Reducing shrinkage with a customer-centric solution

The challenge

A leading APAC supermarket was experiencing 20% growth in shrink in FY23. They were seeking a solution to address store-specific stock loss and wastage that was driving poor financial outcomes for the business, without adversely impacting the overall customer offer.

Scalene was engaged to leverage our advanced analytics to develop a store-specific ranging solution encompassing frameworks, processes and tools. We also supported change management to inform category decision-making and reduce shrinkage costs without compromising the customer offer in each store.

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The solution

We identified range changes by store, where (i) items driving high shrink or wastage could be removed; and (ii) where customers would be left with a good alternative product that would meet their needs. Our solution focused on three areas.

1. Store specific recommendations tailored to requirements of each store with customised range selections

2. Customer-centric factors such as customer loyalty, decision trees and promotions incorporated to ensure product choice is retained and the overall shopping experience is preserved

3. Integrating the capability into the client's internal range change schedule and developing a robust tool to track progress and benefits realised

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The results

Through optimised assortments at store-level, our client saw a significant reduction in wastage of c.9% and stock loss of c.5% without a drop in sales or customer satisfaction.