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How HIVERY Curate can optimize their category management business using AI

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What you will learn from this podcast:
• When optimization or applied mathematics was first used to solve real-world problems. We go back to 1947 and George B. Dantzig, when not only the first computer program was written but also new applied mathematics methods were invented, now called linear programming.

• The fascinating world of Applied Mathematics. Mark breaks down everything from Operations Research, Linear Programming (using 1 and 0.5 as inputs), Complete Methods (solving problems optimally), Heuristic Methods (solving problems faster although not always optimally), and Genetic Algorithms (inspired by nature's way of optimizing) to relatively modern methods like Integer Linear Programming (using 0, 1 or 2 as inputs). These methods have previously advanced the military to optimize the distribution of weaponry. Now, these methods are used by commercial industries and have found their way into category management to ensure the right products are in the right, specific shelf space at the right, specific store.

• Mark goes deep into explaining his fascinating research: "A model-based genetic algorithm framework for constrained optimisation problems"; and his new framework that solves real-world problems differently and more efficiently.

• Why HIVERY Curate (formally HIVERY Propel) is different to any other planogram category management optimization solution out there. Marks explains how he has applied and combined optimization techniques (i.e. how much of product X to put on that specific shelf in that specific store) with machine learning methods (what product to put (X or Y or Z) on that specific shelf in that specific store) along with the secret ingredient; the constraints that make HIVERY Curate category recommendations realistic and implementable at a store-level.

• If you are interested in learning about how our world can be run more efficiently, love maths and solving real problems. This is a must-listen.

Resources:
www.linkedin.com/in/mark-lawrenson/
dl.acm.org/doi/10.1145/3067695.3076041
https://news.stanford.edu/news/2005/may25/dantzigobit-052505.html

Mark Lawrenson has graduated with honours in mathematical applications and computations from The Australian National University and was previously a researcher at CSIRO/Data61, the world's leading Australian research and data science agency. At HIVERY Mark is the product lead of HIVERY Curate - the world’s first truly hyper-local category management solution. Mark has several patents under his name and has published many research papers, namely "A model-based genetic algorithm framework for constrained optimization problems" where he presents a new hybrid optimization framework that can be used to solve constrained optimization problems differently.

In this podcast, Mark explains the science of optimization methods; the science of finding the best alternative from many alternatives. From wars, supply chain distribution to bakers and their bread to real category optimization.

Mark Lawrenson on the science of optimization methods and solving real-world problems more optimally

In this podcast, Mark explains the science of optimization methods; the science of finding the best alternative from many alternatives. From wars, supply chain distribution to bakers and their bread to real category optimization. 

Mark Lawrenson has graduated with honours in mathematical applications and computations from The Australian National University and was previously a researcher at CSIRO/Data61, the world's leading Australian research and data science agency. At HIVERY Mark is the product lead of HIVERY Curate - the world’s first truly hyper-local category management solution. Mark has several patents under his name and has published many research papers, namely "A model-based genetic algorithm framework for constrained optimization problems" where he presents a new hybrid optimization framework that can be used to solve constrained optimization problems differently.  

What you will learn from this podcast:
• When optimization or applied mathematics was first used to solve real-world problems. We go back to 1947 and George B. Dantzig, when not only the first computer program was written but also new applied mathematics methods were invented, now called linear programming.

• The fascinating world of Applied Mathematics. Mark breaks down everything from Operations Research, Linear Programming (using 1 and 0.5 as inputs), Complete Methods (solving problems optimally), Heuristic Methods (solving problems faster although not always optimally), and Genetic Algorithms (inspired by nature's way of optimizing) to relatively modern methods like Integer Linear Programming (using 0, 1 or 2 as inputs). These methods have previously advanced the military to optimize the distribution of weaponry. Now, these methods are used by commercial industries and have found their way into category management to ensure the right products are in the right, specific shelf space at the right, specific store.

• Mark goes deep into explaining his fascinating research: "A model-based genetic algorithm framework for constrained optimisation problems"; and his new framework that solves real-world problems differently and more efficiently.

• Why HIVERY Curate (formally HIVERY Propel) is different to any other planogram category management optimization solution out there. Marks explains how he has applied and combined optimization techniques (i.e. how much of product X to put on that specific shelf in that specific store) with machine learning methods (what product to put (X or Y or Z) on that specific shelf in that specific store) along with the secret ingredient; the constraints that make HIVERY Curate category recommendations realistic and implementable at a store-level.

• If you are interested in learning about how our world can be run more efficiently, love maths and solving real problems. This is a must-listen.

Resources:
https://www.linkedin.com/in/mark-lawrenson/
https://dl.acm.org/doi/10.1145/3067695.3076041
https://news.stanford.edu/news/2005/may25/dantzigobit-052505.html

Mark Lawrenson on the science of optimization methods: finding the best alternative from many by Retail Mavericks

実証実験では最大50％※以上の売上増加も！全体では5.27％※の増加を記録！！
飲料補充の効率化で、業界の働き方改革も実現！
※近似環境でAIシステムを使用しなかった自販機との同一期間比較 ... learn more

豪州AIスタートアップHIVERYがJR東日本ウォータービジネス社と事業展開〜「HIVERY Enhance」をエキナカ自販機に本格導入〜

The two companies have been collaborating since 2017, leveraging Hivery's AI technology to optimize product assortment and column space for individual vending machines in Japan. Validated results from proof of concepts increased sales by 5.27％overall, up to a maximum of more than 50%, as well as reducing replenishment trips and improving operational productivity... learn more

Hivery, an Australia based artificial intelligence provider, will roll out its AI driven vending machine management solution to 6,000 machines across East Japan Railway's train stations, according to a press release.

