ECR Europe Shrinkage & OSA Group – Summary of 20/21st May 2015 meeting - Helsinki
Present: Adrian BECK (UNIVERSITY OF LEICESTER), Kirsten BRUCKMANN (METRO GROUP), Anna-Liisa FLINK (SOK), John FONTEIJN (ROYAL AHOLD), James AIREY (ASDA), Mark CASSIDY
Date: 20th & 21st
May 2015
(ASDA) Steve HEWITT (MARKS & SPENCER), Terence FORD (MARKS & SPENCER), Neil MATTHEWS (CHECKPOINT SYSTEMS UK), Alastair FRANCIS (TESCO UK), Victoria BARKS (TESCO UK)
Colin PEACOCK (ECR Europe Shrink Coordinator), Emilio VALERO (BACARDI), Peter WERRE (AHOLD), Andreas BERLIN (OLIVER WYMAN), Paul R SMITH (SAINSBURY'S), Andrew YOUNG
(WAITROSE), Barry STUBBS (HOMEBASE), Jason HALL (ADIDAS), Matt HALL (Adidas), Tuomas KOKKONEN (ALKO), Jyrki TOMMINEN (KESKO), Malla RAUTELIN, (FAZER), Elina TOLONEN
(L’OREAL), Tuomos ESKOLA (LOREAL), Per CLEMMENSON (Securitas), Nele DE FLOU (GS1 BELGIUM & LUX), Tommy FARSIE (Chiquita), Issa SOUMMA (Chiquita)
20th May
1.
Welcome and Introduction – SOK Inex Distribution Centre, Helsinki
John welcomed the group and all the members. The group were all reminded of the anti-trust caution* and were given the
opportunity to introduce themselves briefly and their respective expectations of the meeting. The below list, shares a selection
of the expectations.
The SOK group offered their welcomes and before a tour of the Distribution Centre, offered an overview of the SOK organisation,
their philosophy, their operations & brands and some key business results. In more detail, Mikko shared their risk management
organisation and thinking.
The group were then divided into three teams and each toured the facility, following the flow of goods from receiving through to
despatch. Re-convening after the tour, the group then provided feedback to the distribution centre team on what they liked and
ideas they saw as opportunities based on their respective experience.
The group then departed to the hotel for lunch.
2.
Prisma Hypermarket Store Visit
A brief overview of the HOK Elanta operation preceded a store visit where each of the four groups were invited to learn about
aspects of the store namely, 1) how the store partners with Securitas on security guarding, 2) how stores will soon get a
dashboard on their five core loss indicators, 3) how the audit function is leveraging a digital (iPad) audit tool to guide stores on
identified compliance opportunities and 4) a walking guide as to how the store handles goods from receipt to the shelf.
Immediately after this tour, the four groups each prepared a flip chart of the positives and opportunities they saw for the store
and the SOK group. This feedback was reassuringly for SOK, not a big surprise but nonetheless, it was seen by SOK as highly
valuable. Equally, for those visiting the store, it was seen as highly interesting and valuable.
3: SOK Institute (the “SOK Social Club”)
Pre-dinner the group heard a presentation from Per Clemmenson (Securitas) on the Future of Guarding, in this talk, Per identified
the enormous value retailers are now generating productivity benefits through remote monitoring, scaled guard solutions for
City Centres (“guaranteed 90 second response time”) and the value of video beyond just the loss prevention use cases.
21st May
Action/Decision/
Remark
Who
When
1.
Welcome and Introduction
John welcomed the group back and asked those who joined the group for this second day to introduce themselves. The group
were again all reminded of the anti-trust caution. John read out verbatim the anti-trust statement*
Matters arising from the last meeting: There were no outstanding action points from the previous meeting that would not be
covered by this agenda. John reminded the group to complete their registration and profiles
*Reminder of anti-trust caution: ECR Europe will not enter into any discussion, activity or conduct that may infringe, on its part or on the part of its members and
participants, any applicable competition laws. By way of example, members and participants shall not discuss, communicate or exchange any commercially
sensitive information, including non-public information relating to prices, marketing and advertisement strategy, costs and revenues, trading terms and
conditions and conditions with third parties, including purchasing strategy, terms of supply, trade programmes or distribution strategy. This applies not only to
discussion in formal meetings but also to informal discussions before, during or after meetings.
2.
SOK Strategy Overview – Mr Arttu Laine, EVP, SOK
Arttu provided an overview of the SOK Group 111 year history and spoke to the key events that lead to the growth, demise and
then the revival of the SOK group that has now translated into a leading 47% share of the Finnish Grocery Market. The three key
interventions were the simplification of the group structure from 50+ Coop Groups to 8, the clarity of format and brand
positioning (Prisma, S Group and Alepo) and finally, perhaps the most significant, the establishment of the S Group Bank, a
strategy that has delivered a clear and sustainable competitive advantage in the Finnish market.
Looking ahead, Arttu shared the group’s long term plans to act on the clear shopper trends, more single households, consumer’s
desire for shopping everywhere and anywhere, and more, while at the same time sharing how in the short term there are no
shortage of every day battles to tackle, including the threat of further taxation on food, improving productivity at their
distribution centres, remaining relevant to demanding shoppers, etc.
Arttu closed by talking about the importance of being a responsible retailer and what that means practically to SOK customers,
who are also their owners. Arttu then took questions on the topics of internet home shopping, shoppers using self-scan, the
immediate priorities of SOK and finally one around why Coop in Sweden is not as successful as Coop in Finland.
3.
Shrink Communication Round table
Adrian set up the session talking to the challenges of communication on shrink (it’s not sexy, it can be a relatively small number,
etc) and the opportunities (new mobile devices) as well as the potential problems of mobile devices. (customer perception,
whose device and liability, etc.)
James Airey then provided an overview of the challenges his organisation faces, too many reports, too many data points, etc.
The group then brainstormed around some key questions set by Adrian, some of the themes in those discussions included:


