between the Sales area and the Office of Finance, achieving full convergence between commercial plans and strategies on the one hand and their relevant financial impact on the other.

That means that PAC 2000A linked the sales and purchasing areas with the administrative and management control areas. This helped ensure full control of sell-in (Cooperative’s sales) and sell-out (their network’s sales), as well as bonuses and contributions. Furthermore, the use of Board was extended to the logistics sector, right down to individual items of inventory, so that the top executives of PAC 2000A can constantly monitor the flow of goods along the supply chain.

A unified hybrid approach, cementing the Integrated Business Planning view

A hybrid implementation of a planning and analytics project starts from a specific area of the organization. It then expands to both the strategic and financial dimensions of the company and the operational activities as well. That’s how Unicomm approached its retail planning challenges. In a preliminary phase, Unicomm tested Board as an analytics solution for the HR department. As the software immediately proved itself to be the right tool for the job, the management team decided to extend its use:

In a couple of days, we created a set of workforce analytics and reports that we’ve never been able to generate with other tools. Therefore, we decided to also address our Sales Planning needs with the Board platform,” explains Marco Giannotti, Management Control Director at Unicomm. But that’s not the end of the story. Unicomm also approached the Board platform from a higher perspective, creating a multi-year strategic plan with an Integrated Business Planning (IBP) methodology. Connecting all the departments and the business entities – e.g. each store – of a company in terms of planning cycles, data consistency, and visibility, an IBP approach allows for balancing supply with demand, optimizing inventories, identifying the best marketing strategies for retail stores, and support the company’s growth with adequate human resources:

With an IBP software solution, we can combine the different budgets and forecasts of each entity of our Group and drive the planning and business modeling processes with the highest reliability and completeness.

Deciding on the best approach to retail strategy

Out of the top-down, bottom-up, or hybrid methodologies, which one is best? As highlighted in the use cases above, the answer depends on the needs of each organization. Conad Nord Ovest, Pac 2000A, and Unicomm each started from different points and drove their digital journey along different lines. However, what matters is the possibility of having enough flexibility and technological functionalities to adapt the software solution to its strategic plan for retail business instead of the other way.

As we have seen, each grocery chain has gained significant benefits through their different digital journeys: all of them can now rely on end-to-end visibility of their retail chain; seamlessly manage budgeting, planning, and forecasting processes across Strategy, Finance, and Operations dimensions of their organization; and control and analyze the stream of information, understanding the financial impact of operational data. The interesting thing is that they all use the same unified BI and Corporate Performance Management platform, which must be flexible enough – from both an architectural and business standpoint – and technologically advanced to meet different planning and analytics needs.

Taking an Integrated Approach to Business Planning

When faced with the task of planning complex, and often global, multi-level processes, organizations typically find themselves with a disconnect between strategy, finance, and operations. The result is all-too-often a reliance on spreadsheet-based planning, typically created independently by different departments, with little-to-no visibility of their impact on the wider business model and rarely linked to offer strategic insight across the organization. Ultimately, this will impact the company’s ability to hit its goals.

Read this brochure, the holy grail of decision-making, to find out how an IBP approach, driven by the Board platform, overcomes these challenges. 

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Discover more about the IBP methodology used by Board

Read this brochure, the holy grail of decision-making, to find out more about Board's Integrated Business Planning methodology