RGIS is the UK market leader in stocktaking and asset optimisation solutions. The company has customers around the world in retail, healthcare, supply chain, industrial, automotive, aerospace and defence. RGIS operates in over 40 countries, and deploys local elite teams to meet customer needs, offering unsurpassed geographic coverage and unique tools and processes to ensure accuracy, reliability and efficiency.
RGIS’ grocery clients include Sainsbury’s, one of the largest retailers in the UK with over 1,000 stores. Sainsbury’s partnered with RGIS for its stocktaking management needs, and saw dramatic improvements in the accuracy of its data collection and in turn its product availability, all of which helped to increase profitability.
James Priestley, RGIS President for Europe Northeast, spoke to The Grocery Trader.
The Grocery Trader – James, what does your role as President for Europe Northeast involve from day to day?
My role as President for Europe Northeast essentially has two primary components: in the UK I am Managing Director. I also act as overall head of RGIS’ operations in Germany, Belgium and the Netherlands. From day to day my role is focused on accurate, reliable and efficient delivery to our customers.
GT – What is your business background? What were you doing before this?
I am lucky enough to have had an interesting and varied career. I was educated as a chemical engineer, and started my career at ICI. After my MBA I moved to Ford and then into general management at British Airways, and from there I moved to Tesco. My experience at Tesco heightened my appreciation for asset control and management, and the significant role rigorous inventory practices play. RGIS was the natural next step for me given the market opportunity and the leadership role that RGIS has rightly earned.
GT – Do you get personally involved with servicing major UK grocery customers?
Absolutely, from visiting counts in store, through to future strategy. Our business evolves with our customers, and so keeping close to them is critical for our success.
GT – Who heads up your UK retail team?
We have a well-established, cross-functional team. Sales is led by Simon Parry, our UK Sales Director and they partner with operations to ensure that our retail customers’ needs and objectives are unfailingly met.
GT – When was RGIS set up, and who by?
RGIS was founded in 1958 by Thomas J. Nicholson to offer grocery stores an accurate and efficient alternative to in-house inventories. Within a few years, its business expanded from the Midwest across the US. Now, RGIS is the global market leader in stocktaking and asset optimisation services.
While RGIS continues to develop its business – through innovation, investment, and dedication to delivering bottom-line results for its customers – it remains true to its origins in grocery, providing accurate and efficient services.
GT – Who owns RGIS now? How big is RGIS?
RGIS is privately held and is the global market leader, carrying out over 500,000 inventories a year. RGIS is headquartered in Auburn Hills, Michigan, and we deploy employees in over 40 countries, offering customers unsurpassed geographic coverage, and unique tools and processes to ensure accuracy, reliability and efficiency.
GT – How big are you in Europe?
Within Europe we operate in 10 countries and service the others remotely as required. In the UK we are the number 1 and have the widest coverage, with our head offices in Birmingham and 15 regional offices.
GT – How long have you been operating here?
An RGIS entity was formed in the UK in October 1999.
GT – Which industry sectors is RGIS active in here?
We cover all of retail – grocery, clothing, department stores, DIY, electronics, pharmacy. Other sectors include supply chain, industrial, automotive, aerospace and defence.
GT – What proportion of your UK business comes from multiple grocers?
Given RGIS’ heritage, a significant portion of our business comes from grocery. We work with all the major grocery chains. We also work with smaller grocery businesses, everyone from single stores to regional chains. We deliver appreciable benefits consistently across all customer types and sizes.
GT – What is your specific service proposition for grocery retailers?
Irrespective of offering, RGIS commits to delivering unrivalled accuracy through established processes and innovations to ensure our customers’ efficiency and meaningful results.
GT – How are you structured to service the needs of UK grocery retail customers?
Our teams are professional and trained and our processes ensure inventories are complete, accurate and efficient. We minimise rework and unnecessary time commitment, and given our unrivalled coverage with 15 regional offices, we can deploy those expert teams anywhere. This also controls costs for our customers. And we can expand easily to address spikes in demand. Finally, our technology is proprietary, cutting-edge, and innovative.
