ESTEE SORTS ITEMS USING STORE-BY-STORE DATA

LISA A. TIBBITTS

PARSIPPANY, N.J. -- Estee Corp. here is micromanaging its lines at some chains on a store-by-store basis in a bid to help supermarkets boost sales of dietetic candies and other foods for restricted diets.

The company uses a category management system to rank products by sales, weed out slow movers and correct out-of-stock problems with popular items through better distribution. The system's information is based on census data gathered from scanners at individual stores. It was created by Information Resources Inc., Chicago.

Analysis of the data revealed that some products, such as salted pretzels, were not being widely distributed, but once they did hit the shelves, they sold very well. Other products with good distribution did not move at all, and the company was eventually buying them back.

"The challenge for us was to reposition those products that were not selling with the products that were selling, and kind of do that on the fly," Andrew Wertheim, Estee's vice president of marketing, told SN. "Just by doing this and retaining the same amount of shelf space, we're increasing the turn."

The system was first tested in all 208 Chicago-area locations of Jewel Food Stores. In a year's time, the Estee section revamp produced a 70% sales increase at Jewel, according to Wertheim. Estee tried the repositioning next at 101 Dominick's Finer Foods stores; Wertheim said sales are now up more than 140% at the chain. At Lucky Stores in California, Estee sales climbed 150% in the last 32 weeks, mainly due to increased distribution, Wertheim said.

The program, which Estee calls "sales conversion," also has been installed at Delchamps, Tops, Kroger, Publix, Food Lion and Schnuck. Wertheim said he expected Estee's overall sales to be up by 40% within the next three years.

To rank its products, Estee created a three-tier system, which allowed it to concentrate on fast-selling cookies and chocolate bars while cutting out items such as the slow-moving cake mixes and salad dressings.

"Tier I is, we have to have them on the shelf. Tier II is, they're important to our line but we're not focusing on them. Tier III is, let's find a way to get rid of them in a timely and logical way," Wertheim explained.

After examining reports provided to Estee by IRI, Estee's sales representatives present retailers with individualized marketing information, pointing out Estee's own slow-moving items and other problem products in the categories involved.

"We were able to trade off Tier III for Tier I items based upon [the store's] own information," Wertheim said. "While doing that, we said, 'Let us look at a whole category for you.' "

Wertheim said the supermarket dietary foods sections were suffering decreased sales due to category fragmentation and product duplication on shelves. The answer: "Instead of giving four places of shelf space to orange marmalades, do one or two and then get two other items, different types of items," he said.

Estee originally had "roughly 200" SKUs in the market. Using InfoScan Census data, it discovered that approximately 40% of its line did not sell well in-store. "We were spending a lot of money on products that were not moving fast. They were going out of the factory but they were not necessarily moving at retail," he said.

By the end of this year, Wertheim said the number of SKUs should be cut nearly in half.