Retail AI pioneer, HIVERY (headquartered in Sydney, Australia) and JR East Water Business (headquartered in Tokyo, Japan), a subsidiary of East Japan Railway Company, have agreed to rollout HIVERY Enhance - an AI-driven vending machine optimization solution, to 6,000 vending machines across East Japan Railway’s train stations.

Validated results from numerous PoCs (proof of concepts) increased sales by 5.27％ [1] overall, up to a maximum of over 50%, as well as simultaneously reducing replenishment trips and improving operational productivity.  

HIVERY and JR East Water Business have been collaborating since 2017, leveraging HIVERY’s latest AI technology to optimize product assortment and column space for individual vending machines in Japan. During the winter of 2019, the results of HIVERY Enhance showed an overall increase in sales volume by 5.27%, up to a maximum of over 50%. Furthermore, given labor storages due to a declining population, there has been growing pressure to improve operational productivity within the Japanese vending industry. HIVERY Enhance enabled JR East Water Business to streamline operations and reduce replenishment trips by automatically recommending the optimal product assortment and quantity for their vending machines. Based on this success, JR East Water Business has agreed to rollout HIVERY Enhance across 6,000 vending machines on their train stations for East Japan Railway - a first in Japan.

Until now, product assortment selection had been decided by individual operators (drivers) who are responsible for replenishing the vending machines at their designated locations. Given those decisions have been based on the operator’s accumulated experience and intuition over many years, it has been an ongoing challenge to transfer that knowledge to new operators and maintain a level of quality. HIVERY Enhance leverages the power of AI and JR East Water Business’ point of sales (POS) data, to automatically determine which products need to be stocked in which vending machine, as well as the optimal timing to swap products for individual machines. This enables any operator to efficiently make the right product assortment choices that will lead to a profitable outcome. 

Select products that are likely to sell well – By analyzing the vast amount of sales data from the full fleet of vending machines, it identifies patterns in the sales data and identifies products that are likely to sell well in any particular location.

Optimize product assortment - By understanding the demand for individual products and the effects of cannibalization of demand between products in each location, it can determine which products should be inserted and which should be taken out, to lead to the optimal outcome.

Reduce replenishment trips - From the demand forecasts of products in any location, it can calculate the number of days before each product is likely to go out of stock and recommend the optimal quantity and column allocation to maximize the time between replenishment trips, thereby reducing labor costs.

Optimizing a  group of vending machines - Rather than only focusing on individual vending machines, it can also assess a group of banked vending machines in the same area at the same time, and optimize the products for the entire area as if it were one large vending machine.

By ingesting vast arrays of data and incorporating intricate operational rules as well as physical and business constraints into its algorithm, HIVERY Enhance can instantaneously provide executable recommendations for the optimal product assortment and column configurations for both an individual as well as a group of vending machines. Furthermore, by leveraging weather data, it can respond to changes in seasonal patterns and suggest the optimal time to insert hot and cold products, while taking into account the effects of cannibalization for the product mix at each location, thereby providing the optimal product assortment at any given time.

In March 2018, HIVERY invited JR East Water Business’s Vending Division team to its Sydney headquarters to meet with one of HIVERY's first customers, Coca-Cola Amatil, to exchange ideas and share their experience and best practice for implementing cutting edge technology for their respective vending businesses.

“We believe the combination of the rich human experience of our operators cultivated over many years and the utilization of big data is our greatest strength.  With HIVERY Enhance, we can realise that vision, and we aim to establish a new platform for our vending machine operations that will help us recover from the impact of this year’s pandemic, as well as improve worker productivity which has been an issue for us for many years.” 

~ Yuta Higashino, Manager at JR East Water Business

Moving into category management: the $US900[2] billion opportunity.

HIVERY Enhance is just the beginning. HIVERY has released its new offering - HIVERY Curate  - The world’s first truly hyper-local category management solution, helping companies like Coca-Cola and Walmart transform category management. HIVERY Curate delivers store-level recommendations with sophisticated self-learning AI algorithms that discover buying patterns at each store and make product assortment and space recommendations from this, resulting in a 10X return on investment to date.

HIVERY is a multi-award-winning pioneer of hyper-local retailing, combining Artificial Intelligence (AI), operations research, and human-centered design to help Consumer Packaged Goods (CPG) manufacturers and retailers generate a return on physical space investments. HIVERY is transforming category management and retail trade promotion, with innovative algorithms sourced from Australia's national science agency - CSIRO's Data61. HIVERY is venture-backed and headquartered in Sydney, Australia, with offices in the USA and Japan. HIVERY was founded on the vision that Data Has A Better Idea[TM] - and we’re working together with our clients to uncover its full potential.


Innovation Leaders Summit Tokyo (ILS) 3rd~12th March 2021

HIVERY has been selected by Austrade (The Australian Trade and Investment Commission) and the NSW Government of Australia, as one of 2 promising startups to participate in next year’s Innovation Leaders’ Summit.  Details of the event can be found here: https://ils.tokyo/

[English] HIVERY Press Release 09.12.2020.pdf

[Japanese] HIVERY Press Release 09.12.2020.pdf

JR East Water Business Co media release  

[1] Compared to vending machines not leveraging HIVERY Enhance during the same period.

