Earth Fare Leverages AI to Optimize Promos

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Earth Fare Leverages AI to Optimize Promos

By Randy Hofbauer, EnsembleIQ - 07/19/2017

Earth Fare has reported solid improvements in year-on-year top-line sales, a year after adopting artificial-intelligence (AI) technology to help optimize promotions, determining which items to promote and how often to do so.

The Asheville, N.C.-based natural and organic grocer, which partnered with Toronto-based AI software company Daisy Intelligence, operates 41 stores and is currently working to grow store units by more than 25 percent annually. Given the competitive landscape, it sought a significant advantage to enable its merchandising team to leverage powerful insights locked within its significant volume of historical sales data.

AI-driven insights – which can increase total sales by 3 percent, according to Daisy – helped add significant efficiency and predictability to the sales-planning process, which previously posed challenges. Before deploying the solution, Earth Fare’s merchandising and marketing teams had to earmark numerous hours each week for determining which products to promote, and the demands for time to drive innovation for new store activations were challenged as the company began to activate its robust pipeline. At the same time, grocery deflation presented an additional challenge to overcome.

Since the deployment, Earth Fare’s category managers have been using Daisy’s weekly promotional recommendations to improve associated sales growth and guide decision-making. One year after launching the solution, Earth Fare’s team has settled into a rhythm of using it to drive promotional planning eight weeks out, while ensuring that human judgment plays a role in fine-turning specific promotions as they grow near, based on dynamic factors such as supply chain issues and pricing of perishables.

“Most of our team is finding they are spending less time trying to find the right data and understand it, and more time addressing the more critical elements of their jobs,” said Earth Fare CFO Scott Little, who reported a “meaningful lift” in basket size and trips without any additional margin cost.

Added Daisy CEO Gary Saarenvirta: “Retailers have long sought to increase the effectiveness of the weekly ad or promotion, albeit without a great deal of success. However, now that we can deploy artificial intelligence to power the gathering of deep insights and recommendations, forward-thinking retailers like Earth Fare and others are making headway towards utilizing more math to understand what products to promote, as well as optimize pricing and demand forecasting.”

Click here to access a case study detailing the initiative from the Center for Advancing Retail & Technology.