Category Management RFI 20120906 Updated.docx

Request For Information (RFI)

Consulting Services for Category Management

Background

The Exchange (formerly Army and Air Force Exchange Service) –– now in its second century of service –– remains committed to its dual mission of providing quality merchandise and services to military families worldwide and generating earnings to supplement military Morale, Welfare and Recreation (MWR) programs.

The Exchange is a joint military activity providing quality merchandise and services to active duty, guard and reserve members, military retirees and their families at competitively low prices.

The Exchange operates more than 3,100 facilities worldwide, in more than 30 countries, five U.S. territories and 50 states. The Exchange operates some 174 main stores and more than 1,300 fast-food restaurants, such as Taco Bell, Burger King, Popeyes and Cinnabon. The Exchange also provides military communities with convenience, specialty stores and movie theaters on installations worldwide, including locations in Operation Enduring Freedom and Operation New Dawn.

Scope

The Army and Air Force Exchange Service (Exchange) has a requirement for consulting services for the training and development of Category Management processes. The Exchange has embraced category management as the ‘best practice’ merchandising planning process to optimize its volume and profit via superior value creation for its shopper base. Relevant company personnel have received high level training on the theory of category management but no practical hands on training applying real data to real category plans. Most recently, an internal team was formed to develop and deploy a comprehensive Category Management capability across the entire Exchange store base.

The desired outcome of this engagement is a trained category management department that can consistently develop and deploy merchandising plans which optimize volume and profit across the Exchange’s diverse shopper, category and retail store environment. The new internal team has identified some immediate foundational requirements to start towards the desired outcome. These foundational requirements involve two broad needs:

1. Developing a total store space and individual item optimization capability.

2. Training the Exchange category management leadership team in the practical application of data into the theoretical framework of category management to which they have been exposed. Restated, helping the Exchange category management team move the organization from theory to practice in a difficult data environment. For example, demonstrating how to develop category decision trees and category roles for Exchange categories.

These two needs are complementary. They require both a deep knowledge of category management theory and practice as well as sophisticated software enabled approaches to total store and item assortment optimization.

Objective

The objective of this project is to identify the unique challenges in organizational training, insight development and processes that need to be addressed as the Exchange moves toward broad deployment of an optimized category management capability. Also, demonstrate to Exchange management what an optimized space and item assortment capability can mean to the organization with state of the art software and best practice category management principles.

Please respond to the following by explaining your qualifications and approach:

1. How is your organization uniquely qualified to provide and/or develop store space optimization processes to support retail stores representative of Exchange predominant format type?

2. How is your organization uniquely qualified to provide and/or develop a Category role approach with a special focus on:

· Identifying ‘destination’ categories important to Exchange differentiation in the competitive environment

· Identification of Role development principles and identifying category roles for all Exchange categories (i.e. identifying destination, convenience, routine and seasonal categories)

3. How is your organization uniquely qualified to identify and summarize critical internal foundational data on:

· Shopper attitudes and behaviors

· Relevant data available to the Exchange for Category Management

· Providing recommendations in data-rich and data-poor categories

4. How is your organization uniquely qualified to provide training to the Exchange Category Management team on:

· Category role development

· Data acquisition

· Insight development

· Space optimization and category management deployment/training plan

5. From previous space optimization and category management engagements, provide your organization’s approach and samples for the following:

· Future state (ToBe) process models

· Business Requirements for a space optimization solution

· Business Case

· Identification of implications for the retailer’s key performance metrics (e.g. inventory, sales volume, gross profit).

· Review of data issues relevant to space optimization and/or category management

· Consumers insights developed as a result of the engagement

· Space optimization and category management process deployment plan

· Development of a category review process and a process for identifying category roles for any new categories added in the future

Please identify if your space optimization/category management engagements require a proprietary software tool or the purchase of a software application.

For this response, a software “tool” is defined as: A program that helps the user analyze or search for data. For example, query and report programs are often called query tools and report tools. The use of a tool would not require the purchase of a software license to operate. For example, a model built utilizing Microsoft Excel would be consider a tool as no new additional software licenses would need to be purchased.

For this response, a software “application” is defined as: Software intended for business staff to execute business transactions. An application would require the purchase of additional licenses to operate and is commonly referred to as Commercial Off-the-Shelf (COTS) packages.

6. Please identify if your organization is a partner with, or authorized reseller of, a commercially available software application to execute the space optimization/category management processes. If yes, please list the software and the affiliation.

7. How many and who were the retail businesses you have conducted this type of consulting services for in the last five years?

8. Is your business capable of performing category management consulting services without the help of a third party?

9. Is your business capable of performing consulting services without using a software application or tool?

10. What is your companies' primary business type (consulting or IT products and services) as would it would appear in a Dunn and Bradstreet company profile?

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