7-Eleven Is Captain of 'Team Merchandising'

C-store king 7-Eleven wants product vendors who accept the fact that the chain is best suited to control its own merchandising plans."We're taking back responsibility for the store from suppliers," chief executive officer Jim Keyes told an industry group in February. In the past, when vendors (especially those with direct-store delivery) were allowed to dictate their own order levels, "we ended up selling real estate, not products," he said. Suppliers should understand the logic behind the chain's plan, which is possible because of 7-Eleven's focus on "enabling" technology, suggested Keyes. "We're more in tune with the consumer [because we're] so close to the customer every day," he said. Some suppliers have been fully supportive, and are cooperating on "Team Merchandising" initiatives that support the chain's "First, Best, Only" merchandising mantra. Others have been resistant to the change, although they shouldn't be, he admonished. The chain handles seven million transactions daily, which puts it in a unique position not only to accurately forecast store sales, but to help vendors identify shopping and lifestyle trends, said Keyes, speaking last month at Information Resources Inc.'s Reinventing CPG Summit in San Diego.The chain welcomes the opportunity to assist vendors in product testing, and is willing to actively participate in development -- even to the extreme of covering manufacturing costs, he said.Executives pushed "very, very hard" for the development of a Diet Pepsi Slurpee after "watching" (through sales data) kids heading for the Slurpee machine while their moms hit the cooler vault for diet sodas. (Pepsi finally relented in February 2004.)And they foresaw the Atkins trend two years ago when there was a spike in sales of beef jerky snacks to women and Miller Lite sales to weight-conscious beer drinkers. It has since been advising vendors to consider low-carb SKUs.As an example of successful chain-vendor collaboration, Keyes pointed to a Valentine's Day promotion called Fresh Bud, in which Anheuser-Busch adjusted its production schedule (and contracted for additional delivery trucks) so that all bottles stocked in 7-Eleven stores on Feb. 14 would have "born-on dates" of Feb. 13 or 14. The promotion was so successful that two-day Valentine's Day sales were equal to sales generated on Super Bowl weekend. The partners will conduct a similar promotion on April 15 for Tax Day.

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