MILLBROOK FORMS THIRD-PARTY SERVICE ARM

CHRISTINA VEIDERS

LEICESTER, Mass. -- Millbrook Distribution Services here has formed a separate division, Millbrook Retail Solutions, to provide retail merchandising services. In doing so, the nonfood distributor will enter the growing field of third-party companies that offer value-added services to retailers and manufacturers. It will go up against PIA Merchandising Services and Pimms in vying for the estimated $1 billion generated by third-party outsourcing.

"We think we'll be in the top three-to-five of industry market share in three years," said Fred King, general manager of the division.

Services provided by Millbrook's Retail Solutions group include shelf management and in-store services, such as resets, product launches and order-writing. In addition, the division offers sales promotion assistance, display set-up and maintenance, planogram development and financial analysis, and retail pricing audits.

Millbrook had been providing these services, but only through the retailers it serves through distribution. It will now begin to unbundle in-store services for the entire retail community. "We're now beginning to sell our retail services and shelf- management services as a separate value-added product," King said.

"The services we are providing through Retail Solutions are pretty generic to the retail industry. Yes, we are going after other channels," he added.

What will distinguish Millbrook over others in the industry is the quality of its labor force and its investment in technology, said King.

"Traditionally, the third-party merchandiser has relied on temporary and outsourced labor. Our intention is to use Millbrook employees exclusively. It will give us higher quality and we'll have less turnover and more continuity in our workforce," King stated.

Millbrook also has invested in accounting and scheduling software, as well as a sophisticated interactive voice-response system that will allow the division to report and track projects.

"We are investing in state-of-the-art technology to be able to communicate in a real-time fashion with our clients. The ability to know exactly where you are at any time on a specific project, we believe, is the most important criterion to our clients," King said.

He sees consolidation taking place over the next few years in the service sector, especially among the smaller regional players.

"We think there will be significant consolidation. If you look at all the technology I described, the cost of entry in this industry is going to get higher."