GT – What different services do you offer?
We offer our grocery and retail customers a number of services in support of optimising revenue, improving operations and controlling inventory assets. Our supply chain audits ensure transparency and control of assets in the appropriate and required locations; compliance audits ensure inventory is stored and moved according to any regulation or corporate standard; and store mapping provides definition of productive item location so revenue is optimised while stockouts and spoilage are controlled and minimised. Our service offering also includes data-driven insights, which support planning efforts and staffing solutions to augment expert teams. Our collected optimisation solutions are for organisations seeking to enhance the quality and cost-effectiveness of their business processes.
GT – Can you talk us through the services in this list that are particularly popular with UK supermarkets?
To begin with, we enter most relationships with inventory events: annual or seasonal inventories, and the other services depend on the individual customer’s challenges. For some, space optimisation is a mystery or a challenge, and we will introduce SmartSpace to those customers. For others, shrinkage is a challenge, and we have services to identify points of vulnerability and product at risk. For customers with a high degree of seasonal merchandise, we will provide store mapping services so that there is a clear definition across the footprint of item location and migration.
GT – For retailers who still insist on doing all this in-house, what are the benefits of outsourcing these core actions?
There are a number of challenges with in-house inventories: accuracy rate is limited, efficiency is low and operational disruption can be significant. All these factors decrease the value and applicability of results. Third party neutral objectivity is critical for recognising and acting on any contributor to compromise or poor performance.
RGIS delivers over 500,000 successful inventories every year. The sheer number, scope, and variation instill deep expertise in every member of our team, which is invaluable and cannot be duplicated.
An independent survey of 100 top UK retailers, conducted by Martec International (2011/12 Retail Fraud Survey), rated satisfaction with the stock counting process higher when outsourced versus in-house, and highest when outsourced to RGIS.
GT – What different compliance audits can you perform?
We have a number of different audit offerings, all to ensure compliance with planning definition. One of our key service offerings is ‘On Shelf Availability Audits’. These audits limit and eliminate out of stocks, and therefore ensure continual revenue from key categories. We also offer audits of promotional shelf edgers to ensure correct and optimal placement. Audits of POS signage and literature ensure that retail customers have the highly visible, key information.
GT – What technology do you offer?
RGIS’ technology is proprietary and developed by our dedicated team of expert engineers. Our technology streamlines the data collection process to increase efficiency and reduce errors.
It also allows us to identify and resolve exceptions immediately so that research and rework are mitigated. Transmission is real-time and encrypted so that data is always secure and protected, and with real-time data availability, customers can monitor progress within a store and across multiple locations.
GT – Can you tell us about your retail technologies Verify, VisualCount and SmartSpace, as mentioned on your web site? What does each of these do? Do you offer these technologies in the UK?
RGIS’ Verify™ service offers even greater inventory validation, including price verification, unique UPC or random item scans – all to ensure the highest level of inventory accuracy. Through the use of our proprietary technology, inventory counts are validated in real-time during the event, providing unparalleled visibility and transparency.
VisualCount™ enables monitoring of inventory status and data from any browser. This service is exclusive to RGIS as an inventory management tool that allows our customers to monitor RGIS’ inventory process from any location with an Internet connection. The dynamic offering provides a high level of insight as to progress, and saves our customers’ travel budgets.
Every retailer knows that managing space is critical to business success. SmartSpace is a completely integrated solution that defines, optimises, and analyses store layout from a 3-dimensional CAD-compatible layout. These layouts can be defined across all stores, or by region, or store model. This ensures consistency to design. With analysis, insight is derived to optimise merchandise performance, which increases profitability and limits underperformance. In 2012, RGIS is introducing new technology that will bring greater control, efficiency, and flexibility for our customers. We are very excited about this and look forward to introducing it to our clients.
GT – Where do you develop your technologies?