[2] “Out of Stocks, Out of Luck How Retailers Alienate Customers and Lose Billions Due to Poor Inventory Practices” IHL Group 2018, G. Buzek

Hyperlocal retailing pioneer HIVERY (headquartered in Sydney, Australia) and JR East Water Business (headquartered in Tokyo, Japan), a subsidiary of East Japan Railway Company, have agreed to rollout HIVERY Enhance, an AI driven vending machine optimisation solution, to 6,000 vending machines across East Japan Railway’s train stations.

Australian AI startup HIVERY partners with JR East Water Business to optimise vending machines in Japan

Australian AI startup, HIVERY, partners with JR East Water Business to optimize vending machines in Japan.

What you will learn from this podcast:
• Zach's career journey from baseball to Walmart to his own company and HIVERY. Zach shares his insights into the lack of advancement of retail technology during this journey in category management.

• Zach explores the "snowflake" effect of product categories and space; how each store is so different (as a snowflake), yet when it comes to space assortment, the retail industry continues treating each store and their SKU supply the same.

• Why Zach, after over 11 years at Walmart with titles like Frozen Food Senior Buyer, Merchandising Director, and VP of Beverages Merchandising decided to "jump ship" to HIVERY, a young AI startup?

• Zach provides a sneak preview of product innovation at HIVERY; and how customers play a critical role in this process.

•. Zach dives into key problem sets faced by a wide retail segment from wholesale networks to traditional grocery stores in space, assortment, and category scenario planning.

• Lastly, Zach gives career advice and shares his insights into personal and professional development, innovating from within and facilitating change.

With 20+ years of retail experience, Zach Simpson is the Director of Customer Success and Sales at HIVERY and the Founder of Relevance Retail, an innovative service and strategy platform simplifying the omni-channel commerce evolution for suppliers, manufacturers, retailers, and technology service providers.

Zach Simpson on shifts in category management, artificial intelligence and making career changes

With 20+ years of retail experience, Zach Simpson is the Director of Customer Success and Sales at HIVERY and the Founder of Relevance Retail, an innovative service and strategy platform simplifying the omni-channel commerce evolution for suppliers, manufacturers, retailers, and technology service providers.

What you will learn from this podcast:
• Zach's career journey from baseball to Walmart to his own company and HIVERY. Zach shares his insights into the lack of advancement of retail technology during this journey in category management. 

• Zach explores the "snowflake" effect of product categories and space; how each store is so different (as a snowflake), yet when it comes to space assortment, the retail industry continues treating each store and their SKU supply the same. 

• Why Zach, after over 11 years at Walmart with titles like Frozen Food Senior Buyer, Merchandising Director, and VP of Beverages Merchandising decided to "jump ship" to HIVERY, a young AI startup? 

• Zach provides a sneak preview of product innovation at HIVERY; and how customers play a critical role in this process.

•. Zach dives into key problem sets faced by a wide retail segment from wholesale networks to traditional grocery stores in space, assortment, and category scenario planning.

• Lastly, Zach gives career advice and shares his insights into personal and professional development, innovating from within and facilitating change.

Zach Simpson on shifts in category management, artificial intelligence and making career changes by Retail Mavericks

Why Food Retailers Need To Embrace AI? In this Lost in the Supermarket episode, Phil Lempert talks with Jason Hosking, CEO & Co-Founder of HIVERY, The worlds first category management optimization solution.

For more than 25 years, Phil Lempert, an expert analyst on consumer behavior, marketing trends, new products, and the changing retail landscape, has identified and explained impending trends to consumers and some of the most prestigious companies worldwide.  In this podcast he speaks with Jason Hosking on AI and retail.

The Supermarket Guru chats with CEO of HIVERY on AI

Why Food Retailers Need To Embrace AI

What you will learn from this podcast:
• Why getting the right product at the right price and in the right amount is becoming more and more difficult for both CPG manufacturers and retailers. Listen to how Badger Technologies and robotics are solving this through "seeing".

• Tim explores the concept of "hidden products" - products that are not "shown" in the correct manner on shelves - as well as "hidden price promotions". Promotions are often delayed due to the slow process of getting the actual new sales tag on the shelf or the reverse, with sale promotion tags hung for too long and appearing out of date. With robotic technologies like Badger, old challenges can be addressed effectively.

• How robotics can not only assess the status of products on the shelf and price promotion compliance but also help grocery stores, supermarkets and hypermarkets assess floors for spills and hazardous conditions. This helps both shoppers and retail staff encouraging visits and ensuring stores are both clean and safe.

• More interestingly, some larger supermarkets and discount stores are using robotics to assess promotional display compliance in aisles ensuring that every marketing dollar is spent accordingly. Display compliance gives CPG manufacturers an "eye" on what is happening in-store and potentially issues contractual penalties for retailers' non-compliance.

• Tim also covers the challenges in having robots in supermarket stores and implications of human traffic and their advantages: an ability to scan 40,000 individual store products, responding to hazardous conditions, promotional compliance - all in around 3 hours!

• Will robots replace supermarket workers? Tim shares his views on robots and the human labour force; you will be surprised with his insight.

• We close with a fascinating view of future robotics in retail stores. Can robots sense "freshness" and ensure our fresh fruit, vegetables and dairy are about to expire?

