Consumer Products, Retail and Distribution

the way we do it

Retail Transformation: Driving Cost Reduction

Capgemini's comprehensive Retail Transformation approach helps companies reduce SG&A costs and build the capacity to invest for future growth.
Addressing the Challenges of a Changing Landscape

processes, Capgemini will reduce SG&A costs. We integrate four retail practice offerings: store operations, finance transformation, retail merchandising and supply chain. The recent integration of these four offerings into our Retail Transformation program has created interest among those companies under competitive stress from value retailers. Capgeminis approach entails elements from several of our transformation methodologies:
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Retailers today face a difficult marketplace, characterized by overcapacity and the rapid growth of value retailers, including mass merchandisers, club stores and dollar stores. At the same time, the industry has become increasingly complex, with multiple channels, formats, operating regions, banners, tiered offerings, assortment density, micromarketing and so on. This has placed considerable stress on many companies Selling, General and Administrative (SG&A) costs.
The Way We Do It: Retail Transformation

We believe one way success in the retail industry can be achieved is through a transformational approach. Capgeminis comprehensive and proven Retail Transformation methodology helps retailers achieve significant and sustained improvements in their cost structure. Capgemini analyzes and then attacks the problem from a process perspective. Through key changes in a companys

Model Store, which involves validating and implementing relevant best practices in one store and then rolling them out through Learning Center stores before ultimate rollout across the chain. Financial Transformation, which examines design and performance of all support and administrative

functions, addressing such factors as division of work, reporting relationships, span of control, performance measurement and organization structure.
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Accelerated Solutions Environment (ASE), which drives companies toward collaborative solutions and ensures buy-in within a compressed time frame. Low Cost Pursuit, Capgeminis signature value-measurement approach, which ensures that the projected value derived from the transformation initiatives materializes in the companys operating statements.

In Wave 2 (one year and more) the company implements major tactical and structural changes. Further down the line the company can assess its progress and decide to increase its bps goal and also conduct a second ASE.
Building the Capacity to Invest

advantage of our business and technology skills, rapid delivery, collaborative approach and ability to design business strategies. These critical assets can help retailers succeed in todays complex environment.

We use tools such as a value scorecard, validated by live P&Ls, to keep the focus on results. Most importantly, our formalized knowledge transfer process facilitates our clients ability to sustain results, maintain ownership and thrive on their own once we are gone.
From Zero to Results in 10 Weeks

Let Capgeminis highly trained and experienced consultants step in to streamline your processes and increase your profits using our Retail Transformation approach. To achieve results, we ask for a 100% percent leadership commitment to this fast-paced, action- and goal-oriented process, taking into account key operational considerations.
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Attributes of the Retail Transformation Approach

Capgeminis Retail Transformation program is different from most other approaches to cost reduction.
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Expert-based: Staffed with a high density of experienced consultants (vs. traditional consulting pyramid). Rapid: -Ten weeks from start to initial results. -Minimizes time for management to study a good idea until it becomes a bad idea. Bias toward actions that generate measurable results: How much? How sure? How soon? Collaborative: Ensures rapid transfers of program ownership to client leadership. Comprehensive: Scalable to cover every dollar spent. Financial orientation: Rigorous measurement system helps ensure that results actually carry over to the financial statements.

What will you give up first?

Are you ready for the number of your direct reports and the extent of your departments to be reduced? You cannot overthink the required changes or you will lose the advantage of speed. A significant communication effort is required, both internal and external. A Retail Transformation initiative needs to be the focus for its duration, although existing initiatives can be consolidated under this program management umbrella. Capgeminis Retail Transformation program takes

Capgemini helps retailers achieve initial results in 10 weeks following the inception of the Retail Transformation program. Week 1: We provide a basic introduction to the program, and begin to narrow the focus down to specifics. Weeks 2-4: Working with various departments we rapidly identify and prioritize key opportunities for cost reduction and gain the consensus and commitment of all those involved in the cost-reduction process. Weeks 5-6: While continuing to identify improvement areas we begin to create and prioritize initiatives that will achieve the desired, long-term results. Weeks 7-8: Having set specific goals we will prepare a project management foundation for the implementation of the prioritized initiatives using our unique Accelerated Solutions Environment (ASE). An ASE brings together the stakeholders, staff, members of the leadership team, key suppliers, customers and subject matter specialists to unleash the full potential and creativity of all involved. Weeks 9-10: In the final two weeks a program definition is drawn up with a measurable goal of specific basis points (bps) of SG&A cost reduction, and implementation begins. Following Week 10, implementation comes in two waves. In Wave 1 (60 to 90 days) the company creates quick hits and maintains rigorous value tracking, constantly measuring results and asking questions such as: How much? How sure? How soon?

About Capgemini and the Collaborative Business Experience

Capgemini, one of the worlds foremost providers of Consulting, Technology and Outsourcing services, has a unique way of working with its clients, called the Collaborative Business Experience. Backed by over three decades of industry and service experience, the Collaborative Business Experience is designed to help our clients achieve better, faster, more sustainable results through seamless access to our network of world-leading technology partners and collaboration-focused methods and tools.
David Krause, Principal North American Retail Practice 404-806-5014 (office) David.Krause@capgemini.com Dan Rostratter, VP North American Retail Practice 312-395-5808 (office) Daniel.Rostratter@capgemini.com
2005 Capgemini. No part of this document may be modified, deleted or expanded by any process or means without prior written permission from Capgemini.

Through commitment to mutual success and the achievement of tangible value, we help businesses implement growth strategies, leverage technology, and thrive through the power of collaboration. Capgemini employs approximately 60,000 people worldwide and reported 2004 global revenues of 6.3 billion euros. More information about our services, offices and research is available at
www.capgemini.com
Rick Marino, VP North American Consumer Products and Retail Practice 973-447-2275 (office) Rick.Marino@capgemini.com