"The main target is to build more relevant assortments"

00:00:00: Imagine you could build a new business, not from scratch but from something that is already there.

00:00:06: You take an existing assortment dozen of countries thousand products complex supply chains and say let's completely rethink the whole thing more centralized faster More efficient above all scalable.

00:00:19: And thats exactly what happening right now at Metro in the non-food sector.

00:00:24: The project behind it has quite fitting name Stella.

00:00:29: Today we are talking about how pots and pans are becoming a strategic growth driver, And why this transformation is much bigger than it seems at first glance.

00:00:38: So let's get started!

00:00:40: Here we go.

00:00:53: Last financial year Metro generated more then two billion euros in sales from non-food products alone And now Metro is aiming for the stars and giving this category a comprehensive upgrade.

00:01:05: With a completely revamped end-to-end multi channel approach, eighty percent of our non-forged products are to be sourced centrally in all metro countries in future – find out how it's achieved!

00:01:18: And what Golds, The so called Stellar Project aims achieve?

00:01:22: In this episode more podcast holdsale to the max.

00:01:28: A warm welcome to all of you, dear colleagues.

00:01:30: I am Bernd Reuter from Global Internal Communications at Metro AG and responsible for this podcast about Metro's score strategy.

00:01:39: My guest today joined the metro group in two thousand twelve at Real Hypermarkets And quickly took on responsibility For international non-food sourcing.

00:01:48: In twenty fourteen he moved To Metro Sourcing International where He shaped our global procurement structures And drove innovation in Asia & Europe.

00:01:58: Following further leadership roles at Metro Hungary and Metro Markets, he has been since the year of our senior vice president Global Non-Food at Metro AG.

00:02:08: I warmly welcome Alexi Modellon!

00:02:10: Hi Bernt, hello.

00:02:11: nice to meet you.

00:02:12: Great to have you here Alexi.

00:02:14: as i said before You bring with us your experience in a long international career.

00:02:20: which of many experiences helps you most today?

00:02:25: I think starting probably from the first one, because i started in Germany in nineteen ninety four.

00:02:32: So come back now to Germany and then along my career have been working on food and non-food.

00:02:40: but the first experience was a non-food operation in France or Paris where I was division head for hard goods products And as you mentioned adding also quite some non-foot offer management role in different countries, having been staying more than eighteen years in Asia and more than twelve years in Europe now.

00:03:05: And of course sourcing on top.

00:03:08: that supports a lot the roles I have today because i am overseeing the sourcing offices And then of course the metro market, because as you know non-foods everywhere.

00:03:19: You need to be present online and the role I had in Metro Market as commercial director was very much shaping also what i'm doing today into the Stellar implementation.

00:03:31: These are certainly also experiences and qualities that will help you successfully implement Metro's Non-Food Transformation – The so called Stellar Project.

00:03:41: That's what we are talking about in this episode today, especially the implementation of Stellar is all-about.

00:03:47: We're discussing Metro's new core assortment for professional products and also the underlying objectives of the Stellar project!

00:03:57: And as every episode I will ask you LXC our questions on the Metro fundamentals to find out even more personally.

00:04:06: We are really looking forward to your sounds veneer at the end of this episode.

00:04:14: Alexi, before we talk about these stellar implementation days that took place a few weeks ago and marked very important milestone in Metro's non-food transformation let start with a few basics especially for everyone at Metro & Macro who isn't so closely involved with our non food business.

00:04:32: So maybe you could briefly outline which common sourced products are we mainly talking about when it comes to the non-food assortment?

00:04:41: So, non food.

00:04:42: I mean yes you're right that term sometimes looks a bit weird but to explain non foods We talk really about KCT so kitchen cooking table and here we talked really about product like Equipment Kitchen But also cooking but also preparing but also serving.

00:04:58: And that's very important because, for example during the Stellar Days we could show a full equipped pizzeria only without our Metro professional products and dish solution.

00:05:09: But it is not just KCT kitchen cooking table but also seasonal.

00:05:13: so what do you call outdoor barbecue?