Tim Rowland is CEO of Badger Technologies, a product division of Jabil - a $26 billion technology and supply chain solutions global company. Badger Technologies provides actionable data and analytics for retail operations through automation solutions that include a fully autonomous robot to address out-of-stocks, planogram compliance, price integrity, and other operational inefficiencies.

The future of retail robotics: from out of stocks, promotional price tags and display compliance to seeing hazards and potentially smelling freshness

Tim Rowland on retail robotics and the future of senses

The future of retail robotics: from out of stocks, promotional price tags and display compliance to seeing hazards and potentially smelling freshness  

Tim Rowland is CEO of Badger Technologies, a product division of Jabil - a $26 billion technology and supply chain solutions global company. Badger Technologies provides actionable data and analytics for retail operations through automation solutions that include a fully autonomous robot to address out-of-stocks, planogram compliance, price integrity, and other operational inefficiencies.

What you will learn in this podcast:
• Why getting the right product at the right price and in the right amount is becoming more and more difficult for both CPG manufacturers and retailers. Listen to how Badger Technologies and robotics are solving this through "seeing".

• Tim explores the concept of "hidden products" - products that are not "shown" in the correct manner on shelves - as well as "hidden price promotions". Promotions are often delayed due to the slow process of getting the actual new sales tag on the shelf or the reverse, with sale promotion tags hung for too long and appearing out of date. With robotic technologies like Badger, old challenges can be addressed effectively.

• How robotics can not only assess the status of products on the shelf and price promotion compliance but also help grocery stores, supermarkets and hypermarkets assess floors for spills and hazardous conditions. This helps both shoppers and retail staff encouraging visits and ensuring stores are both clean and safe.

• More interestingly, some larger supermarkets and discount stores are using robotics to assess promotional display compliance in aisles ensuring that every marketing dollar is spent accordingly. Display compliance gives CPG manufacturers an "eye" on what is happening in-store and potentially issues contractual penalties for retailers' non-compliance.  

• Tim also covers the challenges in having robots in supermarket stores and implications of human traffic and their advantages: an ability to scan 40,000 individual store products, responding to hazardous conditions, promotional compliance - all in around 3 hours!

• Will robots replace supermarket workers? Tim shares his views on robots and the human labour force; you will be surprised with his insight.

• We close with a fascinating view of future robotics in retail stores.  Can robots sense "freshness" and ensure our fresh fruit, vegetables and dairy are about to expire?

Tim Rowland on retail robotics and the future of senses by Retail Mavericks

Expert food industry analyst and journalist, Phil Lempert, has a candid conversation with HIVERY's CEO, Jason Hosking, on future of retail, category management and AI. Watch this episode of Lost in the Supermarket... watch video

Future of retail, category management and AI (video)

HIVERY is taking data science to the next level by adding an additional layer with prescriptive analysis – what should happen – removing human effort to understand the data, as well as human bias that sways future decision-making....read more

How an Aussie analytics start-up is helping retailers with ROI

Exports of Australian digital tech are expected to triple by 2030 and HIVERY is part of this.   Australia’s tech startup and innovation ecosystem is rapidly growing, attracting global attention and increasing venture capital funding, HIVERY has certainty experience this.

Learn about this sector's rapid growth in Austrade's new Australian Digital Innovation Report.  The Australian Trade and Investment Commission (Austrade) is the Australian Government’s international trade promotion and investment attraction agency.

australian-digital-innovation-on-the-rise.pdf

 Download now or visit Austrade site for more information

HIVERY featured on Austrade's "Australian Digital Innovation on the Rise'

In this podcast episode we explore:
• What "convenience" means in retail in the digital era (and pandemic). Gone are the days when convenience was about pre-packaged "TV dinners"; today the scope of convenience is expanded to searching for the right products, getting the right price, and having them delivered to your door - right here, right now.

• The issues around retailing, especially around assortment planning. How can you introduce new products while balancing existing and considering new retail experiences, services and space?

• Great strategies for retailers to consider to navigate these unprecedented times.

• Hyper-personalisation and whether it is legal when it comes to prices.

• What does assortment planning mean? A large assortment range can bring large diverse groups to your store. However, you then face the challenge to decide what assortment and how much of it is needed. You need to curate the store carefully. You don't want your consumers to experience "choice overload" nor out of stocks. Dr. Gielens covers the balancing act of attracting traffic into the store (large assortment to attract) and initiating conversation (right assortment to buy). The key word you will hear in this podcast is "curate". This is why leveraging new technologies such as AI can help retailers put the right assortment in their stores.

• Lastly, Dr. Gielens shared some good resources for further reading.

Her research focuses on the dynamics in digital and brick-and-mortar retailing and relationships between retailers and brand manufacturers. She teaches courses in retailing and channel management.

Her work has been published in leading journals such as the Journal of Marketing, Journal of Marketing Research, The International Journal of Research in Marketing (IJRM), Journal of Consumer Research and Marketing Science.

For two papers she received the long-term impact award from the American Marketing Association. She also received a nomination for the Paul E. Green Award and the Shelby D. Hunt/Harold H. Maynard Award. Two other articles received the IJRM Best Article Award. She serves as an associate editor for the Journal of Marketing and the Journal of International Marketing. She is also on the editorial board of the Journal of Retailing and the International Journal of Research in Marketing.

Dr. Gielens edited “Handbook of Research on Retailing” (Edward-Elgar Publishing, 2018). The book offers insights and advice on the major shifts in the retailing landscape caused by the digital marketing revolution.

