HIVERY Case Studies

Latest case studies from Hivery
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Client Insights: How To Optimize Trade Promotion Calendar using AI models

Jul 13, 2020 | By

HIVERY

Client Insights: How To Optimize The AI Trade Promotion Calendar  Managing promotional deal processes is a necessary part of business for CPG (Consumer Packaged Goods) companies.  However, it’s also exhausting, costly and time-consuming - even for organizations as large as Coca-Cola Amatil Limited (CCA).  Melinda Wienand, previously CCA’s Head of Revenue Growth, sat with HIVERY to record a fascinating podcast episode where we explored our partnership in developing the world’s first AI trade promotional calendar and how she helped pioneer a better approach which ultimately led to the creation of HIVERY Promote. HIVERY Promote uses AI to generate optimized trade promotion calendars to automate trade promotions and facilitate dynamic continuous learning that is helpful in forecasting accuracy demands, addressing constraints and attaining overall business goals. Melinda shared CCA’s journey with HIVERY and how her personal experience has been revolutionary for their organization. A more advanced AI approach to promotional deal processes Looking back on her 3 years of research and development experience with Coca-Cola Amatil Limited (CCA), Melinda Wienand, previously CCA’s Head of Revenue Growth and currently Head of Revenue Management at Simplot Australia, recalled how the company had to decide to move past the conventional methods and technologies of offering promotional deals if they wanted to remain competitive. “We were originally running multiple scenarios that were brainstormed by a group of very smart people in Finance, Sales and Revenue Management. However, we were still facing constraints. She further explained, “There was the need to come up with as many scenarios as possible, but we also had to do it in a rapid way. If not, our price elasticity models tended to become obsolete by the time we were done with the results.” She realized that such an iterative procedure of imprecise guesswork to try to find the ideal promotional deals were costing them substantial time and effort. So, Melinda and her team aimed to master two important things:  Keep price elasticities model learning with live data, and Run many more scenarios in a time-efficient way. This was impossible with the original method. So, to do this, HIVERY and CCA worked together to develop HIVERY Promote – which offered an AI-driven trade promotion optimization solution. HIVERY Promote takes only a few minutes to generate promotional calendars which are more effective, implementable and competent in meeting demands of multiple stakeholders for CPG companies. Revolutionizing the way product promotions are done By reiterating the vital aspects of designing these promotional calendars, Melinda discussed the essence of HIVERY Promote and why its development was so important in revolutionizing the way product promotions are done today. “With the old school way of doing things, there were a great deal of financial calculations needed to understand the financial impact of promotional calendars. But people are not aware that the execution elements of promotions are far more important than just price discounts.” She added, “Things like catalogue planning, in-store display preparations and communications delivery often go unnoticed because there’s a lack of accurate data. To implement favorable outcomes for shoppers, retailers and brand, HIVERY Promote takes careful consideration of all of these factors in optimizing promotional management.” The outcome of this new approach: AI trade promotion optimization Melinda is proud that CCA’s promotional activities have improved due to their advanced new method of revenue management. She explained why HIVERY Promote stands out from the other solutions in the market: “HIVERY Promote is unique because it offers you a price elasticity model that is dynamic. It also provides a prescriptive promotional calendar that optimizes Key Performance Indicators. Most importantly, HIVERY Promote has an interface that allows you to visualize the impact of a promotional calendar – helping you easily make smarter decisions that bring success to the business,” said Melinda. The future of promotional planning  Seeing how CCA came a long way together with HIVERY Promote, Melinda wants to tell other businesses that using an AI trade promotion tool to improve their retail operations is worth it. “We are continuously witnessing how unmatched and powerful HIVERY Promote is. It is the perfect balance between intuitive and easy to use. However, what makes it most powerful is its ability to refresh with new data and a new scenario in a very quick manner.” Melinda admitted she felt honored to be in the same room when the AI trade promotion calendar from HIVERY Promote was created. Today, she anticipates how CPG companies and retailers will progress even more because of it. “HIVERY Promote is the future of promotional planning in the food industry. To make sure your business won’t get left behind, you must learn how to adopt and adapt,” she said. Want to learn more about HIVERY Promote? Listen to Melinda’s podcast episode on HIVERY’s Scientific Maverick Podcast station and learn about her journey in discovering a new way to maximize promotional management activities.  For more information about HIVERY Promote, click here.
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case-studies
4 ways AI is disrupting CPGs/FMCGs (in a good way)
Feb 08, 2018 | By

