P&G EXPANDS SDI PROGRAM TO WHOLESALERS, INDEPENDENTS

DAVID MERREFIELD

CINCINNATI -- In a bid to further its learning, Procter & Gamble Co. here intends to expand its Store Development Initiative into new geography and -- for the first time -- institute the program with wholesalers and wholesaler-supplied retailers.

Among SDI's key objectives are to reduce out-of-stock conditions and to provide an alternative to the tradition of P&G's provision of in-store labor for resets and remodels.

As was reported earlier, P&G initiated SDI July 1 with retailers in Arizona and Corpus Christi, Texas. The objective of SDI is to provide an incentive to retailers for take ownership of the systems and processes that can drive improved retail store conditions, Lou Fentress, P&G's director of North America customer retail operations, told SN last week.

Specifically, the initiative provides a variety of diagnostic tools which allow P&G's retail customers to benchmark their processes against those of other retailers, and to improve them. The tools include 27 solution sets which provide abilities such as forecasting product demand and a scan-triggered check which ensures that product shipped actually makes its way to retailers' shelves.

As a feature of the initiative, P&G deploys funds which were previously spent on retail support, and on P&G in-store labor, into an incentive fund intended to promote retailer participation. P&G will continue its usual levels of retail coverage, even though the aim is to attenuate the manufacturer's shelf work.

Gretchen Briscoe, P&G's specialist, corporate communications, said last week that P&G would move the SDI initiative into North Dakota, South Dakota and Minnesota, effective Oct. 1., and will partner with wholesalers Supervalu, Minneapolis; Nash Finch Co. Minneapolis, and Fairway Foods, Bloomington, Minn.

"We really want to gain additional experience and learning by working with wholesalers and wholesaler-supplied retailers," she said.

Working with wholesalers will introduce a new level of complexity into the situation, Fentress said, since in some instances wholesalers will have to help retailers execute against the plan, or, in the instance of more sophisticated retailing entities, determine how to flow funds through to retail level.

And, through the entire process is the likelihood that a host of different information systems will come into play. Even in instances where retailers and wholesalers have integrated systems, the same retailer may have a separate system for store-level support.

"The idea is to improve conditions for wholesaler-supplied retailers by developing systems which work for both wholesalers and retailers," said Fentress. "The key point is that, as compared to a chain headquarters that presumably has common systems throughout, the wholesaler-supplied system may have different systems. Even retailers that are hooked to their wholesaler may have different systems at store level."

Asked if it's P&G's intention to make the incentive fund self-liquidating by virtue of its eventual success, Fentress said the current plan is to keep spending at traditional levels.

"We haven't got far enough to determine what the eventual outcome will be, but these are systems that won't ride without training wheels for a long time to come," said Fentress. "We are simply reallocating the retail fund into this new activity. Our spending level remains constant."

As for the overall success of the SDI initiative to date, Fentress said it's still too early to assess the program because data on the initial rollout hasn't been sufficiently collected and evaluated.

"The further rollout of the initiative indicates mainly that more learning is needed," he said.