She has worked extensively with business practitioners, both retailers and brand manufacturers. Her work has received substantial media attention, both nationally and internationally, and she is often consulted by the media to comment on significant retail events.

She received her PhD in applied economics from Catholic University Leuven. She also received her MS in applied economics and a degree in applied economic science, both summa cum laude, from Catholic University Leuven.

Meet Dr Katrijn Gielens,

Her research focuses on the dynamics in digital and brick-and-mortar retailing and relationships between retailers and brand manufacturers. She teaches courses in retailing and channel management.

Her work has been published in leading journals such as the Journal of Marketing, Journal of Marketing Research, The International Journal of Research in Marketing (IJRM), Journal of Consumer Research and Marketing Science.

For two papers she received the long-term impact award from the American Marketing Association. She also received a nomination for the Paul E. Green Award and the Shelby D. Hunt/Harold H. Maynard Award. Two other articles received the IJRM Best Article Award. She serves as an associate editor for the Journal of Marketing and the Journal of International Marketing. She is also on the editorial board of the Journal of Retailing and the International Journal of Research in Marketing.

Dr. Gielens edited “Handbook of Research on Retailing” (Edward-Elgar Publishing, 2018). The book offers insights and advice on the major shifts in the retailing landscape caused by the digital marketing revolution.

She has worked extensively with business practitioners, both retailers and brand manufacturers. Her work has received substantial media attention, both nationally and internationally, and she is often consulted by the media to comment on significant retail events.

She received her PhD in applied economics from Catholic University Leuven. She also received her MS in applied economics and a degree in applied economic science, both summa cum laude, from Catholic University Leuven.

In this podcast episode we explore:
• What "convenience" means in retail in the digital era (and pandemic). Gone are the days when convenience was about pre-packaged "TV dinners"; today the scope of convenience is expanded to searching for the right products, getting the right price, and having them delivered to your door - right here, right now.

• The issues around retailing, especially around assortment planning. How can you introduce new products while balancing existing and considering new retail experiences, services and space?

• Great strategies for retailers to consider to navigate these unprecedented times. 

• Hyper-personalisation and whether it is legal when it comes to prices.

• What does assortment planning mean? A large assortment range can bring large diverse groups to your store. However, you then face the challenge to decide what assortment and how much of it is needed. You need to curate the store carefully. You don't want your consumers to experience "choice overload" nor out of stocks. Dr. Gielens covers the balancing act of attracting traffic into the store (large assortment to attract) and initiating conversation (right assortment to buy). The key word you will hear in this podcast is "curate". This is why leveraging new technologies such as AI can help retailers put the right assortment in their stores.

• Lastly, Dr. Gielens shared some good resources for further reading.

Dr Katrijn Gielens on the disruptive transformation of retail and strategies to adapt by Retail Mavericks

Dr Katrijn Gielens on the disruptive transformation of retail and strategies to adapt

On Thursday 15 October, Technical Officer at HIVERY, Andy McQuarrie and co-founder, Matt Robards will be speaking at the Databricks APAC Industry Leadership Forums. Backed by The Coca-Cola Company, CSIRO and Blackbird Ventures, HIVERY is pioneering hyper-local retailing.... read more

HIVERY to present at Databricks APAC Industry Leadership Forum

Recognized as “The Supermarket Guru”, Phil Lempert is one of America’s leading consumer trend-watchers and analysts on consumer behavior, marketing trends, new products and the changing retail and supermarket landscape.

Phil brought us up to date with the ways the pandemic has been altering consumers’ shopping behavior and how these changes have been shifting both the retail, supermarketing and consumer packaged goods (CPG) sectors.

What is the current state of retailers and supermarkets?

Since the onset of COVID-19 crisis, things have been far from usual for retailers and supermarkets. For one, Phil emphasized that physical distancing, health protocols and safety measures have been limiting stores in providing a pleasant shopping experience for consumers. 

“We’ve gone from having a very pleasant experience where supermarkets built themselves to be experiential, to this. No one right now can present a terrific experience. From food carts, self-service bars to salad bars - everything they’ve been doing to provide an inviting shopping experience is now out the window.”

Phil also mentioned how customers have become more concerned about their health. Due to the rising cases of COVID-19, many people now resort to the “new normal” online shopping, curbside pickup and delivery. As expected, these come with serious implications for retailers. 

“Pre-COVID-19, the average American went 2.2 times a week to buy groceries and spent around 22 mins on every shopping trip. Now, however, the average American just goes once a week, in and out as quickly as possible.

To make stores more efficient, we will see many retailers reducing their number of skews on supermarket shelves. You can also expect online ordering, store fulfilment, in-store pickup and delivery to become popular approaches. As a result, a lot of stores will be decreasing their sizes.”

How do these recent events affect product assortment and shelf space?

The pandemic has brought significant changes to the formats and operations of retailers and supermarkets. It is expected, then, that variations around shelf space and product assortment will also arise.

Phil delved into how these retail spaces will be leveraged today and in the post-COVID-19 world:

1. A limited supply of certain commodities

A lot of grocers are worried about the possibility of a second phase of the pandemic. Aside from the health implications, they want to figure out how it will affect the supply chain. 

Phil explained, “When the pandemic began, Americans had experienced not having certain products on supermarkets’ shelves for the first time. They are wondering if it will happen again and the thought scares them. As such, they were buying everything they could – that is, hoarding.”

