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95% OSA for convenience store - MySales implementation at Blyzenko

95% OSA for convenience store - MySales implementation at Blyzenko

 

Demand forecasting is one of the biggest challenges for grocery chains among inventory management optimization initiatives. Blyzenko, a convenience store chain from Western Ukraine, integrated the MySales automated forecasting system, which significantly improved forecasting accuracy for both regular and promotional sales. The integration of the promotional module and the automated ordering system helped increase the availability of goods to customers and minimized the impact of staff errors on the quality of ordering decisions. Andrij Salo, Organizational Development Manager at Blyzenko, and Yaroslav Gazda, Systems Analyst, share their impressions of MySales implementation.

— Please tell us a few words about Blyzenko.

It all started in 2013. It was then that we got the idea to open a store in one of Lviv neighborhoods. The first Blyzenko store was opened in Lviv on I. Franki 35.

The company's credo - "Close to the closest". - means not only a convenient location, but also a caring approach to every customer. 

Today Blyzenko is the largest grocery store chain in Lviv in terms of the number of outlets. We also operate in Ivano-Frankivsk and Ternopil, where we have a total of more than 150 stores. Our stores are always located near customer’s homes, offices or educational institutions. So that it is convenient and comfortable for our customers to shop for fresh products, bread or aromatic coffee. Everyday Blyzenko stores serve more than 100,000 customers.

— Why did you reach out to MySales?

We wanted to improve our own automatic ordering system. We knew that a prerequisite was higher sales forecast accuracy. That's why we contacted MySales.

— Which module was the first to be implemented?

— In December 2017, we started automating sales forecasting for the alcoholic beverages category. This category is a challenge during the New Year's Eve period, and the launch was a success. We decided to expand forecasting using MySales to all product categories across the chain. 

The next step was to introduce a module for forecasting promotional sales. Forecasting promotions is one of the most difficult tasks in grocery retail, as both manufacturers and retailers risk losses due to shortages or excess of produced/purchased goods that are not sold out. MySales handles this task very well. When creating a forecast for a promotion, many factors are taken into account, as well as the sales history of previous promotions, both for each product individually and for the entire group. 

After the successful implementation of the forecasts and promotions module, we decided to expand our cooperation with MySales and implemented the automated replenishment module (from May 2021). Thanks to taking into account a number of additional factors compared to the existing tool, it allowed us to optimize the ordering process.

— How do you organize replenishment for distribution centers and stores? 

— All orders are calculated according to store delivery schedules with the goal of  ordering enough product to be placed on store shelves by the next delivery.

Currently, stores are replenished in two ways: the first is ordering directly from the supplier to the store, and the second is ordering from the distribution center.

When ordering goods from the distribution center, two picking method are used: cross-dock or pick to zero (after delivery to the distribution center, the goods are distributed to the stores without storage in the distribution center while taking into account the needs of the stores until the next delivery). 

— How do you organize pricing? 

— We are not yet using the MySales pricing module, but we are constantly monitoring the market and trying to follow trends. Price elasticity of demand is one of the factors taken into account when forecasting orders in MySales.

—What factors influence your sales the most and how do you take them into account when forecasting demand?

—There are a number of factors influencing sales volumes: price, seasonality, promotions, changes in assortment, increased demand for certain product groups. MySales takes all these factors into account when ordering goods to stores and the distribution center.

— To what extent do the forecast and actual sales figures coincide after the implementation of My Sales? 

— We constantly analyze OSA (on-shelf availability) and currently it stands at 95-96%, depending on the product group and the period. The best indicator is the satisfaction of customers who visit our stores and can buy the goods they need from the assortment presented.

— How often do you do promo sales?  

— We run over 150 different promo campaigns throughout the year. Both regular promotions based on seasonality and special promotions for specific calendar events. The range of products on the promo is constantly changing. When conducting a promo, you need to take into account many factors, from the communication strategy to the sales forecast and storage of additional goods in stores. All this is taken into account in orders generated with MySales.  

— What is the percentage of SKUs on promotion in relation to the total assortment? 

— Throughout the year, we hold various types of promo actions every day. The percentage of SKUs sold in promotion depends on the period of the year. It can reach 15-20% of total sales, but in some categories the share of promotional items exceeds even 50%....

— How do you assess the effectiveness of promo campaigns?

— While planning and executing promo activities, it is necessary to keep in mind that the costs incurred will provide the expected return. In order to make a correct assessment, a certain sequence of actions must be followed. First, you need to plan the goals of the promotion: in terms of turnover, units sold, profit. Then you need to evaluate their achievement after the promotion ends.  MySales helps us to plan promotions and according to our analysis, they are very effective.

— How long did the MySales integration process take?

— The process of integrating the auto replenishment module took two months. It took two months more to customize certain details: matching distribution center picking methods and ordering ingredients to produce delicious baked goods and hot drinks in stores.

— What IT systems required integration with MySales? 

— We integrated MySales with our ERP and WMS. 

— What changed after implementing MySales? 

— The outcome of integrating MySales is improved on-shelf availability, eliminating the human errors in the ordering and reduced labor costs for correcting the errors. Our suppliers receive orders faster. It helps them to produce goods earlier and prepare them for shipment to us. This is very important in a market where every customer expects high quality.

— What results of MySales integration could you share?

— MySales' tools have helped us increase the accuracy of regular and promotional sales forecasts, optimize inventory management and minimize the impact of human error.

 

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