Save-On-Foods improves promotional lift without additional price discounting.
Save-On-Foods Ltd., based in Langley, British Columbia is a chain of 169 supermarkets located across Western Canada. Since its launch in 1915, Save-On-Foods has established a reputation for going the extra mile for customers and being a strong supporter in the communities where it operates.
Amid an intense competitive landscape, Save-On-Foods was looking for an edge.
It needed to change how it operated and it was looking to outflank traditional grocery retail competitors, as well as the emergence of e-commerce players.
It wanted new and innovative ways to do price optimization and promotional product selection and, as important, drive better financial results. “It’s about surviving. You need every penny you can make,” said Terry Piwek, General Manager, Drug Store with Save-On-Foods.
Promotional Product Selection
The reason that we picked Daisy was straightforward. To gain the extra 1% margin is difficult from a human perspective. You need A.I. to make it happen.
TERRY PIWEK | GENERAL MANAGER, DRUG STORE
In 2017, Save-On-Foods partnered with Daisy to deliver promotional product selection, price optimization, and demand forecasting technology that leveraged the power of artificial intelligence.
“The reason that we picked Daisy was straightforward,” Piwek said. “To gain the extra 1% margin is difficult from a human perspective. You need A.I. to make it happen.”
With a commitment to embrace innovative technology, Piwek said Save-On-Foods, which operates 169 stores in Western Canada, was confident from the beginning that Daisy could help it deliver better financial results.
The biggest challenge, he said, was change management and convincing its people to trust Daisy’s recommendations and align the technology with Save-On-Foods’ merchandise planning systems.
Once the decision was made to implement Daisy, Save-On-Foods explored the different ways that it could use the technology, which leverage the power of A.I. and reinforcement learning to generate data-driven recommendations.
For Save-On-Foods, the operational priorities focused on the following:
- Generate recommendations about promotional pricing so the company could attract consumers and effectively manage margins.
- Improve the promotional lift without additional price discounting.
- See an overall lift in sales.
- Launch more effective promotions.
- Accurately forecasting sales metrics and demand for each weekly flyer.
- Make more strategic decisions to create long-term plans for the business.
As Save-On-Foods integrates Daisy into its systems, it is already seeing strong ROI.
“The financial improvement is very positive across the entire organization,” Piwek said. “Daisy lets us look at the business from a holistic perspective versus category sales. The team can look ahead from a strategic perspective.”
So far, Save-On-Foods has seen an impressive 3% lift in year-over-year sales at the 130 stores using Daisy.
Piwek said one of the biggest insights was that in two-thirds of the cases, Daisy recommended higher prices than Save-On-Foods would have charged but got a 22% sales lift and 8% increase in unit movement.
“The big lesson is we didn’t have to go as low price-wise as in the past and we can still drive the business,” he said. “Promotional elasticity has a bigger impact than price,” he said.
As important, Save-On-Foods saw a 17% increase in halo sales, which means higher sales of non-promotional products at higher margins as a result of consumers buying promotional products.
Amid Save-On-Foods’ success with Daisy’s pricing and product optimization modules, it is now piloting Daisy’s demand forecasting solution with some very positive early results.
INCREASE HALO SALES
Higher sales of non-promotional products at higher margins.
INCREASE YOY SALES
Lift in year-over-year sales at the 130 stores using Daisy.
DAISY IS THE FIRST COMPANY TO USE THE POWER OF A.I. TO SOLVE RETAIL PROMOTION CHALLENGES.
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