October 27, 2017 / by Derayo
Morrisons is next up in our Data Champions series, where we take an in-depth look at companies ‘championing data’. To be considered a data champion companies should be using data in a unique way to help achieve their overall business objectives.
In the first of this 3-part series we looked at how Under Armour is disrupting the sportswear industry, revolutionising the ‘connected fitness’ movement.
In this article we’ll be looking at supermarket chain Morrisons. Founded by William Morrisons in the 1890’s, Morrisons has been a mainstay in the UK supermarket industry for over 100 years. It’s now the UK’s fourth biggest supermarket chain, particularly impressive given that it started as a food market in the streets of Bradford, and where their HQ is to this day.
You may have heard of our AI solution, PurchaseLoop Foot Traffic, which uses AI to drive consumers to stores. This is one way in which retailers are harnessing AI to solve business objectives, however Morrison’s are using theirs to solve another problem – waste. A report should published by Wrap (a UK Government backed charity, set up to reduce food waste) revealed the scale of the issue, with supermarkets wasting on average 235,000 tonnes of food in a year.
Morrisons have teamed up with Blue Yonder, a provider of AI and Machine Learning solutions for companies in the retail sector to improve their customer service and efficiency.
Using data from the last 3 years, Morrisons looked at internal data (peak selling times and best selling products and external data (public holidays and weather forecasts) for each of their 491 stores. This data was then analysed and an algorithm was trained to predict what each individual store needs which product at what time. This is then ordered automatically, in turn freeing up time for Morrisons staff to focus on the customer.
This forward thinking by Morrisons has paid off, in just under 12 months they’ve reduced shelf gaps by 30%. It’s also reduced the amount of days Morrisons are holding stock for, which now stands at 2–3 days. This has had a direct impact on their overall sales figures, with like-for-like sales rising 1.7% in the final quarter of 2016, including their strongest Christmas trading period in seven years.
When supermarkets and other stores introduce Artificial Intelligence systems, there’s often a suggestion that this will lead to job losses. This isn’t the case for Morrisons, as as employees are actually spending more time on the shop floor.
Morrisons CEO David Potts had this to say:
“Our biggest new initiative has been our new automated ordering system. The system is capital light, utilising 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. “
With retailers under a lot of pressure to persuade consumers to come into store, rather than order online, they are looking to improve the in-store experience. This is another example of how big data and the use of artificial intelligence can significantly improve business results.