Dive Brief:
- California-based grocery chain Save Mart has extended its existing arrangement with machine-learning specialist Revionics to provide insight into how price changes are likely to affect consumer demand, according to a press release.
- Save Mart uses Revionics’ software to guide pricing decisions at more than 200 supermarkets it operates under banners including Save Mart, Lucky, Lucky California and FoodMaxx. The company originally signed on with Revionics in 2014.
- The price-optimization system provided by Revionics allows retailers to predict how changes in what they charge for goods will affect profits and guide them in making localized pricing decisions.
Dive Insight:
Food retailers have been turning to artificial intelligence-based systems to help sharpen their ability to make money in an industry where slim profit margins are the norm. The predictive analytics these tools provide can help grocers make decisions that can boost sales and reduce the quantity of goods they have to discard.
As of 2019, 40% of retailers and brands were using what is sometimes called intelligent automation to improve efficiency and profitability by forecasting demand, gaining clearer insight into supply chains and boosting customer engagement, according to data from a global survey published by the National Retail Federation. That figure could double by 2021, the organization said.
Grocer interest in using artificial intelligence to help them beef up profits and prevent shrink is exciting investors. For example, startup Shelf Engine, which sifts through sales data and other information to help grocers determine what customers are likely to purchase, recently brought in $12 million in Series A funding from a group of venture capitalists. Shelf Engine’s customers include Kroger and Target.
Meanwhile, Afresh, developer of an AI-powered system that helps grocers optimize their fresh food offerings, said in July that it had raised $12 million in Series A follow-on funding. The company announced Aug. 18 that it had struck a deal with Heinen’s to help the Midwestern grocer cut waste and improve profits.
In addition to Save Mart, Revionics counts grocers like Woodman’s Markets, Market Basket and Rouses Markets among its customers. The tech firm is set to be acquired by Aptos, another company that provides retailers with analytics capabilities, in a transaction set to close next month.
