SpartanNash focuses on demand forecast across key channels using AI

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Food distributor and grocery store retailer SpartanNash showed how AI helps businesses focus on what matters in their demand forecast at Xcelerate 2019, hosted by Symphony RetailAI.

The fifth largest food distributor in the US and a Fortune 400 company, SpartanNash delivers to 18,000 national accounts and 2,100 independent retailers plus drug wholesalers and web-based retailers; along with 164 corporately-owned stores. The company also has a significant commissary business including supplying the US military.

Jason Burnet and Jeanette Buck highlighted the challenges the company faces dealing with a diverse number of businesses including independent retailers with no promotional calendar and varied execution, growing national accounts and fast expanding web-based businesses. 

“We have 20,000 customer locations and only 164 are our own, where we know what they are doing ie their assortment and promotional calendar. Therefore there are a lot of unknowns,” said Buck.

Burnet and Buck talked delegates through lessons learnt with AI and how changing shopper demand across the company’s four channels is enabling SpartanNash to think differently about its replenishment strategy and inventory deployment, moving from a weeks of stock approach to days of stock. The duo said the deployment with Symphony RetailAI had resulted in operating a just-in-time inventory methodology that allows more volume through the same size distribution network. 

Musgrave transforms supply chain 

Musgrave is transforming its supply chain with a “Perfect Order” programme for its retailer partners that is designed to deliver the same sort of seamless shopping experience that consumers expect to receive from its Supervalu supermarkets and Centra convenience stores in Ireland. 

Same seamless experience for retailers that shoppers receive in stores

Presenting at Xcelerate 2019, Ger O’Flynn, head of commercial IT at Musgrave, said retail was being disrupted by technology. “We are no strangers to change but it provides both challenges and new opportunities,” he said.

O’Flynn reported Musgrave’s supply chain transformation programme had identified five areas for improvement:

Warehouse replenishment including

  • Forecasting improvements and communications
  • Generating the right supplier order as efficiently as possible to meet store demand
  • Reducing safety stock
  • Managing the warehouse receiving capacity
  • Inbound truck optimisation 

Pull ordering including:

  • Providing the optimal range
  • Generating the order as efficiently as possible
  • The ability to confirm availability and reserve stock
  • To inform if availability is a problem and propose a substitute 
  • If stock is due in to allow a retailer to place it on back order

Pre-ordering

  • To help retailers order the right volumes they need
  • To propose the delivery schedule
  • To ensure the delivery schedule aligns with promotional planning
  • To provide retailers with advance visibility
  • To alert retailers to any changes to delivery schedules

Delivery and receiving 

  • Visibility of delivery
  • The ability to track delivery progress
  • Confidence in pick accuracy
  • To enable the retailer to decide on the level of check-in they wish to perform

Reporting and financials

  • To remove all paper
  • All stock automated to financials
  • All mobile solution

O’Flynn said the programme would be rolled out over the next 18 months spanning store mobility, allocations, warehouse and store replenishment and would utilise warehouse demand prediction to reduce the amount of stock in the business. 

Mercator invests in new formats and concepts to drive market share 

Mercator, the largest retailer in the former Yugoslavian region, is launching new formats and concepts and moving from direct distribution to central distribution in order to increase revenues and market share.

Presenting at Xcelerate 2019, organised by Symphony RetailAI, Kresimir Lezaic, SVP of IT and telecommunications, revealed how Mercator had reversed a declining market share with a new strategy that included a new focus on the customer and reentry into Bosnia and Herzegovina.

Lezaic: new customer focus

The retailer, which is headquartered in Slovenia, also operates in Croatia, Serbia and Montenegro. It serves 5m customers a week and has revenues of €1bn.

Lezaic said Mercator had completed on six key goals:

  • An increase in retail revenue of 5.4%
  • An increase in EBIDTA of 24.7%
  • Remodelling/reopening of 122 stores
  • €30m investment in store development
  • Investment in salaries
  • Investment in store processes including self service, shelf ready packaging and automatic replenishment 

Lezaic reported Mercator was transitioning from six distribution centres to one central distribution centre in Ljubljana, which would increase the amount of centrally distributed product from 79% to 93% and increase the number of stock items from 16,000 to 30,000 but reduce stock holdings from 12 to eight days.

In terms of customer focus, Lezaic said customers appreciated the retailer’s largest network of stores, wide assortment and low pries. Mercator also has the largest loyalty programme in the region and the biggest assortment of local and regional brands.

Lezaic said new store concepts were based on shopper missions and, alongside store refurbishments, Mercator had invested in micro space management. 

In Serbia, Mercator has launched organic only stores; IDEA London, a concept store that aims to evoke the ambience of shopping in London and featuring British products plus a Best of World concept store.

In 2019 Mercator is launching a new supermarket format, a new convenience concept called “Minute”, a Bio Zone Market store featuring the retailer’s healthy and organic food brand, local formats and pop up stores. 

Lezaic said Mercator has refurbished a small store for the Minute format, which is focused on a food to go assortment, private label and fresh with a self service bakery and self checkout. Coffee to go under the Minute brand and fresh orange juice are also available. 

Based in a student location, the store will also appeal to the local residential area for top up shopping after 5pm, Lezaic said.

He revealed that in the store’s first six months of trading revenue had risen by 36%, the customer count was up by 29% and the average shopping basket up 5%.

Further projects are in the pipeline including an online store and plans to combine online and offline insights to personalise offers; self checkout – it is used by 50% of shoppers where it is available – and plans for card only terminals; rolling out M scan and M scan mobile scan to all stores and regions and expansion of the My M loyalty card and digital wallet including a move to digital receipts and e-stickers. 

Lezaic revealed there were also plans for M Box, an unmanned pop-up store, which would be a “playground for new technology”.