00:05:16: As well as business home care, with for example cleaning and then offices.

00:05:21: With some examples papers or chairs and product like that.

00:05:25: so thats the overall non-food which we talk about.

00:05:29: Yeah and also frying pans is right?

00:05:32: Exactly!

00:05:32: Frying pan into cooking yeah exactly very strong category in metro.

00:05:36: why I'm asking?

00:05:38: because this frying pan A range is a good example of what's going to change with Stella and the category management for the non-foot buyers in the countries, right?

00:05:48: Exactly.

00:05:48: Because before I would say we had already a non food transformation ongoing starting around four years ago And was set up The first core assortment With targets that all country will buy.

00:06:03: at core assorts now always The Stellar, we have basically defined a full assortment available for countries with different sizes.

00:06:13: So small medium and large size stores And of course, we look into FSD and also Multi-Channel.

00:06:20: That's all so important.

00:06:21: but what is changing for frying pan.

00:06:23: Is that now we say exactly how many items should be in a small stores?

00:06:27: How many item should be medium stores or how many item to be in the last store ?

00:06:33: Then if you have a small store with enough space You can always put more items.

00:06:38: We give indications on all common sourcing products and on brands, because we have also common sourcing brand.

00:06:45: And then there is of course the flexibility with a twenty percent local brand by countries Because our customers need also brands which are also popular.

00:06:55: So this standardization of these frying pans modules shows already some good results for the Stella project.

00:07:05: What other targets are you aiming for?

00:07:07: For example, also in terms of sourcing or supply chain.

00:07:10: Yeah very good point because of course assortment is one but we're looking into much more cox improvement.

00:07:16: that's always a centralization buying more together.

00:07:19: We look at coxing and packaging as well improving the USP find better products and also product upgrade, because it's not only improving prices but can be having a better product with similar price.

00:07:36: A better item to fit even our customer needs as the chef of course need some great products for example every day.

00:07:44: But in sourcing we are looking into diversification.

00:07:47: What does it mean diversification?

00:07:49: We have, of course a lot of factory in China but we also found for Pants the example you gave before.

00:07:55: Very strong factory very good factory in Vietnam and this is helping to diversify our ranges because they can support when there are some issues with delivery to find quickly solutions like that.

00:08:09: one case just to quote that a factory of burning pace in Turkey had the whole factory burned we could find very quickly a replacement factory from a supplier based in Austria.

00:08:22: So that was showing, let's say our reactivity Aureka brands or aureka favorite brands from our customers that we will negotiate all together as a group.

00:08:40: And here of course, We can bring a few synergies out of it in terms Of cox improvement but also simplification of the route to market.

00:08:49: You already talked a little bit about the stellar implementation days and following their intensive preparations What exactly does this starting phase so there's kickoff?

00:09:01: Also with event look like in concrete terms.

00:09:04: So I think it was really a great event, we were more than two hundred colleagues of non-food community Metromarket and Metro AG and very different organization from Metro AG there And i would say that the first day started all together in plenary session where we kicked off altogether the achievements that have been able to do already during one year of implementation, and also defining what are next steps.

00:09:37: What need further implement to accelerate Stellar.

00:09:41: And it was followed by showroom visits.

00:09:44: We had great showrooms visit because honestly in our showroom fantastic products.

00:09:52: We have also a great team spirit and we could feel that the synergy between countries, and the center team was completely alive to provide solutions for our professional customers.

00:10:04: so it really is an amazing event!

00:10:06: And we did not stop to show them.

00:10:08: visit and product solution but also inspired from leadership summit as well as breakout session.

00:10:15: So at the end of day four breakout sessions where each category manager, head of OMD and other colleagues could join two of them.

00:10:25: And they were on topics like multi-channel how to live the multi channel?

00:10:30: And sales gross How To Drive Sales Gross in non food or how to manage performance Or also how to better forecast and guarantee availability.

00:10:40: So we had really a good spirit.

00:10:43: We got very good feedback from countries during those days a bit of relaxing time with barbecue on the first day evening.

00:10:52: So it was really great event showing one team spirit we have in our non-food community.

