Driving Efficiency and Sales Growth
How Akuret Helped a Grocery Chain Improve Inventory Management
Daniel Steeneck, PhD
Executive Summary
This White Paper outlines how Akuret's proprietary algorithms, implemented in a Software as a Service (SaaS) application with generative AI, resulted in significant reductions in labor costs, increased sales, and a positive return on investment (ROI) within a short timeframe of six months. This case study focuses on one of Sweden's largest grocery retailers with over 1,000 stores that faced lost sales and low productivity among store associates due to inefficient inventory management processes, inability to timely identify out-of-stocks, and other shrinkage-related issues.
Introduction
In today’s fast-paced retail environment, operational efficiency and inventory management are critical for maintaining customer satisfaction and maximizing profits. A leading grocery chain in Sweden faced significant challenges in managing inventory, particularly struggling with product availability, stock discrepancies, and multiple data sources. Akuret provided a data-driven solution that transformed their processes, leading to improved revenue and enhanced productivity among staff
The Challenge: Inefficient Inventory Management
The grocery retailer experienced inefficiencies as store associates dedicated weekly hours to manually inspecting shelves for stock levels. Although their POS system indicated inventory levels, the lack of a digital solution to track and resolve stock issues resulted in lost sales opportunities and ineffective labor management. Due to thousands of SKUs, the retailer could not identify hidden data patterns that indicated lost sales opportunities.
The solution
Partnering with Akuret
The grocery chain collaborated with Akuret to implement a comprehensive inventory management system and address data anomalies to tend to these challenges. Key features included:
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Daily Transaction Data: The system seamlessly integrates with the POS system to update daily sales and stock levels, allowing for proactive stock issue identification.
Results
Transformative outcomes
The implementation of Akuret’s system yielded impressive results.
Sales Increase: A direct revenue increase of 0.5% was observed due to improved inventory management.
Time Savings: The alert system saved an average of 4 hours per week per store, enhancing staff productivity.
Improved Accuracy: Inventory tracking accuracy surged to 90%, greatly reducing discrepancies and ensuring product availability.
Proactive Problem Solving: Approximately 350 stock issues were identified per store monthly, allowing for timely resolution before impacting sales.
Key findings
Insights into Inventory Management and Data Anomaly-Driven Actions
The partnership provided valuable insights, including:
Inventory Discrepancies: The implementation exposed gaps between reported and actual stock levels.
Low Service Levels: Stockouts accounted for 0.5-1% of total lost sales, highlighting the importance of accurate inventory processes.
Sales Growth Potential: Enhanced monitoring indicated a potential increase in sales by 0.5-1% per store with continued vigilance.
ROI
ROI: Financial Gains from Akuret’s Solutions
The return on investment from Akuret's implementation was substantial:
Revenue Increase: The stores recovered $5,000 to $10,000 USD in sales per year per store, translating to a revenue increase of 0.5-1%.
Cost Savings: Reducing stock-taking time saved by approximately $10,500 annually, based on previous costs per store.
Initial Investment: With chain-wide implementation costs estimated at $20,000, the financial benefits quickly offset these costs, demonstrating a robust ROI.
Actionable insights
Continuous Improvement
The Akuret system has provided ongoing insights that have refined inventory processes and data analysis, including:
Timely Accuracy: Ensured current inventory data to prevent stockouts.
Optimized Audit Focus: Enhanced focus on high-demand products during inventory audits.
Prioritized Management: Allowed to prioritize high-revenue SKUs, improving stock availability.
Lost Sales Opportunities: Data anomalies identified and converted to real lost sales opportunity notifications.
Conclusion
A Game-Changer for Grocery Retail
The collaboration with Akuret has revolutionized how the grocery chain approaches inventory management and data analysis, increasing tangible sales, labor efficiency, and accuracy. Grocer retailers can significantly improve operational efficiency and profitability by leveraging data-driven processes and generative AI. This leads to an improved shopper and employee experience.
Call to Action
For grocery chains seeking to enhance inventory management processes and increase On-Shelf-Availability, Akuret provides a proven solution that translates into long-term operational success and a strong return on investment.