Franki Chamaki

Stocking products, having promotions, and choosing the right product combinations is changing and getting FMCGs a new competitive advantage. — The number of variables that play into correctly stocking a vending machine or convenience store may come as a shock to someone outside of the industry, but those who work with FMCGs (fast-moving consumer goods such as Unilever, Procter & Gamble’s, Coca-Cola, Mars) know that stocking their products in a way that maximises revenue is no easy task. FMCGs are found pretty much everywhere – universities, office buildings, stadiums, malls, metros – and offer a wide array of different products, so the options are endless when it comes to picking out the right combination of goods to sell at the right price, in the right location. Even if you manage to find the “perfect” pairing of products, you are still caught up in the practical challenges of correctly stocking items at the right place, successfully managing different categories of products, and making sure you offer promotions at the most profitable times. The human brain is great at reading emotion, persuasion, and analysis, but it isn’t so great at dealing with infinite options, so the process of setting up and managing your FMCG products can perplex even the most experienced industry leaders. This is why the fact that new technologies are making their way into the FMCG industries – particularly with the use of FMCG artificial intelligence (AI) and FMCG advanced mathematics – is so exciting. AI and advanced mathematics are allowing FMCG/S distributors to control their product selection and stock processes like never before. Here are four of the major ways this is happening. #1. AI can go beyond standard market segmentation (e.g., locations, seasonality, demographics, etc.) developed by “human constructs” Personalisation is making its way into mainstream marketing, and customers are getting used to having their personal needs and wants catered to by the companies they love. One might think that a general industry such as FMCGs would exclude itself from this personalisation strategy: how can you possibly personalise something as public and generic as groceries shelf or vending machine? Think again. With the emergence of AI, this is no longer the case. Here at HIVERY, we say we provide these physical retails spaces their individual fingerprint planogram. Training AI algorithms with range of FMCGs/retailer relationship constraints and rules can be complex but once done right, companies with vast amount of data and variables are able to stock FMCGs products in vending machine or shelves beyond the “human constructs” of location temperature, target customer socioeconomic status distribution etc. This kind of fingerprint recommendation can lead to big profits quickly. It essentially takes the human guesswork and biases out of stocking at individual store/vending machine level. When it comes to choosing the right products for a specific location, the choice goes beyond what your target demographic is buying – you also need to consider what products go well together. Product pairings should be placed in the same store, and even beside each other for added effect. For example, if putting Coca-Cola next to a Snickers bar leads to customers buying both products instead of just one, it is in your best interest to consider this in your arrangement and product choice. Some say this might be store-level product replenishment and stock optimisation wizardry, but in fact, it’s scientific optimisation based on machine learning instead of a rule-based system. Artificial intelligence in FMCG companies can allow you to consider these hundreds of thousands of potential product combinations, ranking the most popular ones to give you a perfectly balanced product selection. It can also create AI planograms that can help FMCGs advise retailers determine exactly where each product should be placed, how much stock to have on that product, and what the price is in order to maximise profit. Some say this might be store-level product replenishment and stock optimisation wizardry, but in fact, it’s scientific optimisation based on machine learning instead of a rule-based system. #2. AI can see data patterns unlike humans and learns from its mistakes When it comes to managing and storing any large datasets, we have come to a point where it is becoming next to impossible to achieve any sort of strategic analysis without the help of AI. There is just too much data out there, and not enough brain power. Conventional methods just don’t work. What makes this process even more interesting is that with AI or machine learning, the system learns from its mistakes and gets better. This means that it not only learns over time – its recommendations or “predictions” are more accurate than those of a human. The benefit to incorporating AI into your product selection and stocking strategy is that the software will store, analyze, and learn from past actions and continue to track and store all future decisions. This means your data will become a goldmine for the AI to find new patterns, discover new opportunities, target mistakes or errors, and improve the overall efficiency of your process over time. AI has the unique ability of being able to learn faster than any human brain, and this is exactly what you need if you want to keep your sales above your competition’s. #3. AI can streamline your whole operations efficiently Once you have a product selection that caters to your demographic and an AI planogram of your store, machine, or fridge that will maximise sales, AI continues to work to your advantage by enabling you to execute the entire process of stocking and replacing products faster. Restocking a vending machine or store chain requires coordination, strategic planning, and cooperation between team members to ensure that the correct products are available and distributed at each specific location. AI technology can streamline this process by offering AI category management solutions that make the most sense for each location, helping to keep things organised and efficient. What does this mean? Not only do you you get the right products in right stores with the right price and promotion, but you also get lower supply chain distribution and logistics costs of getting those products in these stores using route optimisation. Furthermore, with AI, you can go one level down and optimise the route for per driver or business rules. That way, the system learns both product assortment and route optimisation at a store-driver level. The management of different product categories tends to get difficult for the human brain to process as stores and machines get more and more personalised to the specific customer – if each location has different products and places them in different spots, how can they all be categorised in the same way? This is where AI can help cut through the noise and create personalised category options that cater to each location. #4. AI in FMCG keeps you – and your calendar – objective One of the biggest benefits to implementing AI technology into your business, no matter the industry, is the objectivity that AI systems grant you. As humans, we are simply unable to be completely objective when we consider a situation, decision, or challenge. Even if we make it a priority to be as objective as possible, we cannot guarantee that the colleagues providing us with information are being equally as committed to objectivity. This is why CEOs are turning to AI to provide them with objective advice and guidance, and why using AI when making decisions about product choices, planograms, category management, and promotional calendars is a step forward. Promotional effectiveness calendar optimisation allows you to rely on artificial intelligence to decide on a time to offer a product promotion. This means you are guaranteed to make the most optimised decision for your business instead of basing it on how you are feeling about a particular product or opportunity at that time. The ability to create a promotional calendar free of emotion and judgement will allow you to create a customer experience that will keep people incentivised to buy all year round. How we can help Hivery clients that have implemented our AI vending analytics and FMCGs advanced mathematics have seen a 15% increase in sales revenue and a 18% reduction in restock costs. Now that the technology exists, it has begun to disrupt the FMCG market – and there is no turning back. Getting on board with artificial intelligence and maximising the efficiency of your vending machines or retail distribution strategy through fingerprint level while product pairings that were not previously possible will put you ahead of the competition and be a real game changer in your business. — Further Interesting Reading Smart Vending: Coke Readying AI-Powered Drink Machines Use AI to become a better CEO Coca-Cola Is Bringing Artificial Intelligence to Vending Machines Vending machines are getting smarter with machine learning and facial recognition The Amazing Ways Coca Cola Uses Artificial Intelligence And Big Data To Drive Success
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