The limited supply, then, has left some shelves empty for months. For instance, Clorox’s disinfectant wipes will not be able to stock up until mid-2021. So, to provide people with alternatives, retailers must modify the product variations they offer.

2. Reconfiguration of stores as “ghost supermarkets” 

Phil highlighted why there is a major reconfiguration of stores right now. 

“Stores are being limited to 20-30% occupancy, which takes a toll on their bottom line. To keep the operations going, we are now seeing ghost supermarkets that focus mainly on delivery.”

He also believes that while the online assortment range can cater for over 40 thousand products, physical stores will see a reduction to 20 or even 15 thousand products. This means that a smaller assortment at a store-specific level must be optimized to gain profits.

3. Difficulty in attracting retailers’ attention with new products

“The whole new product introduction system is under evaluation as retailers start to cut products and space,” Phil stated.

With category "resets" happening just twice a year and now this limited launch of new products, it’s anticipated that there may be less variety of products available going forward.

4. Unpredictable demand that limits retailers 

Who would’ve thought that the demand for products related to the cold and flu season like medicines and vitamins would rise all year round? The unprecedented effects of COVID-19 have restricted retailers’ ability to predict which products will become a hit and which ones will fall flat.

Phil said, “The way it usually works is you will build promotions and collaterals 2-3 months ahead. But because of our uncertain conditions, I don’t even know one retailer who can guarantee what kind of products will be on their store shelves 2-3 months from now.”

How can retailers thrive in the new normal, then?

Phil shared some powerful insights to guide supermarkets and retailers in overcoming the current challenges of the industry, especially around assortment planning.

First, he advised retailers to thoroughly know and understand their customer base. Phil also put importance on zip code assortment specific recommendations.

“They have to know the kinds of food their customers want. They have to know about the demographics and health conditions. If your store is located in Florida with older Americans and higher cases of diabetes, you need to stock differently from a New York store with a younger population.”

He further emphasized the need for assortment planning at the individual store level.

"Gone are the days of the same assortment in all stores. That hasn’t happened for a long time - and frankly, it shouldn’t happen. When I go into the supermarket, I want to feel that the store knows me and has the right products for me. I don’t want to have to go to 3 or 5 stores to shop around, especially at this time of COVID.”

Phil also mentioned how retailers today are becoming less reliant on CPGs for category planning. Instead, they have been utilizing science and technology to make smarter decisions. For him, this is something that must be maintained.

“Typically, the category manager is not an employee of the retailer, but the manufacturer. This person is usually from the biggest brand in that particular category. Obviously, you can see some conflicts with that.

But that’s changing a bit. More and more retailers are now hiring their own category managers and using software like HIVERY to evaluate properly what products are put on, what shelves and where. We are seeing science becoming more involved, so it’s not about gut feeling anymore.”

What are the expected changes in the supermarket and other retail spaces post-COVID?

As our interview with Phil comes to an end, he discussed some of his predictions on the possible changes that might arise in the field of retail after the pandemic.

There will be more evident consolidation – Earlier this year, supermarkets bought smaller retailers to take advantage of consumers’ hoarding. Recently, however, we are seeing volumes go down - leading to the majority of these stores closing.


Aging truck driver force will affect the supply chain – There are not enough trucks to get supplies. Autonomous vehicles, indoor farming and local production are the most viable solutions.


Increased prices of imported products from Europe – This is because the US has not been exporting and importing a lot of products from European countries like before.

Phil concluded the discussion by challenging retailers. He asked them to identify and better understand what shoppers would want tomorrow. 

“How can we get into the head, heart and soul of shoppers? How can we be predictive? How can we get a much better success rate when we bring new products?”

If you like this blog, listern to the podcast with Phil Lempert's podcast on this topic

HIVERY is the pioneer of hyper-local retailing – combining artificial intelligence, optimization and design to help CPGs and retailers generate an increased return on physical retail space investment. 

 HIVERY Curate, is the world’s first truly hyper-local category management solution, offering the simultaneous optimization of assortment and space at store-specific level. More information about HIVERY Curate and other HIVERY solutions.

The Supermarket Guru - Phil Lempert: Four (4) shifts in supermarket space that is going to change retailing

The Supermarket Guru - Four (4) shifts in supermarket space that is going to change retail forever

In this podcast episode you can learn about:

• Emerging trends in the supermarkets: in light COVID-19, what will stay and what will change? How would masks, curbside pickup, online shopping, and home delivery change the supermarket experience? What should retailers and supermarkets focus on to generate the revenue needed to continue to operate? Will large assortment offerings still be around?

• Pre-COVID-19 the average American went 2.2 times a week to buy groceries and spent around 22 mins on every shopping trip. Now the average American goes once a week, in and out as quickly as possible. Given the average American consumer spends $5,400 per year* on unanticipated and impulse purchases, what does the new consumer shopping behavior mean to retailers?

• What technology are retailers and supermarkets investing in today? How will "space" in the post-COVID-19 world begin to be leveraged? Will we see more ghost supermarkets: stores transfer existing spaces only to fulfill online orders?

• How hard is it for CPGs to get their products on supermarket shelves as space and range are being re-examined completely? With the category "resets" happening just twice a year, the future of product availability and variety is at risk. Phil believes while the online assortment range can cater for over 40 thousand products, physical stores will see a reduction to 20 or even 15 thousand products! This means that optimizing space and assortment at a store-specific level is going to be even more critical.

