Wal-Mart Brings You Fresher Groceries through Eden

In Wal-Mart's blog:

Eden: The Tech That’s Bringing Fresher Groceries to You   By Parvez Musani   Vice President – Supply Chain Technology, Walmart

What’s for dinner tonight?

No matter the answer, there are some givens: It has to taste good, be good for you, and be affordable. But when you’re shopping with limited time, how can you be sure you’re buying the freshest apples, milk that will last, or perfectly ripe bananas?

We think our new intelligent food system called Eden can help. Developed in just six months by our own associates, it is improving the quality and flow of fresh groceries from farm to shelf.

Eden is the result of a friendly competition, or hackathon, among the engineers on our fresh merchandising teams. Our goal was to figure out the best way to keep track of food freshness all the way from the farms to our stores. The winning team determined that building a digital library of food standards was the answer. So they gathered the many chapters of food product specifications set by the USDA, layered on Walmart’s own rigorous product standards, and combined all of this information with more than a million photos to create a freshness algorithm that prioritizes the flow of perishable goods worldwide.  ... " 


Robert Hetu of Gartner also discusses this here:
Walmart’s Freshness Algorithm; A Great Example of Algorithmic Retailing   by Robert Hetu   

Product and Experience are King

Interesting positioning.   Of course depends on the category of product that we are talking about, and what kind of experience exists today in their Moments of Truth  (MOT) ...  (Market, Choose, Use) for given demographics of demand.  I like the points being made.   Continuing to think in terms of this.

Product is No Longer King  by Robert Hetu   in the Gartner Blog

The old saying “product is king” is no longer true for retail. Experience is king, and product is a critical component of experience, but consumers increasingly determine the value provided by the associated experience. This is seen by the transition toward click and collect, home delivery, auto-replenishment, in-store entertainment and the growing use of subscription services.
Gillette has lost U.S. market share for six straight years. Its share of the men’s-razors business fell to 54% in 2016, down from 59% in 2015 and more than 70% in 2010 (http://www.foxbusiness.com/markets/2017/04/04/gillette-bleeding-market-share-cuts-prices-razors.html).  This was driven by low cost subscription services Dollar Shave Club, Harry’s Razors, and others.

Cost plays an important role in this shift, and quality remains a key element, but experience is a major driver and was a well known problem in the industry.  I recall having a discussion back in the 1990’s with someone from one of the major blade manufacturers.  At that time it was explained to me that men used the first 3 razors from a 4-pack in rather short order.  They however tended to use the 4th razor longer than the combined usage time from the first three.  The problem they faced was how to get men to use the 4th razor for a similar time span and then to purchase the next 4-pack, representing a huge sales opportunity.  They never solved the problem. .... " 

Gartner: Retail Assortment Planning Analytics

In the Gartner Blog.   Insightful piece.  An area we worked on for years.  If anything this article over complicates the problem, but it is good to see a more modern approach, with new approaches and data sources.   Following up.  Robert, send me more on this view and I will comment.

Advanced analytics are critical for modern and effective retail assortment planning  by Robert Hetu  

Having just completed publication of the 2017 Critical Capabilities For Retail Assortment Management Applications it’s a great time to reinforce the importance of using new advanced analytic capabilities. Advanced analytics and big data from sources like the Internet of Things (IoT) are enablers of customer-centric assortments as well as effective category planning and management. This year’s research placed special emphasis on provision of advanced analytics as key differentiation for assortment planning and category management solutions. Gartner describes this as “Algorithmic Retailing”.

Algorithmic Retailing

Retailers must transition from Excel-based planning to these more advanced solutions to improve speed and accuracy of planning.  Any advanced solution under consideration should utilize the majority of these capabilities or should be dropped from consideration.   ... ." 

Retail Algorithmic Merchandising

 In the Gartner blog:  On algorithmic merchandising.  Good thoughts in the importance of data, process and analysis used with more concise and repeatable algorithmic methods.

" ... By 2020, merchant leaders will be algorithms, prompting the top 10 retailers to cut up to one-third of headquarters merchandising staff. 

Predicts 2016: Digital Business Uproots Traditional Retail Revenue Generation

Analysis by Robert Hetu

Key Findings:

An explosion of digital business opportunities will cause retailers to increasingly rely on algorithms to manage complex business opportunities that will exist for as little as a single moment ... 
Smart machines using algorithms will make complex decisions, such as merchandise assortment and distribution, product pricing and marketing messages.

The algorithmic economy is coming alive for multichannel retailers as they continue to seek better ways to drive decisions through advanced analytics. Some algorithms will be ubiquitous, and shared for the betterment of the industry. Others will be more directly aligned with the interests of the retailer, “the secret sauce,” and, as such, kept confidential. As the number of algorithms grows, and the quality variations expand, retailers will find that the management of algorithms will require an expert to oversee how they are cared for (which ones can be shared), and which ones provide even momentary competitive advantage. ... " 

Terrifying Retail Words

In Gartner Blogs, by Robert Hetu,

" ... What are the most terrifying words in retail? “There is nothing here to buy”.  The speaker of these words was none other than my spouse last night in our local Walmart.  So I was glad to hear comments from Walmart CEO Doug McMillon, that I characterize as getting back to the basics.  In particular adding items to the assortment that are new and exciting, as well as better blending of art and science.

McMillon described the balance between art and science that makes a merchant successful and noted that as the company grew ever larger over the years the science side of the merchandising equation had come to dominate decision-making. “You can manage a category to death,” McMillon said. “We need to be creative and do something people don’t expect by getting after items that will surprise and delight shoppers.” (www.retailingtoday.com) ... "