Supermarkets COOP: the concept of two worlds

A clear vision is as important for the store as a spine for a human been. This framework determines everything: positioning of a formula, customers, prices and service, marketing ... Experience shows that the development of successful and original concept requires considerable effort, research and studies. On successful creation of the Dutch supermarket chain Super COOP, which design is created by bureau Jos De Vries The Retail Company, we would like to share this with you.

Revolution

Before you begin a story about the COOP concept, we believe it is important to describe a situation in which the concept was born. Dutch retail - one of the most technological and advanced in Europe. Tough competition is formed between the 6 major retail groups - the main market players. To keep leadership on the market and retain the customers, the formulas took drastic measures. The year 2003 in the Netherlands was marked by a «price war». It was launched by the country's biggest supermarket chain Albert Heijn. By that time the prices in its stores were too high and the buyer began to switch to discounters. Thoroughly prepared, one day the formula has «dropped» prices. Some products become 10-15% cheaper and some even 30%. For other retailers this was totally unexpected, and they were forced to low their prices to retain the customers. In general, the war caused all players loss of 5% margin. Also, this has led some formulas, like the hero of this article - chain COOP, to changes and the development of a new concept. Historically, that changes in the market coincided with changes within the Co-operative retail. Chain COOP is included in the group Superunie. The chain acquired company Codis, owner of two modern Distribution Centers. This allowed to reconstruct the logistics and to increase efficiency of work. Now the chain has eleven thousandth DC with fresh products, which handles about 60 thousand boxes (this is the unit of measurement) weekly. The second DC provides the chain with dry grocery and non-food products. Thus, the two DC serve stores, located al over the country with a 97.1% order fulfillment. Delivery of goods made in carefully marked transport trolleys, with address information not only of the store, the goods, but also indicating a number of shelves. Fresh products get into the stores before 8 am, where they immediately going into the sales area and are placed on shelves. By the way, thanks to advanced logistics warehouse and office space in the store occupy only 15%: the goods are not stored in the warehouse, coming exactly according to the order and on time, as for trolleys - folded it does not need much space. The best of both worlds

By the time of the creation of a new concept, the chain already had 50 stores in two formats: city stores mostly franchised COOP Compact (300-400 m2 7000 titles), supermarkets and COOP (600-1500 m2, 10 000 titles). The new situation on the market dictated an approach, based on the aggressive and competitive pricing concept, which will be valid during at least next 10 years. Dutch and German retailers have a good tradition - before they start to develop a new format, or concept, they explore, watch and analyze the experience of colleagues from other countries.

The idea of a new concept was born during a business trip of the top management of companies COOPCodis and design bureau Jos De Vries The Retail Company to the UK. «We can sell high-quality products and offer low prices! Original lay out, communication and design will help to combine «incompatible» », - was a decision. Indeed, the idea was to define the concept for the new format of the chain supermarkets SuperCOOP (stores from 1000 m2., 24 000 titles). The concept combined two worlds - the best in quality fresh food and best price dry groceries, frozen and non-food. Pay attention to the layout: the customers enter the zone of fresh, high quality products. Here, through design, directed light, visual merchandising a market atmosphere is created.

By the entrance the customer is welcomed with the smell of fresh backed bread from bread department. In Holland, bread department is often placed at the entrance; it immediately wakes up the appetite and «helps» the hungry customer to purchase more goods. Incidentally, in the Dutch supermarkets under 1000 m2. trying not to do a full production cycle. In first place, because of the high rent for the additional meters and besides, everything delivered ready for sale, packed, or convenient for the final preparation. Therefore, bread is backed from frozen prefabricates, but the illusion of a fully fledged bakery is there.

Then the customer meets the fruit and vegetable abundance, organized with the help of standard plastic storage containers. By the way, a low cost was one of the goals of this project. Investments are 20-25% lower than by the opening of new shop in the old format (approximately 1000 euro per square meter). In the corner of «fresh» part of the store, customers will find meat and meat prefabricates. In a small 15 m2 room, two butchers prepare meat products. They take out of freezer pieces of meat cut it marinate or turn into mincemeat. For the customer this is another sign of quality and trust factor – meat is just cooked.

The idea of a fresh world design was the creation of warm atmosphere. Therefore used directed lighting, warm colors in the design and communications. Look at the posters on the walls in the department of cheese, bread, fruit - they create the impression that the shop is full of goods and the choice is big. Posters illustrate the products indicate and underline the goods itself. The second part of the supermarket - a zone of low prices - opens to the customers when they exit fresh area. Here they enjoy the atmosphere of good discounter. Design and appearance are quite different here - cold light, high racks for dry grocery and non-Food, red gondola end with a bright promotional price. All this gives the signal to the customer – it is cheap here!

This new concept SuperCOOP pleased the customers very much -on the one hand, they are buying quality products, on the other – leaving the store with a full sense of buying cheap. Thanks to a new concept, launched in the first three SuperCOOP stores in 2003, they are now 39 of these kind of supermarkets. And all this in a small, very competitive country, with no unreached places left. The success of the concept of two worlds shows itself in figures- before the concept change the turnover from 1 m2 per week was 120 euro. Turnover attributable to fresh food, was 45%. After introducing a new concept: the turnover from 1 m2 per week is 150 euro and the turnover of fresh products is now equal to 55%.

Author: Irina Bolotova Photos: Jos De Vries The Retail Company

Since many years Jos de Vries The Retail Company is a well-known organisation in the retail business. We are specialised in analyzing, designing and realizing shop concepts all over Europe. We know for a fact that the successful presentation of shops and products can not only bring about a positive image but also achieve above-average successes. Check our website www.josdevries.eu or contact Maurice van der Kooij (m.vanderkooij@josdevries.eu) for further information.