Why ECR initiatives are important to the efficiency

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Chapter 1:

1.1: Introduction:-

The Efficient Consumer Response (ECR) concept was put forward in the year 1992, which came about due to a competition among various store formats and the methods used individually which produced results that showed major inefficiencies in the supermarket industry. Since the supply chain process was in a threat and incompetent, the US grocery industry pioneers created a group of intellectuals so to observe, figure out the discrepancies and improve the grocery supply chain performance. As a result, solutions to the problems in the current system were introduced, such as; it was found in the study that the fast and accurate exchange of information in the process of Supply chain makes both the supplier and the distributors to expect demand requirements. The ECR initiatives changed the supply chain from a push system to a pull system, where channel partners formed new mutually-dependent relationships and where the product replenishment is driven by point of sale data. According to Fernie and Sparks (2009) ECR is a global movement in the grocery industry focusing on the total supply chain i.e. suppliers, manufacturers, wholesalers and retailers working more closely together to fulfil the changing demands of the grocery consumer better, faster and at least cost. The rapid advancement in information technology, growing competition, global business structures and consumer demand focused on better choice, service convenience, quality, freshness and safety, made it clear that a fundamental reconsideration of the most effective way of delivering the right products to consumers at the right price is needed. Efficient consumer response is a joint trade and industry body working towards making the grocery sector as a whole more responsive to consumer demand and promotes the removal of unnecessary costs from the supply chain (Goldbach and Seuring, 2002).

1.2: Reasons for the ECR initiatives:-

In the US the trend to supermarket originated during the 1920s. As retail grocery outlets, supermarkets were characterised by self-service from open shelves. Due to the economic recession which began in 1929 and with the use of newly-accessible automobile, consumers would rather travel to more far-away supermarkets offering lower prices than shop that were closer but more expensive (i.e. local food stores). This resulted in a dramatic growth for supermarkets popularity during the 1930s. When the number of supermarkets in the US began to reach its maximum sustainable level during the 1950s, competition drove the development of a number of innovations designed to retain profits. These included the use of private brand, labels, stamps and games. Later, in the 1970s, the use of discounting techniques and coupons began to replace the use of stamps and games. All these consumer promotion techniques required widespread administration and therefore, introduced fixed cost associated to the operation of a supermarket which resulted in the prices charged to the customers. A further drawback of supermarket operations was the relationship pattern existing between grocery manufacturers and retailers, which lead to the disadvantage of both groups. In their relationship, manufacturers would attempt to sell as much as possible at high prices, while retailers or distributors would tend to purchase as little as possible at the lowest price. Manufacturers generally started with high prices and later discounted these to meet their shipping goals. As a result, forward/investment buying and diverting were added to the range of inefficient grocery industry business practices which created short-term excess profits for the supermarket, but produced significant administrative fixed cost, inventory carrying costs, irregular manufacturing schedules for manufacturers and high inventory levels for the whole supply chain. Moreover because of these practices the value of manufacturers' brands were also suffered which caused customers to become more price sensitive and less loyal to the brand. All these inefficient consumer and trade promotions resulted in a loss of market share for supermarkets. In order to exist, the US grocery industry realised that it must reassess its supply chain and purchasing practices. It therefore, needed to study the ways in which manufacturer and retailers were carrying out their business and to provide new ideas for making the mainstream grocery industry more competitive. A study undertaken by a group of US grocery industry leaders in 1992 resulted in the ECR initiative. ECR is not a new idea, but a specific version of the Quick Response (QR) strategy, which is also working in the clothing industry. Quick Response, in turn is a modified version of the Just-In-Time (JIT) inventory management strategy for manufacturers, which was first used by the Toyota Motor Corporation in Japan. So, Efficient Consumer Response (ECR) is a grocery industry management strategy designed to make the industry more efficient and responsive to consumers' needs. The term "Efficient Consumer Response" came into general usage at the Food Market Institute Conference in January 1993 in the United States. Though ECR originated in the US, the concept has been adopted in Europe, Australia and slowly in other regions of the world (Kurnia et al. 1998).

