SPARTAN TO DROP-SHIP SOME NONFOOD ITEMS

JOEL ELSON

GRAND RAPIDS, Mich. -- Spartan Stores will begin a drop-ship program next month to assure that its 500 retail members receive timely deliveries of key merchandise categories that are subject to fashion-trend influences.

General merchandise categories slated for drop-shipping are kitchen domestics, gadgets, socks and underwear, and licensed children's housewares.

With this move the 500-store cooperative hopes to boost profits and reverse the sluggish sales it has experienced in general merchandise. Items will be drop-shipped and billed centrally.

The move also is being made to rebuild the retailers' image for general merchandise and to stay competitive with alternative formats, especially in selling hot licensed goods.

The revised shipping method "will ensure that the most recent product introductions will reach retailers much faster than going through the warehouse," said Duane Nizinski, Spartan's manager of general merchandise and purchasing.

Although merchandise selected for drop-shipping will bypass the Spartan warehouse, Spartan will continue to warehouse staples in the targeted categories.

Spartan has a general merchandise retailer advisory board composed of executives from several member retailers. The board began to focus "on ways of reversing sales downtrends by devising faster turnarounds of the hottest and newest products, colors and styles that retailers need to effectively compete against the other trade classes," said Nizinski.

During the past several

months Spartan's buyers have worked with Spartan's general merchandise retailer advisory board in identifying the general merchandise categories that are especially crucial to creating a strong shopper impression. "Retailers are working closely with Spartan buyers to offer the latest colors, styles, range of new products and trends, and get them to the shelf in a timely fashion to compete with the other classes of trade getting the sales," said Peggy Wilk, nonfood coordinator at Ashcraft Markets in Alma, Mich., and a member of Spartan's general merchandise advisory board.

Wilk explained that the warehouse worked down its inventory before placing new orders, and therefore, it might take six to eight months before orders were received at retail.

"Rather than waiting until the basic product inventory at the Spartan warehouse works down, Spartan will arrange for the newer products or colors on the market to drop-ship to retailers so that we can have them at stores as quickly as the mass merchandisers," said Wilk. She added that retailers also need to be quicker on licensed products such as in children's dishware. "We must offer [licensed products] while they're still hot," Wilk said. "We need to be quicker with themed products like 'The Lion King' rather than getting [such products] six to eight months after the movie or video is out." Wilk said, although retailers knew last year that "The Lion King" was coming out in June and what Disney intended to spend and how big it was going to be, they failed to have related licensed products at retail by June.

"Some licensed items for that movie were ordered in May but a lot of stuff could have been pre-booked at the January Housewares Show," she said. "From here on, though, when the movie breaks, we want to have the licensed items ready in stores.

"We've had 'Dalmatians' and 'Beauty and the Beast' children's licensed products and premiums, but it's always been after our competition like Wal-Mart and Kmart have already had them out. Having these items sooner will only make us look better," she added. Sales of kitchen domestics and gadgets have fallen for Spartan retailers, noted Nizinski. "We were still carrying things like syrup pourers and dispensers in the warehouse, and some stores stocked them despite the fact that people don't buy these items anymore, now that syrup is being packaged in squeeze bottles," he said.

"What we really needed was to take a fresh look at the products shoppers want, like garlic presses. This involves updating gadgets with the kinds of trendy items that reflect what consumers seek and expect to find," said Nizinski.

Bypassing the Spartan depot with items being dropped-shipped "allows us to keep costs and retails down to grab that impulse shopper, which is very important in these high-impulse items at supermarkets," said Nizinski. Now that kitchen domestics, socks and underwear are in the drop-ship program, retailers have begun to set up new sections, Nizinski noted. He said some retailers that previously pulled out of soft goods have decided to put back a family sock-and-underwear section. These new departments will range up to 12-foot-wide sections and offer merchandise at prices competitive with other classes of trade. Rather than expand department sizes to add general merchandise categories, retailers will accommodate the new range of items within existing section configurations, said Wilk.