00:10:59: But this is just kickoff for the whole Stellar thing, what are next steps and ongoing Stellar implementation?

00:11:07: As Partly mentioned.

00:11:08: I mean that's very important because today we need to grow more ourselves implement our assortment.

00:11:17: We just shared with all countries the modules, so the modules are in all categories.

00:11:22: you spoke about the frying pan before but we've also just shared all the module's small medium size large sized door.

00:11:29: and now we need to continue activating an implement same for common sourcing brands ,we need to also implement and extend the assortments.

00:11:39: And then there is a lot of focus on sales activation the sales activation booster we can put in place.

00:11:46: So of course, we have a sales challenge and deals that was created already two or three years ago but reinforced the deal's mechanic.

00:11:54: And then we also have sales activation material for multi-channel meaning from start to sell force through social media online that were put into place with some mandatory kit there.

00:12:07: Then we've got training which is very important because a lot of colleagues that are in connection with non-food, but sometimes they don't know all how to sell non- food.

00:12:18: So we want also to reinforce training to equip better people to sell.

00:12:22: Then directly stick was this topic because everybody knows it in the year of AlterFresh where there for the first time two global food sales challenges... But that doesn't mean that there isn't an non-food challenge as well!

00:12:39: What have you planned?

00:12:40: Yeah, I brought a gastro and mixer.

00:12:42: The ones that we're going to have in September as it says challenge And that will be a fantastic hit on the market because basically countries multi-channel commit forty eight thousand pieces during that time During one month too To reach our customers.

00:12:59: and this item i would say is a metroprofessional item for sure Is a Gastro and Mixer But it's not the most sophisticated one, is a very good model with capacity up to eight liters.

00:13:11: With some very good speed and he's not too heavy.

00:13:14: so that really are nice items I'm sure will be also big success And we'll reach lot of kitchen.

00:13:22: Yeah maybe you hear in background.

00:13:24: so Alexi brought The mixer here...

00:13:27: I won't make demonstration there!

00:13:31: But we can see it here in our little podcast studio, so yeah.

00:13:34: It's a bit larger than what you use normally at home but of course that is the professional one.

00:13:40: Do you think you could repeat success with sales challenge?

00:13:45: In the past was there deep fryer for example I would

00:13:47: say since the beginning and very successful with sales challenges.

00:13:54: And I'm pretty sure that this item, being really fitting with a lot of customer needs will also reach for sure the targets that country achieve.

00:14:04: and i hope we'll have three great countries winning prices in place.

00:14:11: What measures are you taking to support the sale of these non-food products?

00:14:19: quite some basic things like let's have a catalog.

00:14:23: So we have catalogs, I brought also one catalogue the latest one for Tableware which is also remarkable.

00:14:29: but i think it's very important that Salesforce on their iPad or even better printed in their car has a catalogue because we know there are powers of showing an assortment to customers.

00:14:40: so this is one.

00:14:41: then we did also for plates what they call selling boxes where you could display samples of the plates metroprofessional to sell better to our customers so that they can look, touch and feel.

00:14:52: And in the Stellar days we presented also a cutlery bag.

00:14:56: So this will be I think next it was very well-perceived from countries That sells force when they want to sell cutleries which is not always easy.

00:15:04: then they can show samples.

00:15:06: This is an important catalogue tool for selling better showing sample but also videos.

00:15:11: We did lots together with on brand & communication team videos and we'll accelerate that.

00:15:20: With AI, with the support of AI and GSC We will further implement it because we believe It's very important to have a short briefing one minute for Salesforce or selling team To know what are key unique selling points.

00:15:36: So thats in a nutshell And our showroom tool to equip better our sales force and people in store too sell better.

00:15:53: You have been also in our showroom, right?

00:15:54: Yes it was

00:15:55: really great.

00:15:55: yes now that we've discussed the initial successes of the non-food transformation let's focus on our metro fundamentals for a while because among other things they state efficiency over beauty from complexity to simplicity for the changes in non-food.

00:16:21: What relevance our fundamentals have, for non food?