Chapter 2:

2.1: ECR Europe:-

According to the Fernie and Sparks (2009) the implementation of the ECR initiatives to the European grocery industry became more significant in 1994 with the establishment of an ECR Europe Executive Board (ECR Board) to promote and lead the ECR policy in Europe. The ECR Board consists of different companies, equally divided between retailers and manufacturers, many other companies are also actively involved in ECR Board projects. The European ECR initiatives define ECR as working together to fulfil consumer wishes better, faster, and at less cost. The ECR headquarter is in Brussels and working in close cooperation with national ECR initiatives in most EU countries. The participation in the project is open to the large and small businesses in the grocery and fast moving consumer goods i.e. retailers, manufacturers, suppliers, wholesalers and third party logistics service providers both at the EU and national levels. It also supports the use and development of the CPFR in its seminars and publications. Every year Europe organise its annual conferences in different EU cities at which retailers and manufacturers put forward their views and best practices on the issues related to the ECR and CPFR. The European supermarket business is similar to the United States apart from that European supermarkets are usually smaller. A main strength of European supermarkets is their high efficiency per square foot while on other hand the US supermarkets are more service-oriented which Europe is starting to catch up. ECR is attractive to the European grocery industry as it offers improvements in the quality of products and services and in environmental aspects as well (Fernie and Sparks, 2009).

In 1993 the Coca Cola retailing research group (CCRRGE) gave a different meaning to the ECR and named it as supplier retailer collaboration (SRC) in supply chain management, which was a new approach to the ECR initiative in EU in the grocery industry. This SRC as defined by CCRRGE (1994 cited Kotzab 1999) 'when both retailers and suppliers share proprietary internal or external data, and/or share policies and processes used in decision making with the clear objective of sharing the benefits'. The Scope and effects of the SRC in context to the logistical cost and saving were also significant for supply chain performance. According to Kotzab the SRC could be taken as an expansion of the Salmon research by expanding the meaning of the model not only with a European aspect but also as increasing the number of other partial strategies. The main differences of the SRC strategies are between the merchandise flow, information flow and marketing oriented activities. However through this the savings of SRC was calculated by CCRRGE (1994) as 1.8 percent to 2.5, which show reduction in the logistical costs (Kotzab 1999).

2.2: Improving supply chain performance by ECR:-

ECR is mainly related to strategic partnerships in the distribution channels of the grocery industry to increase the performance of the supply chain. The required achievement of ECR is a consumer driven distribution approach in which the production is entirely managed by the consumers' POS activities. Responding quickly to the consumer needs has become a major concern for all retail businesses and especially in grocery retail business. Consumer satisfaction is an absolute for staying competitive in retail operations. This quickly responding to consumer demand requires continuous replenishment of products at point of sale without keeping unnecessary inventories in the supply channel. While, holding minimum levels of inventory demands good vendor management practices. Moreover, communication, co-operation, and co-ordination among all trading partners of a grocery supply chain become a significant management issue that must be determined prior to adopting ECR approach (Hoffman and Mehra 2000).

According to the study by Kurt Salmon associates (1993 cited Lummus and Vokurka 1999) when a group of grocery business leaders shaped a joint industry task force called the efficient consumer response (ECR) working group. They were involved in examining the grocery supply chain to spot the opportunities to make the supply chain more competitive. Kurt Salmon Associates were interested with the group to explore the grocery supplier, distributor, and consumer value-chain and to find out what improvements in costs and services could be accomplished through changes in technology and business practices. Though, the results of the study showed that little changes in technology were required to improve supply chain performance, except further development of EDI and POS systems, but, the study also identified a set of some best practices which, if practically implemented, could significantly improve overall performance of the supply chain. More over Kurt Salmon and Associates (1993 cited Lummus and Vokurka 1999) also found that "By expedite the quick and accurate flow of information up the supply chain, ECR enables distributors and suppliers to anticipate future demand far more accurately than the current system allows". It was also argued that through the implementation of best practices they planned an overall decrease in supply chain inventory of 37 percent, and overall cost reductions in the industry in the range of $24 to $30 billion was expected. However, the successful implementation of the ECR for a producer depends on their capability to maintain manufacturing flexibility which makes them enable to match the supply with demand. While this flexibility is a process which tightly joins together the demand management, production forecast, and reduces the inventory to allow the company to make the better use of information, production resources, and inventory. Apart from that the additional development from the ECR initiatives is the idea of continuous replenishment (CRP). CRP is basically a change from pushing product from inventory holding area to pulling the products towards the grocery shelves which is based on consumer demand. In the implementation of the CRP system the computer plays its role, where at the point of purchase the communication and transactions are forwarded by the computer to the producer or manufacturer which allows them to keep the retailer stock replenished and balanced the just-in time demand. The CRP system has been established by many manufacturers and retailers for improving their supply chain performance e.g. Procter & Gamble and Campbell soup are carrying as much as 30 to 40 percent of their products by CRP. Ralston, General Mills and Pillsbury are also distributing about 10 percent by CRP strategy. The of improvements in the performance of the supply chain with the help of CRP also includes the increased inventory turnover from 10 to 50 percent, while minimising the days of supply from 30 to 5 with the better net margin of 5 to 7 percent (Lummus and Vokurka 1999).

