MEIJER SIGNS NEW SUPPLIER, UPDATES ENTERTAINMENT SECTIONS

DAN ALAIMO

GRAND RAPIDS, Mich. -- In consolidating purchasing with a single distributor, Meijer has also gone with a more unified approach to merchandising entertainment software, such as CDs and videos, to achieve greater differentiation in a highly competitive market.

Meijer chose Alliance Entertainment Corp., Coral Springs, Fla., to be its single supplier last spring, and is due to complete a project of revamping the departments and putting in new signage this month, Mary Devon, merchandise manager, Meijer, told SN.

The new partnership is also enabling Meijer to move forward with two key strategies: "My Meijer, My Music," which keys on the retailer's and distributor's ability to react to local tastes for its stores; and "Get it First @ Meijer," reflecting the additional clout the retailer will have in dealing with the music and video companies in making sure that its customers can find the titles they want first at Meijer, according to Devon.

Previously, Meijer had two suppliers for its music products and, as a result, an inconsistent presentation from store to store. By consolidating with Alliance, the retailer will be able to "streamline operations and leverage our buying power," Devon said.

Alliance provides 100% of the distribution and merchandising of music products for Meijer, about 30% of the distribution of video products, and 80% of the merchandising services for video. Alliance's effort at Meijer is headed up by Michael Rigby, group vice president, vendor-managed inventory services, for the distributor.

"Their audio business is actually very, very significant, and we handle all their audio, as well as a number of the smaller movie studios at this time," Rigby said.

"The goal is to improve their growth in a way that invigorates that category in their stores to make it an exciting and eye-catching environment," he said.

The project that started in the spring involves revamping the assortments in all the stores -- cleaning them up and refreshing them, Rigby said. "We are rolling out entirely new signing packages for all the stores, and implementing a chainwide, consistent product presentation," he said.

The overall strategy is "Get it First @ Meijer," Devon said. "We are open 24/7, and we will use new releases to leverage ourselves in the marketplace." She acknowledged that Meijer meets competition on loss-leader pricing, but "it makes it very tough for all of us to compete."

"Alliance has the best technology for replenishment, and we believe we can now deliver what we call, 'My Meijer, My Music' to the guests," Devon said. She described this effort as "demographically relevant music," or put another way, store-specific selections.

Alliance uses handheld scanners to track inventory, which Rigby said is more precise than relying on point-of-sale data. "We have very sophisticated field scanner technology that carries the perpetual inventory of each of the stores and enables us to do weekly cycle counts so that the integrity of the inventory that we believe is in the store is accurate," he said.

"You are only as good as the data that you have to work with," he said.

Although Meijer operates large supercenters like the mass merchandisers, unlike them, the company came out of the grocery industry. "The culture at Meijer is much more of a grocery type of culture," said Rigby. "There is a sharp understanding of the impulse nature of the customer, the need for impactful presentation, and the cross-promotional opportunities. That's much more of a way of life at Meijer," he said.