• How can retailers thrive in the new normal? Phil shares powerful insights into what retailers and supermarkets should do to prepare, especially around assortment planning. Spoiler alert! Zip Code assortment specific recommendations. "Gone are the days of the same assortment in all stores."

• Is the category advisory under threat? Will it still be around? Phil believes retailers are no longer relying on CPGs for category planning. Instead, they are turning to science and technology as it becomes smarter and more accessible.

• Finally, Phil covers his predictions on what changes to expect in the supermarket and other retail spaces: from aging truck driver force to product and store consolidation to indoor farming...  

For more than 25 years, Lempert, an expert analyst on consumer behavior, marketing trends, new products, and the changing retail landscape, has identified and explained impending trends to consumers and some of the most prestigious companies worldwide. Known as The Supermarket Guru®, Lempert is a distinguished author and speaker who alerts customers and business leaders to emerging consumer and corporate trends and empowers them to make educated purchasing and marketing decisions. As one of America’s leading consumer trend-watchers and analysts, Phil Lempert is recognized on television, radio, and in print.

Meet Phil Lempert, The Supermarket Guru®:

Meet Phil Lempert,  The Supermarket Guru® 

For more than 25 years, Lempert, an expert analyst on consumer behavior, marketing trends, new products, and the changing retail landscape, has identified and explained impending trends to consumers and some of the most prestigious companies worldwide. Known as The Supermarket Guru®, Lempert is a distinguished author and speaker who alerts customers and business leaders to emerging consumer and corporate trends and empowers them to make educated purchasing and marketing decisions. As one of America’s leading consumer trend-watchers and analysts, Phil Lempert is recognized on television, radio, and in print.

In this podcast, you will learn about:
• Emerging trends in the supermarkets: in light COVID-19, what will stay and what will change? How would masks, curbside pickup, online shopping, and home delivery change the supermarket experience? What should retailers and supermarkets focus on to generate the revenue needed to continue to operate? Will large assortment offerings still be around?

• Pre-COVID-19 the average American went 2.2 times a week to buy groceries and spent around 22 mins on every shopping trip. Now the average American goes once a week, in and out as quickly as possible. Given the average American consumer spends $5,400 per year* on unanticipated and impulse purchases, what does the new consumer shopping behavior mean to retailers?

• What technology are retailers and supermarkets investing in today? How will "space" in the post-COVID-19 world begin to be leveraged? Will we see more ghost supermarkets: stores transfer existing spaces only to fulfill online orders?

• How hard is it for CPGs to get their products on supermarket shelves as space and range are being re-examined completely? With the category "resets" happening just twice a year, the future of product availability and variety is at risk. Phil believes while the online assortment range can cater for over 40 thousand products, physical stores will see a reduction to 20 or even 15 thousand products! This means that optimizing space and assortment at a store-specific level is going to be even more critical.

• How can retailers thrive in the new normal? Phil shares powerful insights into what retailers and supermarkets should do to prepare, especially around assortment planning. Spoiler alert! Zip Code assortment specific recommendations. "Gone are the days of the same assortment in all stores."

• Is the category advisory under threat? Will it still be around? Phil believes retailers are no longer relying on CPGs for category planning. Instead, they are turning to science and technology as it becomes smarter and more accessible.

• Finally, Phil covers his predictions on what changes to expect in the supermarket and other retail spaces: from aging truck driver force to product and store consolidation to indoor farming...  

Resources:
* https://www.cnbc.com/2018/02/23/consumers-cough-up-5400-a-year-on-impulse-purchases.html

Connect with Phil Lempert:
https://www.supermarketguru.com
Farm, Food, Facts podcast: http://farmfoodfacts.buzzsprout.com
Lost in the Supermarket podcast: https://podcasts.apple.com/ca/podcast/lost-in-the-supermarket/id1043272062?mt=2
Facebook Live: https://www.facebook.com/watch/WinsightGroceryBusiness/2655684358020751

Phil Lempert, The Supermarket Guru®, on the impending supermarket trends and post-COVID-19 world by Retail Mavericks

Phil Lempert, The Supermarket Guru®, on the impending supermarket trends and post-COVID-19 world

We often hear that the future of Consumer Packaged Goods (CPG) and retail sectors begins with Artificial Intelligence (AI), and that technology is disrupting the industry today.  But how exactly can AI shift category management? How can it improve different stores with different requirements? To help you learn about how AI is optimizing your shelf space utilization, here is everything you need to know about it.

AI, or Artificial Intelligence, is augmenting “domain expertise” in every industry. 

This isn’t a surprise anymore considering that we’re getting glimpses of AI around us – from digital payment advisers in banking and chatbots in customer service, to highly accurate forecasting in the logistics of different companies.

However, what makes AI relevant to various fields and industries is not just the increased efficiencies it provides, but more of its capacity to open up next-level solutions to different challenges. 

In fact, some of AI’s advantages include:

Growing data sets – 90% of the data we have in this world has been created in the last two years. There’s too much data, variables and noise far beyond what humans can process. Through AI, we can utilize these growing data sets to get more helpful insights efficiently.


Unlimited capacity – Humans have 86 billion neurons, while machines have unlimited capacity. This makes AI more adept at detecting complex patterns.


Speed and agility – AI is capable of generating actionable insights in minutes, rather than months. Because of this, it’s more reliable when testing various hypotheses.


New, creative thought – While humans like us have biases that hinder us from identifying creative thought, AI is good at learning from previous actions and developing its own insight or creative strategies.  

