Nutrition Warehouse

The Nutrition Supplement Industry

12 Stores

The last decade has seen a significant increase in the popularity of Sports Nutrition and Body Building Supplements amongst athletes in Australia. The industry has experienced rapid growth, particularly in the last 5 years with a large number of new Retailers entering this lucrative multi-million dollar market, many with an exclusively online presence. The thriving Australian consumer market is also targeted by international supplement suppliers, adding to the already crowded marketplace.

Competition for consumer loyalty is fierce in this industry, given that many nutrition supplement products are easily substituted for another brand, hence having stock available on the shelf is of paramount importance. Equally as important is the need to maintain regular contact with customers to advise them of special promotions, ensuring they return to purchase consistently.

Nutrition Store POSAbout Nutrition Warehouse

Nutrition Warehouse is a leading supplier of Body Building and Health Supplements with the philosophy of providing ‘Big Brands at Warehouse Prices’. The business was founded by Grant Mayo, a former professional body builder and winner of the 1997 Mr World Body Building competition, as well as many other titles.

Grant opened the first Nutrition Warehouse store in 2008 with the aim of providing customers with personal service in an industry which Grant was very passionate about. Grant soon opened a second store and immediately realised that the growth of the business would be limited without a strong Point of Sale and Inventory Management System in place.

The success of the business was immediate and Nutrition Warehouse now has 31 locations and many more dedicated staff. Grant’s philosophy for the business is to provide an exceptional customer service experience which will in turn generate a loyal customer base. Grant feels that knowing and understanding his customers, always having the right stock on hand and regularly communicating with his customers is the key to ensuring business success in an extremely competitive market. Nutrition Warehouse is staffed by passionate industry professionals, meaning that customers receive ongoing advice about which supplements will best suit their specific needs.

Challenges faced by Nutrition Warehouse

Inability To Access Critical Business Data

The impressive growth in the business meant that the existing Point of Sale system could not cope with the demands being placed on it, with significant increases in the volume of inventory at each store, rapidly growing locations and more staff regularly being added. In addition, the existing Point of Sale data, including all transactions was stored on local store computers, which placed enormous pressure on Grant as he could not access critical business information about each store when he needed to, without travelling to that store location.

Spiralling Cost Of Managing Stock

Managing inventory in a growing number of stores was becoming a greater challenge to Grant as each new location was opened. The prime objective was to ensure that each location had the best mix of stock available on the shelf at all times. However, the result of not having an efficient and effective inventory management system was that according to Grant, each store was over-stocked by as much as 25%, leading to cash-flow issues. Stores would tend to purchase new stock, rather than transfer stock between locations, as they had little visibility of what stock was available throughout all of the store locations. Stock was therefore being purchased in anticipation of what customers may order, rather than basing these decisions on factual sales data.

When stock was transferred between locations, the paperwork accompanying each stock transfer was being produced manually by store staff, with the booking-in and booking-out process also conducted manually. Grant estimates that purchasing and managing stock was taking up 50% of the time of one staff member at each store, meaning that less time was spent in front of customers.

Inaccurate Stocktakes

Stocktakes were being performed regularly at each location in an effort to maintain accurate stock levels. The existing Point of Sale system demanded that these stocktakes be performed using a printed stock list, which then required rekeying stock counts back into the system. Given each store contained thousands of stock lines, this process was both extremely time consuming and often inaccurate, defeating the purpose of conducting the stocktake in the first place.

Losing Sales To Competitors

With hundreds of competitors in the Nutrition industry vying for their share of the consumer’s wallet, it was essential for Grant to have the right stock on the shelf when customers visited any of his stores. The risk of not having the stock available was that the customer could simply purchase the same or equivalent product from a competitor.

The various Nutrition Warehouse stores were unable to easily see how much stock was available at other group locations. As a result, sales which may have been fulfilled by another store were lost to a competitor. Once these customers made a purchase from a competitor, the risk was that they did not return to Nutrition Warehouse for future purchases.

NW - outside store

Losing Track Of Customers

Grant prides himself on offering exceptional customer service at every store location, as he understands the need to actively engage with each customer to ensure their loyalty and repeat custom. Store staff are strongly encouraged to interact with customers and collect their phone number, email address, mailing address and birthday.

Unfortunately, the limitations of the existing Point of Sale system extended to the collection of customer data. Staff were unable to record the contact details for each customer, meaning that they could not keep loyal customers up to date with special offers and promotions. Something as simple as identifying when a loyal customer was having a birthday and sending them a special birthday offer was not possible.

