As part of a broad strategic plan, True Value unveiled a new approach to merchandising and pricing during the Chicago-based co-op’s General Session in Denver.
One takeaway: expect fewer opening price points in the True Value assortments. “No one makes money on opening-price-point product,” said Ken Goodgame, True Value’s senior VP and chief merchandise officer.
“Offering a greater assortment of mid-price-point and higher-price-point products helps differentiate us from discount competitors, drives greater value for our customers and increases our retailers’ gross margin dollars,” he said.
Another step is to add regional buyers to improve the relevance of assortment and boost product productivity. The effort will be aided by Geo-Demographic Analysis, a new tool in the True Value box that measures trade-area dynamics.
“Previously, assortment choices were Basic, Expanded and Dominant -- or large, medium and small -- which ignored geographic requirements for our retailers,” Goodgame said. “So moving forward, we're adding assortments that meet the geographic needs of our consumers.” Among them are urban, suburban and rural assortments fine-tuned to the local markets.
Goodgame pointed to a plan for a four-point pricing strategy consisting of: everyday low pricing for highly sensitive SKUs; buy more and save; compare and save for national brands vs. private label brands; and, where appropriate, “Pro Packs.”
The EDLP portion of the strategy is currently being tested, he said, promising a full update at the co-op’s Spring Reunion.
Goodgame said True Value intends to build on its 2014 performance, which includes year-to-date increases in retail comparable store sales, up almost 4%; and co-op revenue, up 4.7%.
“In 2015, we are going all in and all out to ensure we have a differentiated and relevant merchandising strategy that will improve the quality and quantity of our assortments like never before,” he said.