Driving Store Profitability Via Macro Space Optimisation

The challenge:

Australianbig-box retailer Officeworks is transforming its stores with a focus onefficiency and growth. To facilitate this, they turned to Scalene to advise on theoptimal product space for each store in its network. Our optimisation solution alsoaddressed key challenges around estimating future product performance,strategic and operational constraints and the impact of store-level spacechanges by category.


The solution:

Ourunique space optimisation solutions allowed us to analyse and prepare allrelevant and available store and customer data. We then made space elasticityassessments, applied business rules and configurations and incorporatedstrategic overlays to provide them with tailored store-specific spaceallocation recommendations.

Ourrecommendations also considered the space in store required to supportOfficeworks' strategic and operational goals. This involved identifyingvaluable space change opportunities aligned with Officeworks’ business strategyand objectives while also ensuring efficient and effective implementation ofspace changes in stores.

The results:

On implementing our recommendations across allstores in the network, Officeworks saw a net change in store sales and marginof more than seven percent. This equated to an incremental annual salesincrease of +$45m and an incremental annual margin increase of +$21m. Adding tothis, these strong initial benefits have laid a foundation for ongoing builds inperformance over time and Officeworks is reporting stronger-than-expectedgrowth through the post-implementation period.


We helped Officeworks achieve an incremental sales increase of +$45m and an incremental margin increase of +$21m (+7%)
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