New research has shown that grocery retailers are struggling to optimise stock replenishment processes, with almost half saying that their decisions are still based on ‘gut feeling’.
Retail applications provider Blue Yonder surveyed 750 grocery managers and directors in the US, UK, Germany and France.
It found that, in spite of a rise in accurate algorithms for automated replenishment and demand planning, 46% of surveyed directors in the UK say that replenishment is still an entirely manual process and the same amount saying that it was fully automated. A further 30% believed that instinct-based decision making was slowing them down.
Of the four countries involved in Blue Yonder’s survey, Germany had the highest proportion of respondents using manual or partially automated systems, with just one-third of managers who had fully automated their stock replenishment processes. The UK had the highest, with France a close second.
Blue Yonder founder Michael Feindt argued that full automation could provide a competitive advantage in the retail environment.
He said: “Getting replenishment right is critical to ensure the shopper can get what they want, when they want it and through the channel they want to purchase it. This is particularly difficult in the area of fresh food, where a fine balance needs to be struck between availability and waste. With increasing customer demand for immediate availability on all products, grocery retailers need the marginal gains that machine learning algorithms and automation can offer in delivering the best decisions on a daily basis for their replenishment strategies.”
More than nine out of ten grocery retailers said that they thought they met customer expectations of product availability, while 81% believed that they deliver the right quality and freshness. That is in spite of wasting 4 million tons of food in the UK alone every year, and nine in ten retail managers believing that consumers will buy into misshapen fruit and vegetables.
The Kaufland Group operates supermarkets in Germany, Czech Republic, Slovakia, Poland, Croatia, Romania and Bulgaria.
Ralph Dausch, executive vice president of Kaufland, explained the rationale for using automated goods management: “For us it is absolutely critical to success to have the required amount of fresh meat available in each store. The automated goods replenishment solution precisely forecasts sales, which plays a central role. Our work with Blue Yonder has significantly optimised our processes. As a result, our products have a higher quality of freshness and we have less waste, whilst being able to maintain the availability of products.”
© FoodBev Media Ltd 2019