To compete against larger supermarket chains in its market, Ukrop’s Super Markets Inc. serves up servings of fresh pasta and delicacies made in its own bakeries. But with only a three-day window to sell these perishables, it’s using a web-based demand forecast system to prevent costly overstocks. Surprisingly, the system has also boosted sales in one category by 14%, Roger Williams, director of demand chain management and loss prevention, tells Internet Retailer.
Ukrop’s is still testing and rolling out the e-demand forecasting application from DCM Solutions Inc., and expects to eventually use it in all 28 stores. In the meantime, the system is producing unexpected results, Williams says. "It was surprising how much sales went up due to improvement of out-of-stocks and overstocks,” he says.
Ukrop’s integrates daily POS data over its corporate intranet with the web-based e-demand application, which uses algorithms to generate recommended order information to meet forecasted demand. Now store department managers, instead of re-ordering items in the same amounts without much regard to how they sold in the past, access the e-demand recommendations on portable Tablet computer devices as they prepare their orders.
Ukrop’s operates its fresh-foods business under a system that offers any remaining items for 50% off on the morning of the fourth day, then delivers any unsold items that afternoon to a local food bank.
But by using e-demand to order the right amount and mix of products based on variables such as past sales and seasonal trends, Ukrop’s was able to increase the number of best-selling items and reduce the number of poor-selling items. That resulted in a 50% reduction in the number of 4th-day products sold at half-off and a 32% drop in the number of products sent to the food bank.
And because the retailer’s buyers became less concerned about having overstocks, they procured more products among the best sellers, leading to the 14% increase in sales. “The biggest thing we’ve learned is that we can sell more of our best-selling items,” Williams says.
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