Ideas come from across our worldwide business. All our technologies are developed by our dedicated team of engineers, who partner with our seasoned inventory experts and together they successfully bring to fruition and implement technology that directly addresses our customer needs and enhances customer benefits.
GT – Is there a trend to using third-party inventory providers in the UK, and if so what’s driving it?
We have definitely seen a trend to increasing use of third party inventory providers in both the UK and other European markets. I suspect there are a number of drivers such as minimising shrinkage and fraud, improving shelf edge availability and improving efficiency. What is clear is that in this area, the need for impartial, efficient, and expert third-party providers is critical. As I have already mentioned, a major study by Martec International shows that retailers are more satisfied with RGIS counts, than their own in-house ones.
GT – How do you charge for your services? How do the costs of using RGIS personnel to perform the inventory work compare with using in-house people?
RGIS’ pricing is ultimately defined by the detail, complexity, and scope of the effort. We always work with our customers to ensure that we represent value for money.
It is difficult to directly compare the cost of in-house inventories. There are so many additional factors to weigh: operational disruptions when resources are removed from their jobs to conduct inventory, error rates are always higher with in-house teams, efficiency is typically compromised, and of course having a neutral third party to assess is invaluable.
It’s not simply a direct payroll:cost comparison, there is always an incremental cost with an in-house inventory. When stores have to close for inventory, for example, there is a loss of revenue. Who is serving the customer while employees are conducting stock counts? Many retailers feel that when you look at the total cost, in-house is too expensive. That’s why they’ve chosen to outsource the stocktaking function to RGIS.
GT – How does the UK stand out as a market for your services?
The UK is a very important market for us. The retailers are dynamic and exciting to work with, which means there’s greater acceptance and appreciation for our services. And we’re also able to focus on our enhancements: SmartSpace, Verify, VisualCount, and our imminent launch of some new technology, as I mentioned earlier.
GT – Can you tell us about your work for Sainsbury’s? What improvements in product shrinkage and in store product availability did you achieve?
We worked with Sainsbury’s to create a customised system comprising actual inventory procedures and pre- and post-inventory processes. The introduction of neutral, third party perspective and expertise proved invaluable almost immediately.
In the beginning of its partnership with RGIS, Sainsbury’s acquired real-time reports of inventory shrinkage rates broken down by store, department, and product. Customised specific loss prevention procedures were based on actual store-level data.
Among the more visible results, in 2011 Sainsbury’s was ranked #1 in The Grocer magazine for “Best Product Availability.” Sainsbury’s also increased its overall ‘product-to-shelf’ rate, and the greater control of assets translated to improvement in shrinkage. RGIS’ services accounted for $1.7 billion in stock over the course of 1,300 inventory audits.
GT – Can you model the likely improvements for customers based on their data?
Yes, given adequate data, we can typically project improvements for each customer through our structured process. That way, they can make informed decisions about services, investment, and return from the outset.
GT – Do you have a self-assessment questionnaire for retailers to work out if they stand to benefit from your services?
We do offer a survey, which highlights areas for potential improvement. Again, this ensures our customers can appreciate and compare the value of our services.
GT – What are you doing to promote your services? Are you attending any trade events this year?
A lot of our business comes from word of mouth and referrals from our existing customers, so we will continue to promote our services by doing an excellent job for our existing customers. In terms of trade events we plan to attend the Retail Fraud Conference again in 2012.
GT – What effect has the recession had on demand for your services?
That is an interesting question! Overall, we are seeing a positive growth in demand for stock checking and stocktaking, fuelled by the drive for greater efficiency and focus on shrinkage. My sense is that the recession has made the market more open to looking at alternative methods, if they can deliver proven benefits.
GT – Finally, where do you see RGIS going from here?
I see us growing successfully with our customers. We are very focused on excelling in what we do, and this will continue as we listen to our customers, ensure that we deliver value for them, and are accurate, reliable and efficient.
RGIS UK
Tel: 01926 888882 (Birmingham head office)
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