00:16:24: In particular... For you Alexi!

00:16:26: We will find out now and as always I'll ask five questions from our fundamentals questionnaire.

00:16:33: Are you ready for that?

00:16:34: Yes

00:16:34: of course!

00:16:35: Alright.

00:16:36: then here we go with a first question Which one is your favourite?

00:16:45: I will cheat a bit because my favorite one is process king, speed matters.

00:16:50: Results count but i have to add one more as without one team fundamental nothing is possible.

00:16:56: so... ...i cheat a little bit cause i put two fundamentals.. ..but i like very much the combination of both.

00:17:02: Berndt.

00:17:02: Yeah

00:17:03: absolutely okay.

00:17:05: Where in your working environment do you think simplification is most needed?

00:17:10: Clearly an IT system.

00:17:12: As for stellar implementation, we need master data and for supply channels.

00:17:17: So IT system harmonization is key.

00:17:20: so I think there are already a lot of things ongoing and kudos to the IT colleagues but we need even more yeah?

00:17:28: Then let's go step further.

00:17:30: what would you like to abolish because it had no impact so far

00:17:34: For me, clearly the endless discussion without conclusion or decision.

00:17:38: I mean we can have endless discussions but it should be always with some decisions.

00:17:42: so that's really what i would like to abolish.

00:17:46: Coming here as a leader how do you create an open working environment where our colleagues bring their fundamentals?

00:18:03: you have chance that the colleagues will have a smooth working environment.

00:18:09: So as leader anticipation is key, The second one for sure communication and communication never enough.

00:18:16: You need to really use lots of different mediums tools and support to communicate as much possible.

00:18:24: That's what I emphasize.

00:18:27: And then transparency.

00:18:28: You need to be also very clear with achievements, what you expect... ...with what doesn't work or even what you did wrong.

00:18:36: and I think transparency is very much important into dealing on a daily basis with colleagues.

00:18:45: Interesting!

00:18:46: Now come back one of your favorite Metro fundamentals.

00:18:49: which three words best describe?

00:18:51: One Metro To You?

00:18:53: So clearly score, I mean score is clearly what describe best Metro because everybody's united under this core strategy.

00:19:01: Score the first one then.

00:19:03: second one customer Because it amazing how we can leverage the customers benefits.

00:19:10: so We have a big treasure with our customers and customer in metro really key.

00:19:15: i work in retail before and feel that in whole cell customer Much, much more important and Metro is taking a lot of care about customer.

00:19:24: And the third one is people.

00:19:25: Metro is a people company so that definitely this also very-very important.

00:19:30: So these are three score customers.

00:19:35: Alexi, now we know what's important to you about our fundamentals and how you deal with them in your daily work.

00:19:40: And later on... We want to find out What else is important for you personally?

00:19:44: Being at work also maybe in a private life With the sounds of an ear!

00:19:48: Here there are already very short pre-listenings And again... Hmm yeah Sounds interesting As always.. We will find out what it means For You towards The end Of this episode.

00:20:10: As mentioned earlier, Stella Madros non-food transformation is currently in the implementation phase.

00:20:16: This was... preceded by month of preparation and consultation with the countries, Alexi.

00:20:22: Let's talk about the basic idea in requirements behind this whole project because when we first communicated the non-foot transformation and the stellar projects internally The topic was still framed as a cost leadership measure.

00:20:38: to what extent has it developed since then into a topic that should actually be described?

00:20:46: Yes, I mean centralization has supported cost leadership measure but the main target from beginning with Stellar is to build more relevant assortments for our professional customers.

00:20:57: So that's really key essence of what all we do and create an end-to-end organization which will act as one supplier for common sourcing range in countries.

00:21:11: so those are things where very much focusing on this end-to-end approach and just to highlight that really we have built a strong relationship with the supply chain for that.

00:21:23: That's really important, our main focus is to grow common sourcing sales yeah?

00:21:29: That's own brand but also commonsourcing brands Yeah!

00:21:32: Our main driver.

00:21:33: so we really focused on sales growth.