Check out this video from an ex-Autodesk executive on how AI has improved their ability to think and imagine. This example in industrial design however this is happening in category management today.  Planograms creation software or category management software is being reset.

Breakthroughs in technology have paved the way for AI in retail.

Advanced machine learning methods like “Deep Learning” algorithms allow category managers to uncover large amounts of data and simulate various assortment scenarios that can help determine the right shelf space utilization, enhance customers’ experience and maximize profitability. 

For instance, if we instruct AI to maximize revenue, it will then analyze all granular data points out there – from macro-space level to individual store levels. Once category managers proceed to introduce constraints and rules such as limitations in prices, seasonal shopping behavior and location factors, AI will also consider these in optimizing revenue.

What’s powerful about AI in category management is that it focuses on enhancing the human element, not eliminating it. The approach works by combining human insight and strategy to AI’s unrivaled and unlimited capacity in order to identify the best space allocation and product assortment for any retail business.

An example of AI in category management is HIVERY Curate.

HIVERY Curate is a category management tool which utilizes AI techniques and operations research to achieve space and assortment optimization for CPG companies and retailers.

It generates compliant planograms for different convenience retail outlets, while taking into account the merchandising rules and constraints at a national, channel or store level. HIVERY Curate runs multiple assortment scenarios in a span of a few minutes to help category managers like you see the impact of each possible decision in real-time.

Despite being a smart AI-driven category management application, HIVERY Curate is intuitive and user-friendly, to ensure users will get the most benefit with minimal training.  

So, what does this imply for category management in general?

It means that there will be an 80% reduction in Planogram drawing time. Category managers can also spend less time on data collection, analysis and planning, which then allows you to pay more attention to things you’d prefer to do, like critical thinking, strategizing and implementing.

With AI tools such as HIVERY Curate, category managers can become more like category consultants - delivering more accurate recommendations that are beneficial in driving business growth.

Case study: how AI is impacting Category Management

Contrary to what most people expect, AI enables more than just labor savings. It provides operational, financial and strategic value for both suppliers and their retailers.

In fact, one of our partners achieved the following benefits through the AI-driven HIVERY Curate:

$50M incremental annual sales from its one retailer, and $150M sales over 3 years

Points Of Distributions (POD) becoming #1 in the category

Awarded as “Sales Driver of the Year”

Back in 2016, some of this customer’s retailers had cut category PODs by 22% and promotional support by 50%. Fortunately, through AI technology, they were still able to curate the perfect assortment in each store and consistently grow their PODs, including their category. This was made possible even though the rest of the market in that category had declined.

It’s also important to take note that our customer had been able to achieve the same positive results in 2017 and 2018 - the times when PODs and promotions fell flat compared to 2016 numbers.

All of these points prove that AI plays (and will continue to play) a big part in growing retail and CPG businesses

HIVERY is the pioneer of hyper-local retailing, combining artificial intelligence, optimization and design to help CPGs and retailers generate an increased return on physical retail space investment. 

Our product, HIVERY Curate, is the world’s first truly hyper-local category management solution, offering the simultaneous optimization of assortment and space for each unique store. It’s powerful and continuously learning AI-driven engine optimizes generates rapid category strategies, insights and actions to take around product assortments, space and planograms generation.

More information about HIVERY Curate and other HIVERY solutions

What capabilities are needed to meet what’s coming next in Category Management?

Future of Category Management: New capabilities needed to remain competitive, relevant and indispensable

Retailers nowadays are facing challenges in the form of trend shifts, behavioural changes and technological advancements.

This is why a commitment to continuous renewal and transformation is a must to remain competitive in the market. Therefore, it’s also important for retailers to ramp up their processes, teams and relationships.

To help you understand the true implications of our industry’s current trends, here are some insights around how retailers are responding.

How do retailers respond to the waves of change?

For retailers to hit their target and remain relevant to consumers, they must proactively adapt to the changes and innovations in the industry.

The following approaches are some of the strategies they implement to keep their business up and running amidst the evolving retail landscape.

Discount stores like Aldi are invading the US market, increasing retail competition. Traditional grocers like Walmart have been able to observe that there is almost a 10% difference between their gross and net operating margins to those comparable discount grocers – leaving them under pressure to compete.

In addition to this, retailers have to consider the impact of Amazon and their kind of infinite assortment offering that customers nowadays are beginning to expect.

And while physical retailers continue to invest in in-store experiences, better product mix which may provide lower returns in the short run, the hope that they remain relevant to customers in the long run.  In fact,  Kroger into expanded into restaurant business  with Kitchen 1883 and private-label clothing line.

Nevertheless, labor is a major factor they can continuously utilize in the short term to alleviate margin pressure. For example, Walmart is starting to renovate their stores by eliminating the need for humans to operate cash registers on the front-end,  instead automating their check-out process as well as streamline operations with robots.  According to Forbes story, Walmart will bring on board thousands of robots in nearly 5,000 of its 11,348  stores.    However the “New Retail” capabilities consumers require of retailers (e.g. Buy Online, Pick-Up in Store (BOPIS), curbside pickup, etc.) are all putting additional a strain on  in-store operating models.

It can’t be denied that labor is impacting the utilization of retailers’ spaces. 

Retailers nowadays are facing challenges in the form of trend shifts, behavioural changes and technological advancements. This is why a commitment to continuous renewal and transformation is a must to remain competitive in the market but these technological advancements also impact category management roles both in retailer and CPGs side.

Allow me to schedule a time with you