Retail Optimization Through Technology Can Maximize Profits
STORY INLINE POST
Q: How can retail be optimized through technology?
A: RELEX aims to help retailers optimize their demand planning, merchandising, supply chain, and retail operations through algorithms and technologies that help them understand consumer demand. By analyzing demand, we determine the necessary inventory to source from vendors to distribution centers, retailers and consumers. We provide technology that helps optimize the flow of inventory at minimal amounts to maximize revenue and profit margins for retailers and help them satisfy the needs of end-consumers.
Q: How does the company help clients that have not digitized any part of their processes or operations?
A: We play a key role in the evolution and digitalization of our clients’ supply chain. We provide a powerful, demand-driven, automated forecasting and replenishment solution that supports all of their planning needs. Since our solution is based on data, it is critical for us to have the necessary data to perform inventory or retail optimization. We use retailers’ inventory data, measuring what they have on hand or in transit. The more granular the data is, the better the insight for business decisions we can provide retailers.
Q: How can technology help retailers reduce waste and increase sales?
A: Our goal is to satisfy demand with the lowest amount of inventory, which means less waste. Inventory handling will always have implied spoilage, but with optimal inventory management, it is less likely that products will spoil. Furthermore, our solution is highly specialized for the management of fresh products. We are one of the leading solutions for managing and optimizing retailers' supply chains and transporting food from vendors to distribution centers, stores and consumers.
We stand out because we consider the expiration dates of the inventory. By understanding how long the food takes to spoil, we can help the retailer make better transportation decisions to get the freshest possible foodstuffs to the end-consumer. We provide a similar service for pharmaceutical retail, which also works around expiration dates.
Q: In which other sustainability areas is RELEX helping companies improve?
A: As a Finnish company, we prioritize sustainability and provide a solution that allows companies to become more sustainable. We help our clients reduce waste through more accurate forecasting and inventory optimization, leading to a reduced carbon footprint. The efficiencies we provide retailers also help them burn less fossil fuel during transportation. We are also working on a project to become carbon neutral in the future.
Q: How can technology help retailers overcome some of today’s supply chain challenges?
A: It is already difficult to anticipate consumer demand, and that is made harder when demand is affected by unforeseen situations. Supply chain disruptions and difficulties in securing merchandise or transportation are affecting global supply chains, making it more difficult for retailers to make the right decisions. Retailers continue to sell on the profit margins that they were expecting and provide for the right product demanded by customers. Our software takes the data points and, using AI and machine learning, determines the underlying patterns disrupting the supply chain and product demand. Companies can use this information to react faster to demand shifts, such as switching out products that are not available.
Q: How do you protect client data during these processes?
A: Our software is in the cloud, and we follow strict security protocols. We are certified in the highest levels of security and follow the highest international standards. We also store data in different physical data centers so we can always guarantee the availability of information to our customers.
Q: How are AI and automation used to forecast demand?
A: Many variables affect how consumers behave, so traditional mathematical or statistical models can only try to forecast demand. AI is able to pick up details and trends that are difficult to notice through other models, anticipate demand much more precisely, and accurately reflect the impact of promotions, cannibalization and even changes in the weather or how demand is affected by local events. Traditional statistical models are useful in most situations, but we have found that we gain even more precision in anticipating demand using AI.
Q: What are some of RELEX’s solutions?
A: We have three main focus areas. The first is demand planning and includes forecasting, replenishment, allocation and other capabilities. The second includes planogram and floor planning. The third is workforce optimization and management, which helps retailers optimize the number of employees needed in a distribution center or stores depending on the time of day or whether there is a promotional event taking place. These three solutions are unified as a single platform, which is unique in the market because these solutions are typically provided by different technology vendors. We are unique in offering these components in a single integrated platform in the cloud.
It is not ideal for optimization to occur in isolation. We use all information captured in the supply chain for demand forecasting. Simultaneously, given space restrictions, the system can optimize how much inventory is needed to satisfy the needs of each store and develop planograms for each part of the store to maximize the available space. Furthermore, we help anticipate how many associates are needed in the Distribution Centers and Stores based on customer demand shifts that happen with promotional activity or other events that impact the demand.
Q: What part does Mexico play in RELEX’s operations?
A: RELEX came to the Americas in 2015. Late in 2021, we decided to open our operations in Latin America and start offering our solutions in the region’s marketplace, with Mexico being one of our most important strategic markets in the region. We invested by hiring a local workforce to offer the solution in the country.
RELEX is now in a hypergrowth phase. We recently obtained 500 million euros in a funding round led by Blackstone Growth, at a valuation of 5 billion euros (USD $5.7 billion), which we will use to hire developers and experts to continue growing and consolidate ourselves as leaders in the market. Mexico and Latin America are key markets for us.
Q: What makes RELEX’s services stand out in the industry?
A: Customer satisfaction is our number one objective as a company. When we implement a solution, we ensure that the customer receives all promised benefits. Third parties and customers have recognized RELEX as a high-value vendor that supports their retail operations. Forrester, for example, places us high in its roster of retail planning companies. We were the only vendor to score 100 percent in a Gartner’s survey that asked retailers worldwide which vendors they would recommend. Retail Information Systems (RIS) placed us at the top of the categories for which we qualify. We have also won three awards from the National Retail Federation (NRF) for Best Fulfilment Advancement, Best Sustainability Initiative and The VIP Challenge Award. We have helped retailers like AutoZone, Bed Bath & Beyond, PetSmart, Circle K, JOKR, Rite Aid, Ahold Delhaize, Sprouts, Dollar Tree, Sephora, Party City, Leroy Merlin and Grupo DIA. Customers like and recommend us. We have never failed in our implementations.
RELEX Solutions helps retail companies improve their competitiveness through personalized products, efficient use of space, accurate forecasting and optimized workforce planning.