Consumer goods & retail

Our Consumer Goods and Retail experts focus on the consumer and offer our clients market-driven, rule-breaking strategies that work. We concentrate on the needs of specific industries such as FMCG, retail and fashion/sports/luxury and work on a broad spectrum of issues ranging from corporate restructuring to brand management and supply chain management. As a result, we cover the entire consumer goods value chain.

Today, consumers are far more demanding and unpredictable than they once were. While they want more quality and value for less money, time, and effort, their consumption needs and desires change depending on the occasion. For instance, a single consumer may buy groceries at a discount supermarket in the afternoon and eat out at a premium restaurant the very same night.

In this kind of environment, new consumer needs are constantly emerging, as people demand that integrated product-service solutions be available anywhere, anytime. For this reason, retailers and consumer goods manufacturers must come up with new strategies to meet their consumers' needs beyond traditional shopping occasions. To this end, new business models need to be taken into account that blur the line between manufacturer and retailer, as both must meet new consumer needs.

In light of these new challenges, consumer goods manufacturers and retailers must constantly review their activities. More precisely, they must update brand/product portfolios and value chains need to exploit new market opportunities. They should also enhance current market approaches to create value for both consumers and themselves.

This is where the Consumer Goods & Retail Competence Center comes in. We focus on the consumer and offer our clients market-driven, rule-breaking strategies that work. Expert teams in FMCG (fast moving consumer goods), retail and fashion/luxury/sports focus on the needs of these specific industries. They offer advice on a broad range of relevant issues, from corporate restructuring and organization to brand management and supply chain management. As a result, they cover the entire consumer goods value chain.

We provide a truly international perspective and offer our clients knowledge and insights gained from other continents and industries. Our consultants have a wide range of cultural and business backgrounds and hands-on experience in the consumer goods, retail and fashion/luxury/sports industries. This allows us to develop and implement innovative concepts that substantially improve our clients' performance.

Integrating hypermarket stores into an international leading food retailer's network in Poland

Starting in the mid-1990s, many international retailers entered the Polish market and have since grown rapidly. Since the beginning of the 21st century, consolidation has taken place mainly among hypermarkets. To stabilize and secure its future market position, our client agreed to acquire a hypermarket chain.

Over the course of this post-merger integration project, Roland Berger Strategy Consultants assumed overall project management responsibility. The main challenge of this project was integrating a new (store) organization, logistics, assortment, etc. into the existing environment. Four major action packages were developed to ensure successful integration:

– Implementing IT

• Harmonize the assortment (products, assortment structure, pricing, supplier)
• Migrate IT systems
• Test each product (barcode) to ensure that master data is correct
• Install new cashier, scale and IT infrastructure

– Logistics

• Reschedule ordering cycles for transition period
• Train and reorganize ordering and receiving for new direct store delivery (DSD)
• Coordinate suppliers to change to DSD

– Organization

• Reorganize and remodel processes according to client standards in
  goods receiving, the register area and sales staff
• Train staff
• Act as a link between both head offices

– Re-branding/marketing

• Change in-store communication to client standards/logos
• Align logos and direction signs outside the store to client standards
• Change promotion placement and merchandising according to client standards
• Deliver client leaflets to all stores
• Introduce new private label brands

The results of the project were achieved within the short period of 6 months' time: integration of the outlets was completed, headquarters were integrated and one warehouse of the acquired company closed. New jobs were even arranged for the employees of this warehouse. In sum, the company was highly regarded and won a prize from the workers union.

Enhancing a leading Portuguese retailer's value contribution with regard to international sourcing practices

The client operates supermarkets, hypermarkets and other specialized retail formats that cover a wide range of non-food markets. The company's biggest challenge is sourcing for all of these different formats, as each format needs to distinguish itself through its assortment strategy. This leads to high sourcing complexity and low volumes per SKU/supplier. To bundle buying power for its operations, our client aimed to build up an international sourcing practice. To do this, the client asked Roland Berger Strategy Consultants to answer three key questions:

1. What is the ideal share of internationally sourced volume per category?

• What is the international sourcing volume of key competitors in relevant (non-food) categories, such as footwear and apparel?
• How does it fit with the current assortment strategies of the clients' different retail formats?
• What international sourcing target per category and format would be realistic?

