With its central location, high footfall and bags of space Hyperama’s West Bromwich depot was a natural choice when it came to seeking sites to pilot JTI’s new generation of tobacco rooms, according to JTI’s customer marketing manager Richard Tyler.
The new Arena room has been under development for more than a year but the one at West Bromwich was only the second to be installed, after one at Dhamecha’s Wembley depot, and the concept is still being honed before a planned roll-out next year.
Work on the Arena project started in June 2008 and shortly after JTI asked its wholesale team to highlight potential pilot sites. Tyler says: “Arena would not be suitable for all sites, for instance some smaller depots, so we were looking for size, the right footfall and the right demographics. It was also about the relationship with the account so we could get the right feedback for the pilot stage.”
By January this year JTI’s supplier, Maxim, had set up a test room and cash and carry customers were invited to take a look and suggest any improvements they thought were needed. Having taken on board the feedback the first Arena room was successfully installed at Dhamecha in late April. Learnings from that pilot were then incorporated into the new room at Hyperama in June.
Explaining the choice of the Hyperama depot, Tyler says: “If you look at the Landmark Wholesale Group it is a flagship depot. Geographically it’s a good central location, footfall is very good, and visibility of our product is very good so from our perspective it ticked all the boxes. Also Hyperama are a great account to work with. They’ll tell us good or bad which is the thing we want for a pilot. We don’t want someone who says it’s great when they are having problems with it. We’d rather have an account that’s proactive and works with us as opposed to one that will just accept everything we do.”
Andy Thorpe, JTI’s multiple account executive with responsibility for the depot, says: “The relationship has a lot to do with it. This room before we fitted Arena was already one of the best rooms because of the staff, the way they want the room to look, and how Hyperama want it to be seen.”
With tobacco being such an important part of any depot’s sales mix there was no possibility of closing the existing tobacco room while the work was done so the installation had to be completed in a single night. Andy Mitchell, general manager of the depot, says: “Hyperama staff had to empty the room of stock when the depot closed on Saturday afternoon, then JTI’s contractor did the work overnight and it was refilled and ready for trading on Sunday morning. It was pretty much stripped bare to the walls and then put back together again. The only thing that didn’t move was the cash till.”
The room features new shelving and a bright ‘premium’ environment which makes it easy to see the products. Light boxes have been moved down to eye level, says Tyler, after eye track research found that customers were not looking at the top shelves. There is an overhead projector with a motion sensor which enables shoppers to interact with the images beamed onto the floor, and an information corner includes a TV screen. The screen can run a playsheet highlighting a variety of brands and activity, and it has a 3G connection which means the message it is carrying can be changed remotely at the flick of a switch.
The day following the installation the teams from Hyperama and JTI met to review the new room. Mitchell says: “There were learnings for both of us. We revisited it together and said this is good or this is not working for us.”
Tyler says: “It’s going to be impossible to get everything right first time you go in there, but the changes that were needed were not major and they were done within a week or so.” Mitchell adds: “Those changes made the difference and took it on to another level. For instance reducing the height of the gondolas and making an extra bit of space.”
Merchandising for the new room has also been carried out by JTI using planograms tailored to the individual depot’s sales. Thorpe says: “I was given the sales data by Hyperama and the planogram was based on that. Then it was a matter of agreeing that with the account and making sure that everything has got sufficient space.”
Tyler adds: “We have a space planning team who would take the numbers that Andy supplied, crunch them all through, and give all the brands the relevant space based on the EPOS data. Planograms are tailored for each depot’s tobacco rooms, and they are all different because they are based on their sales and the dimensions of the room.”
Thorpe adds: “They have a large room which allows them to keep three days stock on the shelves and they don’t have to fill it up so often, but for some brands we might say give them two and a half days and look to grow another brand by giving it more space. That would be reviewed and we can tweak the planograms.”
Two months on Mitchell says the changes have been well received. “Customers reaction has all been positive. It’s well displayed and merchandised, the planograms have been done to the spec of the sales, it’s spacious and a good environment that’s appreciated by customers and staff.”
Retailer Surgit Bajwa, of Bajwa Convenience Store in Oldbury, who visits the depot three or four times a week, commented: “The new tobacco room is laid out very well. You can see everything and it makes it very easy to shop.”
Development of the Arena concept has continued with learnings from the Hyperama room incorporated into an installation in United Wholesale’s Queenslie Road depot in Glasgow, and a fourth pilot is planned for Parfetts’ Somercotes depot.
Research is also being carried out with retailers to find out whether the messages and what JTI is doing with POS are correct. Tyler says: “In the Hyperama room the first set of POS was very corporate. It was very dark and didn’t do the room any favours so we quickly changed that and the graphics so it was more retailer facing. We need to look at the messages we are putting in there so we give more retailer education and more information about the brand and the products.
“They can then take those messages away so that if they get asked about a product by a consumer they have that information. We are not allowed to talk to the consumer so we are very reliant on the retailer being able to do that for us.”
After the final pilot JTI is planning to roll out Arena to further depots next year.