The ECR strategy focuses particularly on four major opportunities to improve efficiency:

I: Efficient store assortments and space allocations to increase category sales per square foot and inventory return.

II: Efficiency in the distribution of goods from the point of manufacturer to the retailer shelf.

III: Efficient promotion by reducing the cost of trade and consumer promotion.

IV: Reducing the cost of producing and introducing new products (Hoffman and Mehra, 2000).

Research methodology:

In order to examine the growth and development of ECR and the implementation of its practices different ways of inquiry will be used. The overall exploratory nature of the study based on the research objectives requires multiple sources and methods which include a review of the available literature. To achieve this we read, analyzed, and summarized the available published information on ECR and its current practices in Europe and its history in the US. The second method is through the observation and investigation of the ECR conferences and annual reports, this method is particularly well-suited for studying naturally occurring phenomena such as the development and adoption of various business practices relates to ECR. This provides help in obtaining the data about the ECR community from its early stage of adoption to the present. This includes the analysis of the ECR-EU Conferences, current practices and ongoing participation on the ECR Global Scorecard development team.

Chapter 3:

3.1: ECR components:-

Efficient sourcing: Pull instead of push, flow-through systems, global sourcing and vertical integration of the value chain.

Efficient replenishment: Shorter lead-times, just-in-time systems, category-useful logistics,

Efficient systems: IT networks, data warehouses, EDI messages.

Efficient controlling: Activity-based costing, reporting and forecasting systems, real-time controlling.

ECR could be taken as a quasi-vertical type of partnership and combination between the retailers and manufacturers to satisfy the customers demand better, faster and at less cost. Primarily it was designed to bring competitiveness in the grocery supply chains and to assure the major benefits e.g. lower inventory costs, value created for consumers in terms of variety and quality of goods, improved supplier retailer relationships, enhanced development of new consumer driven products, a more accurate product delivery flow and to reduce the bull-whip effects from the supply chain (Aastrup et al 2008). The particular goal of an ECR strategic partnership is to make simpler and easy the market flows between the actors while ECR can be considered as a smooth distribution channel partnership. The indication from the UK study has shown that the supplier and retailers has received profit in logistics and in sales related activities from such closer and collaborative practices (Aastrup et al 2008). Corsten and Hatch (2001 cited Aastrup et al 2008) also confirmed that ECR can account for 37 per cent of total channel performance.

3.2: ECR standards, processes and prerequisites:-

Though the ideas and the implementation of the ECR initiatives and its usual benefits have been known since the start of the 1990s, but the ECR ideas are still not as general in practice as it is expected. Some of the companies in the grocery business work with the ECR EU and implementing the ECR related concepts and activities. However, most often the total ECR theory is not applied or some ECR basics are not considered as they should be or others are only partially implemented. So, which means a truly ECR organized distribution channel is hardly ever present. According to Aastrup (et al 2008), UK leads the market in practical implementation of the ECR initiatives because of the ECR UK being working together and incorporated by the UK IGD, which is known as the Institute of Grocery Distribution. Moreover to enhance the operational and supply chain efficiencies and performance the UK grocery retailers have streamlined their supply chains. In order to minimise the lead time and reduce the inventory holding cost from the their grocery supply chain they have already introduced the primary and secondary distribution centres instead of centralised distribution pattern which is a positive move toward the retailer and supplier relationship in the channel. In the study by Fernie and Sparks (2004 cited Aastrup et al 2008) stated that the UK had one of the most organised and efficient grocery retail supply chain in the world. But nevertheless, even the UK implementation of the ECR is not without its errors and weaknesses regarding the partnership and relationships between the retailers and suppliers. Research shows one of the reasons in many to this; and that is the low degree of ECR application found in certain implementation problems and resulted in unsatisfactory outcomes at an early stage of process, which has delayed the development of ECR partnerships as they were expected. As the aim of the ECR is to manage the entire grocery supply chain in a holistic way by putting into practice the strategic coalition between the involved players to ensure the a situation which provide profit for each member of the chain even in stagnant markets i.e. a win/win situation. Such a joint management practices improves the whole channel performance as compare to managing the channel by individual way. Companies therefore needed to have their firm partnerships and to eliminate the gaps from total distrust to joint venture and collaboration, and to consider "soft" organizational and cultural issues, which will enable the actors to achieve supply chain excellence. It is clear that the ECR concepts demands for integration of particular business functions between the retailers and suppliers and to operate business between them in such a way which should be based on a specific practices, such as category management, continuous replenishment programs (CRP), cross docking, collaborative planning, forecasting and replenishment (CPFR), efficient unit load (EUL), and system for items identification and communication in the supply chain (Aastrup et al 2008).