This lack of customer information also negatively impacted the ability for store staff to upsell and cross-sell products to regular customers. A customer who purchased a certain product may be more inclined to respond to a special promotion, however these customers could not be identified using the previous Point of Sale system, leading to a loss of potential revenue for each store.

Why Nutrition Warehouse chose Retail Express

Retail Cloud Technology

Nutrition Warehouse is now able to grow and expand as rapidly as required, as Retail Express is built on easily scalable class-leading cloud technology. Each new Nutrition Warehouse location can be set up in Retail Express in a fraction of the time it used to take in the previous software system, with deployment of a new store taking less than 48 hours. According to Grant, “We simply couldn’t have grown from 1 store to 12 stores without Retail Express.”

Access Data Anywhere, Anytime

Grant and a select group of his Management Team, based on their User Profiles, can now access any business data about any of the 12 store locations from anywhere at any time, simply by logging on to Retail Express via the secure web connection. Having real time access to critical business data means Grant can manage the business dynamically and proactively, rather than working on an issue long after it has occurred. This has greatly increased the control Grant has of how the business operates on a day-to-day level.

The Management Team can respond quickly to any challenges within any store, even if they are not in the store itself, rather than waiting until the end of the day or week. This ability to access live data from across the business is increasingly important as the physical footprint of Nutrition Warehouse grows throughout Australia.

Real Time Stock Management

Retail Express provides Nutrition Warehouse with the tools needed to effectively manage hundreds of inventory lines. As each Store Manager is responsible for ordering and managing their own stock, Retail Express allows each Manager to easily see in real time how much stock is available at other Nutrition Warehouse locations. Therefore, using the intelligent algorithms within Retail Express, each Manager can determine exactly which stock they need to purchase and which stock they can transfer from another store location. This stock optimisation is critical to ensuring the best mix of stock is available at each location at any given time, while at the same time dramatically improving cash-flow and significantly reducing stock wastage.

If a store does not have an item requested by a customer, this order can be fulfilled by another store and delivered to the customer’s home, meaning that the sale is not lost to a competitor. To fulfil an order from another store location, sales staff simply set the ‘fulfilment location’ in the POS screen as that specific store and a customer order is automatically sent to the location where the stock is to be sent from. This has a significant positive impact on store revenue as well as promoting customer loyalty and ensuring competitors do not have a chance to entice valuable customers away from Nutrition Warehouse.

The process of ordering new stock and transferring stock between locations is largely automated using Retail Express, with Grant estimating a 50% reduction in the time his staff spend managing inventory. Stock can be ordered from multiple suppliers for delivery to multiple store locations from the one Purchase Order screen. As the purchase order is finalised, it can be easily emailed to multiple suppliers at the touch of a button.

If stock needs to be transferred between store locations, an ‘Internal Transfer Order’ can be sent to another store notifying them of the request. In this instance, the stock level at the despatching store is immediately shown as ‘allocated’ ensuring real time stock levels are always shown.

Streamlined Stocktakes

Grant was impressed that all of the common retail functions were available in a logical and time efficient way such as stocktake, end of day processing, stock transfers and purchasing functions. According to Grant, “Stocktake is so much easier and quicker with Retail Express. In fact, all of the administration functions with the business have been streamlined. The features are logical and simple to use. Setting up a new user takes maybe 2 minutes.”

Highly Effective Loyalty System

NW - productThe collection of customer data at the Point of Sale is an extremely important factor in the success and growth of Nutrition Warehouse. According to Grant, “Staff are drilled to collect customer contact data and sign them up to our loyalty program. This allows us to give exceptional customer service which is the key to growing store sales.”

This valuable customer data is then regularly used to send email marketing messages to customers using the HTML email editor built in to Retail Express. Grant and his team can easily select specific groups of customers to advise of specials and promotions and to remind them to come back into the store for their regular product purchases. “90% of our customers come back into our stores to buy more product”, says Grant. The ability to create loyalty and repeat sales is particularly critical in an industry where replacement products are readily available at a competitor’s store.

The future for Nutrition Warehouse

The future looks particularly bright for Grant and the team at Nutrition Warehouse. Grant plans to open several new stores by mid-2013 and plans to continue being one of the leading suppliers of Body Building and Health supplements.

Grant is currently working on the live integration of his successful Webstore into Retail Express, which will further streamline his operations.

The success of the business was recently recognised by the wider business community with Nutrition Warehouse being listed in the Top 10 of BRW’s Fast 100 for 2012.

Click here to see Nutrition Warehouse in the Fast 100:

Retail Express looks forward to a continued successful partnership with Nutrition Warehouse into the future.