00:21:36: One key aspect of transformation is centralization in non food procurement.

00:21:40: What organizational changes were required to set the foundation for Stellar?

00:21:46: I think in short, we had to centralize much more.

00:21:50: Therefore, we have to ramp up our center team from offer to sourcing but also supply chain with a creation of non-food supply chain theme in the MIS structure.

00:22:01: But there are some new positions like sales activation expert or sales merchandising that people at the Center dedicated to drive better merchandising and sales activation At countries, of course we had to adjust our non-food team and this has been done also very smartly in order to cope with the organization target for overall group.

00:22:22: And what overarching goals have you set yourselves?

00:22:25: With this new centralized approach ?

00:22:29: So as mentioned before common sourcing sales grows.

00:22:31: This is really big focus.

00:22:33: then income increase.

00:22:35: I mean We need to increase our income results, availability increase together with stock days reduction and leading to positive cash flow development.

00:22:47: That's very important on a multi-channel level because we know big part of the growth is also coming from online business.

00:22:53: so that I think are overarching targets as we fix ourselves as Stellar center in country together

00:23:02: Coming back once again these organizational changes which always difficult but in terms of Stellar they bring significant advantages.

00:23:10: How do these changes affect the balance between centralized common sourcing and local sourcing of the metro and macro countries?

00:23:20: Yeah, so as you mentioned at the introduction I think that target is by two thousand thirty to reach this eighty percent commonsourcing sales share on brand-and-brand together but off course.

00:23:33: this journey will be different category by category meaning There are some categories where some brand can be more relevant, but overall clearly eighty percent common sourcing and twenty percent local sourcing.

00:23:45: This is the goal by two thousand thirty that we have.

00:23:49: And what other benefits of this new way off working?

00:23:53: For example also in terms of efficiency.

00:23:55: Yes, we can see a lot of efficiency gain.

00:23:58: I would quote perhaps in terms of procurement.

00:24:00: A very good example of coxsaving or product trade-up.

00:24:04: but also we gained a lot from the whole supply chain.

00:24:07: From packaging improvement to optimizing QA processes and quality control processes as well as logistics and transport.

00:24:15: so there are already some benefits that we could give back to the country, particularly from the metro sourcing area where it would reduce basically our commission for countries.

00:24:26: But also more close relations between offer sourcing and supply chain.

00:24:31: We see this very well in the center because as I mentioned there is a non-food supply chain team.

00:24:37: but you can see lots of relation at country level offer team, category manager and supply chain together.

00:24:46: So that's also showing a very positive way forward in the organization.

00:24:53: but we need to continue is not the end?

00:24:58: And maybe beyond this work approach how has new organizational structure changed the collaboration with the countries also in terms of acting as one metro.

00:25:10: So what about the cultural part?

00:25:12: I think everything started, really this project led from two thousand twenty four was supported by his Metro Germany and Metro France yeah.

00:25:22: And here we had Mathias Dutchman and Cynthia Meroep very much involved into to do a project form The Start together with a visit in Romania and Bulgaria, we on board the countries from very beginning into Stela.

00:25:41: And what after that is to do two workshops with those countries?

00:25:46: To deep dive into what works... What's not working ...to have true conversation ?

00:25:52: and reach the basically plan, the milestone that we had with some missing parts.

00:25:58: Category management was missing performance management wasn't... We are missing in category management mainly assortment review yeah?

00:26:04: So we were enriching our journey together with the countries so we have a much better road map.

00:26:12: And then after we set up country visits now my team I've been able to visit certain countries where we spend usually two days within each countries going from local competitors' visits, so a local ORECA competitor visit to model of store metro or macro visits and then understanding really the customer in their current situation.

00:26:33: And then going into meeting room and speaking about Stellar and implementation on what we have all together do that once a month's visit together with a monthly call from all the countries.

00:26:45: So every month we had also a monthly stellar calls, with head-off and on foot and quarterly with OMD.

00:26:52: And on top of that I have a quarterly one to one with the OMD myself where we had good exchange usually in what are the challenges specific for those countries?