3.3: Category Management:-

In the past several years the collaboration and partnering approach between the retailer and supplier has become an important business practice. ECR concept was primarily designed to deal with inefficiencies that had developed in the channel for many years. On one hand ECR practices have been adopted worldwide but still a large portion of the expected promise from ECR has not been realized. ECR Aims and objectives are consummated through both supply side and demand side approach. The core purpose of the supply side is to get the product through the supply chain and to the end customer quicker and cheaper. While, on the other hand the demand side strategies use category management to consider which products should be, and should end up on the retailers' shelves, despite of how fast or smoothly the supply chain operates. It means that both the supply and the demand side contribute to the core objective of an ECR relationship i.e. to provide a sustainable and competitive benefit for the channel partners in the chain (Dupre and Gruen 2004).

According to Jacquez and Seer (2006) the category management is a practice of classifying and managing product categories as a considered business units, rather than simply viewing a retailer's offering as a collection of individual products. The category management approach brings better business results by focusing on delivering value to the consumer where it works as a shared process between the retailer and its vendor. In the recent years due to its importance and awareness, the term 'category management' has entered the retail sector in almost every product line. In reality it works better in the supermarket trend, where big retailers of packaged goods came to know that they could improve sales and their returns if they could more efficiently manage all their different product categorization. This idea was to oversee the store not as an aggregation of products but instead as a mixture of categories, with each category unique in how it is priced and how it is expected to perform over time i.e. to do better sales. In this process the retailer consider one vendor as a "category captain" who will work closely with the retailer in helping to define the category and help to allocate its place within the store, assess its performance by setting goals, identify the target consumer, discover the best way to merchandise, stock and display the products category and then control the implementation of the plan. Becoming a category captain is an important position because it offers the supplier an opportunity to influence the retailer buying decisions which work positive for the retailer's future business (Jacquez and seer 2006).

3.4: ECR EU Scorecard initiatives with Sainsbury's on category management and its achievements:-

According to the IGD UK the category management is 'the strategic management of product groups through trade partnerships which aims to maximise sales and profit by satisfying consumer and shopper needs.' The ECR EU has some useful studies and findings in the form of case studies for retailers, suppliers and manufacturers on the category management which if they bring in their practices they can achieve significant benefits, the example of the Sainsbury's use of scorecard together with their supplier are as follow:

Retailer: Sainsbury's

Supplier: Greenery Superior

Category: Salads

The Greenery Superior is one of the UK leading names in fresh produce business. They mainly deal with key suppliers of tomatoes, salads and organic food as well as fresh produce of many kinds.

3.4.1: Key action from the Scorecard:-

From the ECR score card one can find that the Sainsbury's was facing problem together with the supplier in the proof of deliveries (POD), where there was lack of clarity which was not even clear that where the problem was? either at collection or delivery point and the proportionately long timescales involved in receipt of PODs back at the supplier. These both issues were creating problem for the administration and payment departments. So, the main concern and achievement from completing the scorecard was to focus on proof of delivery notes.

3.4.2: Who were involved?

-The Accounts administrator and Commercial Manager from Greenery Superior to gather with the staff from the Technical and Logistics functions.

-Supply Chain manager and Primary Distribution organiser from Sainsbury's.

-Primary distributor for Greenery Superior.