2. What are the main sourcing markets for the client's retail formats? What will they be in the future?

• Is one office in Asia sufficient?
• In which sourcing markets should the company presence be expanded?
• What would be the best set-up in each of the possible sourcing markets?
• What is the ideal logistics set-up with regard to the different formats?

3. Are the current organizational processes within the client organization efficient?

• Who is responsible for the sourced goods in terms of volume, quality and price?
• What is the ideal "balance of power" between categories and formats?
• What is the ideal process to ensure that

• – The format is successfully differentiated
• – Synergies are realized at the category/supplier/SKU level
• – International sourcing potential is exploited in the best way possible

As a result of the project, new sourcing offices in Brazil and India opened up. The three-year targets set in each category, including sourcing countries and products, were reached for non-food categories. Processes and organizational issues were adapted in the short term.

Defining a new trade term concept for a global fashion company

Faced with increasingly complex trade terms and powerful retailers, our client approached us to harmonize trade terms across countries and brands.

In the first project phase, we addressed this challenge in three modules:

1. Create transparency by collecting and mapping all existing trade terms
2. Define a trade terms grid that contains all terms to establish a common language
3. Develop a strategic framework and guiding principles for a new concept and define all terms in detail

In the second phase, we focused on setting up systems and reports and preparing training packages for the staff, thereby ensuring comprehensive project implementation.

The project proved highly successful, with a forty-fold annual return on consulting fees.

Repositioning a premium fashion brand

Competition in the premium fashion industry is intensifying as clothes manufacturers are constantly upgrading their offers to keep up premium and luxury trends. In this challenging environment, our client wanted to review its positioning to meet current and future consumer needs and stand out from competitors.

Our client asked us to create a comprehensive overview of brand management by reviewing its brand positioning. We also set up an implementation plan for rebranding and defined the organizational implications with rb Profiler. The project comprised three main steps:

First, we conducted detailed market research to gain insight into consumer profiles/
segments, including values/needs, demographics, consumption behavior,
spending, etc. We then mapped the actual consumer brand perceptions in terms of the values/needs that the brand its competitors‘ brand address (or not). Next, we compared these perceptions with the market drivers (general expectations/needs/requirements within a specific market segment).

In the second step, we defined the rationale for developing different brand strategy options based on the market research results. We elaborated three different strategic scenarios to address the most valuable target groups, maximize the exploitation of these target segments and allow the brand to distinguish itself from the competition. We identified the most attractive option by evaluating its advantages and economic impact. This evaluation included analyzing the migration path, checking the fit with the current portfolio in terms of feasibility, risk and time required for implementation, and assessing whether it is possible to integrate important market drivers.

In the third and final step, we defined the appropriate marketing strategy required to achieve the target positioning.

Conducting a strategic review for an international tobacco manufacturer

Our project for an international tobacco manufacturer was riddled with complex challenges:

• A challenging legal environment put pressure on top-line growth
• Significant bottom-line improvements needed to be made by cutting costs (e.g overhead, production)
• A cultural transformation was underway, turning the company into a "lean, mean fighting machine"

The client was convinced that more needed to be done. For this reason, we conducted a strategy review that included developing ideas to reach the ambitious targets the company had set itself for the next ten years. The company believed that implementing the right actions would put it back on the path to growth.

Over the course of the project, we completed the following modules:

1. Created a base case and growth scenarios until 2015
2. Developed a clear vision and target
3. Developed growth ideas to close the gap
4. Developed an implementation roadmap and guarantee of governance for the initiatives defined

As result, the management team reached a common understanding with regard to the urgent need for action. This included a change of mindset, moving from favoring a step-by-step approach to a focus on longer-term strategy development. A number of promising growth initiatives were identified, some of which are about to be launched.

Generating growth through innovation for an international paper and tissue manufacturer

Our client in the field of commoditized paper and tissue faced a variety of challenges:

• Price-driven environment, high private label share
• The client's brand share and equity was decreasing over time
• Cost cutting was realized
• Price erosion could not be compensated for
• A sense of urgency prevailed

We worked closely with the client to approach these challenges in the following way:

1. Generate innovative ideas
2. Create consumer insights through market research (focus groups)
3. Prepare relevant case studies
4. Conduct workshops with management and develop, evaluate and prioritize innovation initiatives

As a result, a new innovation strategy was implemented that focused clearly on the brand business unit, adapting the organizational structure and market entry.The first products were launched within 18 months.