UK Retailer Shows Potential Future for AI in U.S. Grocery
A new partnership between the UK's fourth-largest grocer and a London-based predictive analytics company could offer a glimpse into the future of demand forecasting and artificial intelligence for U.S. grocers.
Currently in talks with grocers stateside and developing a go-to-market strategy here, Blue Yonder has partnered with Morrisons to optimize replenishment and automate ordering of 26,000 shelf-stable SKUs in all 491 of its stores. The Morrisons team has worked with the technology provider to make the ordering system simpler and easy to use, and is reducing shelf gaps by up to 30 percent.
The system automatically analyzes sales data and other data sources from Morrisons and combines them with external data such as weather forecasts and public holidays. Through the automated analysis of the data, the system can predict the level of demand down to the individual product and store location. It then fully automates ordering per store, per product.
“Our biggest new initiative has been our new automated ordering system,” said Morrisons CEO David Potts in the grocer's 2016-2017 preliminary results announcement. “The system is capital light, utilizing cloud technology and store-specific historic sales data to forecast stock requirements. It is reducing costs and stock levels, while also saving time for colleagues, and providing a better offer for customers.”
Using machine-learning technology, Blue Yonder's Replenishment Optimization learns as it goes and can use a vast and complex amount of data to make highly accurate ordering decisions. Employees no longer need to spend time manually ordering goods, freeing them up for other tasks, and customer satisfaction rises via improve in-store availability.
Alex Siskos is heading Blue Yonder's U.S. operations. He has 22 years of retail experience in category management, replenishment, trade promotion management and advanced analytics from companies such as Accenture, Nielsen, Walgreens, Crossmark and various CPGs.