In this supply chain a primary distributor was used to bring the stock into the UK. Where to sign the proof of delivery notes were needed by Greenery Superior before invoices should move to Sainsbury's, but there have been ad hoc issues with receipt of these PODs. The Sainsbury's team was not aware of the issue till the scorecard was submitted. It was agreed to use within three weeks of starting the process. The Greenery Superior used the "draft" functionality of the scorecard; to revisit it to make sure it was given the time and value of use as needed. This was used by the technical and logistics team only. From the application of the scorecard the Sainsbury's examined, remarked and agreed that they had improved their actions within only five days. With the use of the score card the Sainsbury's supply chain manager was able to make a quick and easy contact of the Greenery Superior directly with the Sainsbury's primary distribution team. As a result they both the teams are now working to ensure the reliable and timely return of POD notes.

3.4.3: What were the benefits from the scorecard?

The improvement in the accuracy and timeframe of the proof of delivery resulted in considerable benefits for both the partners. In this case the three main important areas were:

Reducing management errors and therefore enhanced improvement in the accuracy of information;

Faster dispensation of deliveries, invoicing and payments.

Reducing costs and improving the efficiency of the supply chain operation between Greenery Superior and Sainsbury's.

At the start to use the score card Greenery Superior took a little time to get command on the scorecard. As initially they got problem mainly with the navigation side which later on became easier with regular use. Not only they were concern but, there was also initially lack of awareness of the scorecard from the Sainsbury's participating team, which was also sorted out easily with the insertion and regular use of the scorecard in usual business practices. This changed the relationship in a positive direction as Greenery Superior was struggling to become more UK focused in its business with Sainsbury's. Therefore; they achieved this with the help and use of scorecard as it provided a perfect model to help in their operation. Moreover it was used to emphasize issues and demonstrate the supplier's concern to ensure best service to Sainsbury's. The scorecard was integrated as an essential part of the company's business review process with Sainsbury's Supply Chain department.

According to the accounts manager of the Greenery Superior, that by using and completing the scorecard according to accurate procedure has provided us with an ideal filter for highlighting real business issues and it is a great way to convert business issues into practical actions. He further added that as it requires a committed effort to complete the scorecard but if this has been taken seriously then the benefits are numerous. The Sainsbury's supply chain manager commented and appreciates their supplier completion of scorecard. As he said, that they considered issues and responded with brief comments in order to provide detail where needed which show a positive step to drive the relationship forward.

3.4.4: Future's prospects:-

After the successful implementation of the ECR initiatives and use of scorecard some other actions were also highlighted to provide benefits for the future businesses. This included contracts on commercial issues and measurement criteria, along with the development of a clear category business plan while in partnership with Sainsbury's. More over Greenery Superior also considered using the results obtained from the scorecard to highlight the need to improve internal understanding of the Sainsbury's business. In this regard they organised a full day session to get knowledge about the Sainsbury's operation and their goals (ECR global Scorecard).

Retailer: Sainsbury's

Category: Breakfast

Supplier: Kellogg's

3.4.5: Key action from the scorecard:-

Kellogg's is one of the major and leading suppliers of breakfast stuff in the UK. Sainsbury's together with the supplier of its breakfast products (Kellogg's) were facing with the problem of failed deliveries. This was a root cause to poor customer service, product availability and lower sale ratio. Apart from that the issue of poor communication was also raised between the retailer and supplier and the question was how to resolve all these and achieve an improvement in the service level. The team find that through the use of the Compact Scorecard, Kellogg's and Sainsbury's can potentially improve the number of failed deliveries and could help in smooth communication of such issues. It was further identified that to strap up this opportunity would also lead to significant improvements to service levels, product availability, better sales, and eventually customer satisfaction.

3.4.6: Who were involved?

The development team for the successful implementation of the scorecard was included of supply chain departments of both businesses. For this, the individuals involved in the project were the Sainsbury's Supply Chain manager, the Kellogg's Customer Services manager, and the Kellogg's supply chain controller. As for both the businesses the matter was very important and therefore, had senior support throughout the development project. According to the Sainsbury's the Kellogg's was one of the firs suppliers to complete the Compact Scorecard with a very positive results just in a short period of time i.e. less than three months. All this was possible with the joint help and support from both the sides involved in the process.

3.4.7: What were the benefits?

This project has delivered some remarkable and solid benefits that improved the performance of both the businesses:

Kellogg's warehouse service level has improved from low points of 91% to high levels of achieving +98%.

