To save costs and reduce waste, grocery retailers and their supplier partners continue to upgrade their inventory management software. Cutting-edge AI, camera vision and other technologies are making those solutions better than ever.
In 2023, Invafresh announced new partnerships with retailers including Winco and Price Chopper/Market 32 to improve their inventory management systems.
All are going well, said Stephen Midgley, Invafresh’s vice president of marketing.
With Invafresh’s inventory management software, he said, Invafresh’s customers have seen a 50% reduction in turnaround time for financial reporting, a 50% reduction of number counting errors, and a 25% reduction in time to complete in-store fresh inventory counts.
“Our customers continue to experience positive momentum by using our AI-enhanced Fresh Retail Platform to optimize their fresh retail operations to increase revenue, reduce waste, and improve the allocation of labor resources to deliver a fresh shopping experience to their shoppers.”
Partnering with Invafresh, Price Chopper has been able to prevent 20 tons of fresh food from going to waste each week, he said.
Another Invafresh client, Federated Co-op, has experienced double digit revenue growth in their cut fruit and vegetable program by using Invafresh.
And Invafresh has helped Albertsons with improved production accuracy across their 2200+ stores. Invafresh’s goal, Midgley said, is to help its customers have the “right inventory at the right time.”
The benefits of achieving that goal include optimizing labor for in-store financial counts, improving the accuracy of those counts, automating inventory reporting, and increasing in-stock availability of fresh items.
Analytics and data are fundamentally changing the way the grocery industry operates, Midgley said.
“Analytics is becoming increasingly important to drive decision-making and spot rapidly changing shopper trends. As a result, grocery retailers need inventory management software that will enable them to generate customized reports on inventory levels, stockouts, and sales data and offer prescriptive analytics to forecast demand and optimize inventory levels, and track and report compliance and sustainability metrics.”
Invafresh’s customers, he said, achieve visibility through data, enabling them with an inventory view both at the individual store level and across their entire store operations.
The problem is not the amount of data available for analysis, Midgley said — retailers have plenty of that.
The challenge is figuring out how to harness all of it into actionable insight.
With the right inventory management software, it’s possible. Having the right tools, Midgley said, is critical to improving margins, decreasing shrink, and building customer loyalty.
“Retailers know that incorrect fresh item counts due to improper processes can adversely impact store revenues, and relying primarily on manual reports to monitor fresh production performance is prone to error and requires significant labor hours.”
Advanced inventory management solutions can analyze historical sales data, seasonal trends, and external factors to provide accurate forecasts, ensuring that retailers have the right products in stock at the right time, reducing waste and improving profitability.
Help for independents
A new player on the scene, Empower Fresh, is focusing its efforts on tailoring its software to help independent grocers improve their inventory management and other functions.
The company, founded in June, is starting with a concentration in fresh produce departments, said Robert Austin, senior vice president of sales. But eventually Empower Fresh plans to provide inventory management and other services to all fresh departments. Next up, at the request of a customer, is dairy.
Demand for better inventory management solutions in the grocery fresh space is huge, Austin said.
“What we’ve learned is that there’s an immense need in the independent world for access to data in real time, and inventory management is a big part of it.”
Historically, Austin said, too many inventory management solutions started in center-store and then balked at doing the same for fresh because there were too complicated.
“Produce and other fresh departments are left out on an island because they have too many variables. Independents just accepted losses in departments because they couldn’t track it.”
In produce, those losses could reach 15% per month, Austin said.Empower Fresh’s goal is to turn those unknowns into knowns.
“We are proving that you can track it, you just have to put a lot more work into it. We don’t mind doing it. We’re produce people. And we can interpret the data in a way customers can understand. And when we show them the ROI, it dwarfs the cost (of the Empower Fresh software).”
In inventory management, too many retailers still are forced to wait a month before analyzing their losses and trying to find ways to reduce them.
“If I can look at yesterday’s data, I can make changes today, and not suffer 30 days of losses,” Austin said, describing what Empower Fresh’s software is capable of.
“And it has to be the right data, so they can understand, ‘This is the change I have to make.’”
Empower Fresh’s goal is to turn their customers in to “truck to shelf” operations, with very little inventory sitting in back coolers, 10 to 20% of which might get thrown out every week.
To help achieve that goal, Artificial Intelligence is playing a crucial role, Austin said.
“AI is the secret sauce to inventory management. We take price in the AI we’re building. We’re transforming produce managers from an order taker into an inventory manager.”
With Empower Fresh’s software, “anyone in the department can write a really solid order now,” he added.
Ninety-two percent of users’ direct orders get accepted. And that, Austin said, is how you end up with a truck-to-shelf business.
AI and camera vision are among the technologies that are transforming how food retailers and their supplier partners manage inventory, said Wynne Barrett, a partner in Hopkinton, Mass.-based Jera Concepts. Camera vision working in synch with AI, for example, can create heat maps to track people as they move through stores, helping not only with inventory but with how stores themselves are designed, among other new applications, Barrett said.
Traditional modes of inventory management are good at tracking what gets sold and replacing it in an efficient manner. What they can’t do, Barrett said, is account for other ways in which product disappears from shelves — through theft, for example. This is especially important in today’s food retail marketplace, where the use of self-checkout continues to expand. When people are responsible for checking out their own items, there’s more temptation — and opportunity — for theft.
“AI and camera vision could help reduce that,” Barrett said. One of the calculations many food retailers must make, though, is how much they’re willing to pay for cutting-edge inventory management.
This article is an excerpt from the February 2024 issue of Supermarket Perimeter. You can read the entire Inventory Management feature and more in the digital edition here.