Who to communicate to? Many audiences, internal and external. Key point is to speak the language they speak. Imagine that
Store Managers speak Finnish, Store Associates speak Spanish, Buyers speak French, Manufacturers speak German, etc.
How to communicate? “Push” the communication to them digitally and inspect compliance? Or make it available to them
when they need it, let them “pull” it as they see fit, and only inspect usage in the event that the outcome objective “hit
targeted shrink #” is not achieved.

What needs to change? Some consensus around the following points:
o Quantity –Stores receive too many reports, one retailer reported that stores received 492 different reports – this
was then scaled down to 10.
o Work of the Analyst – Too much time is being spent by analysts pulling reports Vs asking of the data, clever
questions.
o Format – simple digital reports or dashboards may be losing the ability to cut through to the audiences, short rough
production value youtube video’s, the use of Yammer and other more creative approaches to message delivery
were seen to be important.
o Relevance and actionability of data – need to move away from relying on the recipients of the communication,
especially when its data, being able to reliably interpret each table of data or graph. One retailer reported that they
have recruited a store manager into their team to help improve communication to store. Another retailer limited
the store to receiving only 5 emails a day and each email had very clear instructions, take a step to the left, etc. Yet
another had banned emails to more than one person at a store to improve accountability.
Overall, the session received positive feedback and members talked to the fact that they took away new ideas.
4.
Total Loss Project Update – Professor Adrian Beck
Adrian provided background on the total loss project, the rationale, the aims, the methods and the latest status.
The feedback and engagement from the group was positive. Input to Adrian included the importance of distinguishing between
outcomes and the drivers of losses. The example was self-scanning, if the business knows that self-scanning can triple the rate of
shrink on those transactions, is that in itself a driver of loss or a business decision that will knowingly create greater loss? Another
key piece of feedback was the suggestion by Mark Cassidy to engage with the Finance experts at the participating members
organisations
Adrian will continue to collect feedback and invites every member to participate. He will write an interim report for the end of
July and circulate to members. This interim report will then inform the USA retailer research on total retail loss which in turn will
lead to a global report, and potentially global survey in late 2016.
5.
Mobile Self Scanning – Professor Adrian Beck
With unprecedented access to retailer’s trials and data, Adrian reported a summary of a major new study on the impact of
mobile phone scanning on shrinkage. The headline was that the shrink from those sales sold via the mobile self-scanning devices
was 3-4 greater than existing benchmarks. Adrian did share the limitations of this data and urged some caution. In the report
that will be shared with the members at the end of week of June 8 th, points to the need for the industry to work together on
breakthrough solutions that can amplify the risk of non-scan’s being detected DURING the shopping journey. Adrian challenged
the industry to have products that talked to devices, more precise geo locating of scanners and scans and more.
6. Wrigley’s and Tesco Case Study – Richard Brown (Wrigleys) and Victoria Barks (Tesco)
In an excellent presentation, both parties shared their journey to growing sales and reducing shrink, a journey that got started by
the need for a fixture solution to tackle the theft for re-sale of Wrigley’s gum [slow the thieves down] but expanded into a more
end to end project. To deliver the results, the joint team followed the process that started with the receipt at Tesco DC and
ended with the re-sale of stolen product in convenience stores. This end to end view lead to the creation of new solutions that
have helped sales grow in Tesco and reduce losses. Further, it has also helped open up new way of working, one that is not
dominated by the buyer & sellers relationship but in fact, one determined by store manager and shopper satisfaction.
7.
News & Magazines Update – Steve Hewitt (M&S)
Steve shared with the team the latest progress on a project that aims to quantify the cost of shrink and the unique costs
associated with the management of N&M shrink and availability to UK Grocery Retailers. Adrian will be in a position to publish a
draft report in June, a report that the retailers will use to determine the level of support and resource the UK retailers are
prepared to invest in future research on this category.
8.
AOB
John / Colin covered off AOB including
9.


Date of next meeting – Paris - hosted by Carrefour (TBC) – dates may flex to meet the host’s availability.
Other dates – May 27th Sell More, Lose Less workshop, Polska: June 17th, EHI Germany

Sell More, Waste Less – round table to disseminate Eindhoven research – October 20th - London
Wrap Up
John led the wrap up and asked new members whether this was a good use of their precious time. Good news, every new
member was very positive and found the meeting fully met their expectations. Members were reminded to please complete
their profile on the ECR members in order to ensure they continue to receive updates and invitations to the ECR meetings.
Update profile on
www.ecr-shrinkgroup.com
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