Returns were reduced from an average of 4.15% of weekly sales to 0.435% of weekly sales.

Vehicle fills were considerably improved.

More precise processes were introduced which provided a more secure platform for the future working partnership.

Better understanding and visibility of how each business operates, this is an important step in identifying and addressing issues as they occur in the future.

Joint sharing and use of information such as Delivering the Product (DTP)

Closer relations between supply chain departments from both the partners (ECR global Scorecard).

3.4.8: Future's prospects:-

According to the Kellogg's customer service manager the Scorecard provided the ideal road map for improving a well known but previously uncertified problems. The changes that have been made through using ECR scorecard practices led to significant improvements in service level which have definitely improved the product's sales. Moreover it has positive effects on the relationship and it has certainly evolved in to new and different areas. He further added that Kellogg's and Sainsbury's have always enjoyed a fairly open relationship, and through the work which has been done on this project has definitely paved the relationship. While the issues related to improved partnership in between the two there are certain projects going on especially the supply chain side still needed to work on availability and replenishment trial (ECR global Scorecard).

Chapter: 4

4.1: Supply Chain collaboration and ECR:

In the recent years many initiatives have been taken to encourage collaboration in the supply chain, including sophisticated IT planning systems to Efficient Consumer Response (ECR). In which many initiatives were assumed to remove the adversarial behaviour from trading relationships between retailers and manufacturers for shared gain and benefits. But there are always areas of resistance, margin contracts or in trading terms. So, what needed is the recognition of better understanding the differences and which will create opportunities to deal with the restraint trading partners face. Most of the time the publicity of collaboration cover the real business plans which are demanded. While the attempts made by ECR are working for the industry to gain agreed joint return on investment (ROI) models with fact based foundations for sharing costs and benefits. The leaders in the retail sector, however, acknowledged the great benefits to be gained from working with selected partners on possible win-win situations and improved shared business plans. The research shows that retailers are keen to share information with suppliers, and even some actively support suppliers to use such information to develop the partnership. But there are some hurdles to collaboration exist, e.g. the fear that manufacturers will set up similar sales channels in the market. However, as these obvious tensions remain but there are still close corresponding interests between the plans of retailers and manufacturers and various areas of potential collaboration exists. The retailers are willing to invest in long term partnership with those manufacturers that can make a real difference to their business and have a real bargaining power (Smith2009).

4.2: Retailers optimising their operational effectiveness through:-

Improving their buying power and inventory control through joint and shared trade in management technologies.

Optimising their supply chain costs through improved forecasting and greater responsiveness.

Improving their sourcing strategies as by increased producer visibility, farm gate pricing and direct sourcing, and through consolidation and procurement through "super suppliers" i.e. to have room for higher quality standards and larger volumes year-round.

Outsourcing complicated tasks or by appointing skilled interim supply chain managers.

Incorporating several channels and formats to optimise productivity and to ensure that basic requirements are constantly met.

4.3: Manufacturers improve their financial performance through:-

Improving innovation, introducing new products and useful commercial practices to drive margin and volume growth.

Enhancing brand and consumer knowledge and creating strong pull-through demand in stores.

Creating forceful category scheme for retailers, based on deep understanding and insight to create additional value.

Broad objectives for investment to drive real growth without needless costs.

In short the growing need to get supply and distribution of goods not only accurate but commercially practicable for all the partners, retailers are examining their own business strategies and their relationships with the suppliers to optimise business flows and transactions. So, if they want a strong and successful position in the markets then collaboration with their suppliers is important (Smith 2009).

4.4: ECR EU as Jointly Agreed Growth (jointly agreed growth):-

ECR Europe has outlined a user guide for business teams, the Jointly Agreed Growth Process (JAG). This recommends a 3 year business plan with an annual review. In the process the time allows to construct business stability, smooth progress of the management of business-related conflicts, avoiding distraction and related inefficiencies in the partnership. Time also allows the required investments in the creation and improvement of store, layout or product. The importance of sustainability further requires a long term vision in the business relationship as well as in the move towards to innovation. More over the element of time also helps in defining if new products effectively generated incremental sales or were just a temporary success, whose effect was similar to a promotion. Some improvement and innovation of products may take longer to gain shopper interests but may bring more lasting revenues for business. It means only the display of repeated purchases and incremental sales to the existing range and overall basket-size can define the true measure of success for new products (ECR 2006).