00:27:06: And on top of that, we had all these leadership talks with more stage and now more podcasts.

00:27:13: So the Stellar Implementation Days... ...and of course the Stellars Circo.

00:27:17: and then we have a lot of support from Michael Ciesilski.

00:27:21: But I think this was one key driver is to build community.

00:27:26: We communicate a lot not only within non-food but also in supply chain.

00:27:33: So that was one thing, then perhaps the second big things is we set up also a new offer gastro team between France and Germany.

00:27:45: We have head of Gastro Yandeni under Lars de Verstau in base in France with two colleagues and another colleague here in Germany.

00:27:54: so it's first time for us to setup mixed team, not only in Düsseldorf but two different locations and we are very happy with that.

00:28:01: Why did you choose France?

00:28:02: Because of course there was a big expertise on gastro.

00:28:05: And the third thing is also to leave the principle that country becomes more center and center become countries.

00:28:14: I think it's the essence for many ways working where we should really understand each other better.

00:28:25: I could witness with the Stellar Implementation Day last week that we are at a very good step.

00:28:31: Yeah, it really sounds not only like a good start but they're really solid foundation for all projects.

00:28:36: and finally to conclude let's take look into what score targets has Metro set in terms of non-food by twenty

00:28:48: thirty?

00:28:48: So clearly sales growth, I mean that's what we want to achieve and gain professional customers.

00:28:54: We have still a lot of professional customer who don't buy non-food products at Metro, Multichannel wherever it is.

00:29:00: so we need to gain much more professional customers by non food then but also common sourcing share at eighty percent.

00:29:10: So with additional brands that we will also centralize, We'll have commonsourcing share up to thirty percent and of course a positive cash flow development as a multi-channel view.

00:29:21: That would be very strong achievement if you had all this.

00:29:31: Dear colleagues the big fresh matchers year after Fresh has begun!

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00:30:36: just click on the link in show notes of this episode.

00:31:07: whatever that special thing may be.

00:31:10: And now we are of course very, very curious to hear.

00:31:12: which sound did you bring for us?

00:31:16: So let me play.

00:31:17: I hope it will be okay.

00:31:23: Okay many people talking.

00:31:32: What is this?

00:31:33: some kind of event?

00:31:33: This basically a busy restaurant.

00:31:36: Ah!

00:31:36: This

00:31:37: is basically a busier restaurant and privately i love to go to restaurants pleasure to enjoy good food but not only from France, I love also Asian food and a lot of different foods.

00:31:50: Me as German

00:31:50: too by the way!

00:31:51: And i like try lots of different food.

00:31:54: so going restaurant is one my pleasure working in Metro.

00:32:00: having busy restaurants would make us feel probably very happy because hopefully they will be also much for customers.

00:32:12: When I go to restaurants, I always look at non-food products.

00:32:16: Looking at the plate or looking at a knife or looking in glass but for sure there is lots of potential and that's why i was bringing that sound because this reflecting on my life, but also on a professional level.

00:32:31: And then if you're in the restaurant and try to get into discussion with the restaurateur about non-food products?

00:32:37: Yes specifically when I can see that there are some product and perhaps others are missing it's kind of easy to ask him things.

00:32:47: sometimes we have food products at the table like sugar or whatever so its easier.

00:32:52: know he is a metro customer the owner or to the waiter, yeah?

00:32:59: Yeah.

00:32:59: Great!

00:32:59: What an amazing sound and also a great story behind it.

00:33:03: Thank you very much Alexi for sharing with us And that wraps up today's episode of more podcast.

00:33:09: A big thank-you to you Alexi For all the insights about non food transformation at Metro.

00:33:14: We've certainly learned alot About this stellar project.

00:33:18: Thank You very much, Alexi.

00:33:19: All the best to you And to all our Metro colleagues listening, thank you for joining us.

00:33:29: Don't forget to subscribe to more podcasts on your favorite podcast platform catch up on all past episodes and recommend More Podcasts To All Your Colleagues.

00:33:39: I'm looking forward to the next episode.

00:33:41: bye-bye and take care.