Spar International drives profitable growth in digital world

Tom Rose, head of operations Spar International, shared how the voluntary trading supermarket chain was harnessing digital technologies, including AI, to drive profitable growth at Xcelerate 2019 in Paris last week (17-18 September), hosted by Symphony RetailAI.

2018 was a year of growth for Spar International with sales up 5.4% to €35.8bn from 13,000 retail stores in 48 countries and entry into four new markets: Cyprus, Greece, Malta and Sri Lanka, Rose told delegates. This year Spar International opened its first store in Kosovo in June and is planning three other new market entries for 2019.

Rose explored the impact of digital on the Spar International business and changing market conditions.

“It’s the age of the consumer,” he said. Today’s shoppers are web natives, who are well connected and informed and they share information. They want a personal approach and to know where products have come from and how they have been produced. “They are in control of the shopping experience,” Rose said.

Despite the growth in online, retail is not dead and the store is still a key part of the business, Rose affirmed.

Likewise, data has always been available in retail but the ability to analyse it and create predictions has been transformed, he added. 

Similarly, with new levels of connectivity, retailers have the opportunity to connect with shoppers before, during and after the shopping experience, Rose said.

E-commerce and apps

Rose revealed how Spar International was making e-commerce more profitable – Spar International has an online presence in 12 countries worldwide.

In Norway, for example, Spar International is partnering with the courier app Zoopit for online deliveries. The customer selects a two hour delivery slot and the route is passed to a driver via the app. As a result, Spar International only pays for the delivery itself rather than the cost of a delivery fleet waiting to be mobilised and is “making a good profit on e-commerce deliveries”, according to Rose. 

In India, meanwhile, Spar International is deploying an app, which allows customers to place orders for delivery, collection in-store, or which can shopped for in-store. For those customers who have chosen to pick the items themselves, the app navigates them around the store in the most efficient way. The retailer is also using Philips’ LiFi (light fidelity) technology for indoor positioning to identify where shoppers are in the store and provide timely relevant offers along their shopper journey. Rose said the retailer was recording a double digit increase in sales for customers using the app and it was profitable due to the tie-ups with manufacturers on product offers. 

Spar in Austria is using a Snack away app, which enables customers to customise their own sandwich orders. Shoppers personalise their order, select a pick up time and pay on the app. The retailer can detect when the shopper enters the store and their order, which is made fresh and according to their own taste, is put inside a chiller.

In Belgium, an app enables shoppers to self scan, pay and go and is increasing profitability as sales are increasing but without the need for additional colleagues, Rose reported.

Back in India, the location analysis tool that tracks how customers move around the store can be used to enhance customer service. If a shopper is dwelling for a long time in an aisle or area, the technology could trigger a staff member to go and see if they required help. 

Product handling

In Northern Ireland, Spar license holder Henderson Wholesale has introduced wheeled ‘dolly’ units in convenience stores to provide a ready-to-display solution. Rose said the initiative had boosted sales and cut store operating costs. Similarly, in the UK, Spar has focused on product flow in terms of how products are handled and presented. Rose said this has driven significant improvements per case.

Over in China, Spar International is partnering with WeChat mini programmes to book supplier deliveries and allocate time slots based on the characteristics of the delivery. According to Rose, the solution has driven efficiency and increases in volumes with no extra resource required. In Spain, intelligent demand forecasting is improving replenishment efficiency and has reduced stock but improved the service level to retailers, Rose said.

Back in India, Spar International is monitoring assets such as fridges through IoT sensors supplied by Bosch. They track the fridge temperature and energy consumption and can identify when they are likely to go wrong, said Rose. It’s stopped regular, routine maintenance plus it means Spar loses less food through waste as well. 

AI deployments

Spar International is using technology for staff training too. AI-driven gamification has been rolled out across all retailer markets. According to Rose, it adapts to the learning style of each individual person and covers customer service and store operations. Rose said the technology learns from the respondents’ answers and tests them on areas where they need to improve.

Back in Norway, Spar International is using AI to predict waste and target appropriate actions. Stores are sent a yellow warning if they have inventory that is unlikely to sell out before the expiry date. An orange warning is sent if a store has items within 10% of their shelf life and red when items are about to expire. By alerting staff, retailers can reduce the prices or remove the product from shelves, and help to reduce food waste. The customer’s perception of food freshness is also enhanced since they are seeing longer use by dates on products as stores are clearing stock through the business more efficiently. 

In Austria, AI is being cleverly deployed for transport planning and to re-route drivers, based on traffic conditions. The technology takes into account shift patterns and external data such as traffic patterns, recognising that different towns have different traffic patterns on different days of the week, for example. Rose said this has driven significant improvements in transport efficiency and enabled 10% more deliveries but with no additional fleet.

Spar in Austria is working with Google on an AI-driven project to clean up its master data. The retailer uses machine learning to identify anomalies, refine the quality of the data and identify any gaps. The work is driving improvements on websites and in logistics due to more accurate planning on volumes, Rose said.