How to Drive Retail Growth: Roadmap to AI Innovations [Webinar]

hello everyone I would like to welcome you all to today's webinar how to drive retail growth a road map to AI Innovations before we begin I am going to give a few more minutes for all the participants to join and during our session we will uncover important information regarding business and transformation so in case you have any doubts any questions please feel free to write them down in our chat and we will cover them at the end of this webinar or in a personalized session okay I think we are able to start now with a brief introduction of the presenters and the agenda for today perfect so first of all let me start with an introduction of the hosts so we have Andy Marchenko retail automation expert from the global team based in Poland so hello there Andy how are you? hello Cecilia and good afternoon everyone pleasure to host you today and I hope for a productive discussion thank you and myself Cecilia Flores inventory optimization expert based in Brazil part of LEAFIO's Latin American team today we have a very interesting agenda because

we have divided the structure in six parts so at the beginning we will cover an introduction of our company then in the first part of the content we will navigate through the complexities and the challenges that the industry faces today to uncover the importance of embracing a unified approach to Omni Channel success then on the second part of the webinar Andy will explain to us the importance of harnessing the experimenting system to achieve a strategic Innovation and later together we will debunk the top five misconceptions about a platform implementation in retail finally I will be explaining some real life cases of positive business transformation and with this I think we're ready to go with a brief introduction of our our company so LEAFIO is now present in more than 20 countries with more than 180 projects implemented and 120 collaborators worldwide our offices are located in six countries so we have offices in Poland Estonia Canada USA

Mexico and Brazil and we have an expertise of 15 years on bringing supply chain automation over this time we've been focused on creating Next Generation business optimization leveraging our expertise into providing consistent results for all of our clients and talking about the industries that we attend it's important that we work both with suppliers and with retailers in the case of suppliers we have expertise into collaborating with cpg manufacturers Distributors and wholesalers and in the case of retailers we have expertise in working with several verticals like convenience stores groceries pharmacies e-commerce but but also very specific verticals like Electronics, pet stores, liquor stores, etc. now regarding our clients I am going to mention a few of our recent cases in different countries starting first of all with Spar which is a world famous retail brand based in Malta they chose LEAFIO to work both to transform

their inventory management and their planogram management we also have the case of Farmarcas in Brazil the 4th biggest pharmaceutical Association in this country who chose to make their merchandising process more efficient through our planogram management solution we have the case of Marche Leao' in Canada, of Quality Oil in United States and particularly in Asia to recent projects of of Ecoshop and Flash Coffee today I will be sharing some details or real of real life cases of our clients specifically of Plum Market Novus and Baltic Petroleum so now I will give the word to Andy who will continue with the next part of our webinar Andy thank you so much Cecilia and thank you for the introduction so the next part of our webinar is to really discuss what are the challenges of retail and of course when we look at the retail challenges we look at it from the standpoint of retail operations so really everything that retailers can control and again you know what are the kind of task and daily operations that they're daying so the first part

for them to be successful is of course category management so retail really need to understand what is the best set of products that they are selling and you know where are they selling it and to who they're selling it of course once they Define their category management strategy and all the products they need to also think about visual merchandising so it's not only about what are the products but at which stores are they located at which part of the stores are they located and again are they easily accessible to our consumers once we have defined that we also need to speak about forecasting and replenishment Cycles because again we want our products to be available for our customers but we don't want to invest into too many stocks which is of course provides us limitations with regards to how we can use money better with regards to how we can use money to change our business and make it better and more efficient of course once we Define that we also need to understand you know how are we doing our promotions do we need to include these new products to the promotions and overall who is it going to affect and everything that needs to do

with the preparation to toward the promotion apart from that we also need to work closely with our customers with a goal to increase the frequency of their visits and of course the average check value and those are the great factors because retailers have control over them but there other factors is dictated by the environment which they operate it and of course those factors can cost a significant distress so in the postco era when we look at the word supply chain it's very much Associated for us with the word disrupted because those are the third party factors unstable Supply chains result in unreliable suppliers you know while very often it might not be even suppliers fault because their own suppliers have leted them out down but the important fact if you can look at the category manager whose supplier has let him down and kills his strategy you can understand the amount of distress that this is causing competitors this is again coming from many Direction there are Global

comp competitors Global e-commerce who can come to your market and again without any presence take away your market share but also again we are speaking about competition between larger and smaller firms sometimes you know our customers who for instance represent a smaller side of the business they argue that you know sometimes their competitors get a better price at the retail than they buy it from the suppliers directly so again this is a big factor that causes a lot of distress and everything else to do with fashion weather epidemic conflicts if they haven't caused a lot of pain for you and a lot of Need For Change well you probably haven't worked in the retail because of course they drive the customers they drive the retailers towards the change and we also need to understand the environment in which we operating so there are hundreds or very often thousands of suppliers millions and millions of customers which are generating us and millions of transactions so of course we operate in this big data environment which requires us strong IT solutions for us again

to be operating this data and make and smart as well as informed decisions with regards dat and Andy talking about it Solutions because I I believe it's very clear that um the audience can really resonate with this because of all the harsh land landscape and all of the chaos that sometimes happen in the retail industry so what are the options here talking about it Solutions well there are actually several options but let's look at the path that usually retailers many retailers go and it's been you know fairly traditional so the first one is of course working on your core Mission critical system which is Erp and luckily there are a number of great options so such big companies such as SCP Oracle Microsoft they've been investing heavily in order to be able to deliver those Solutions and they can Al help there are of course a number of drawbacks when it comes to this approach so first of all class all the solutions as Erp are the which takes the longest time to implement so some of our customers been working and it took them two three and even

four years to implement such system again the cost of such solution is in extreme because it it includes every single small function you know like that is concerned to the retail but at the same time the question is is that something that it's really going to help you or is it something that is going to make the change because when we look at Z they have a wide set of functions but do they have that next level technological advancement when it comes to individual Niche areas such as merchandising management or such as inventory optimization or such as loyalty well usually they don't have all the latest upgrades and Trends so what what happens what do you think happens well uh actually all those departments who are working within retail they go and they start shopping for those Solutions individually so they just buy you know merchandising Department he goes and buys a system which specifically helps them merchandizing again marketing Department goes and buys the system which only helps them with loyalty and this is better for in many cases because again

this can be much faster because it doesn't take so much time to implement but the issue is that is that you have to support in parallel all those different solutions you have to pay all those different subscription fees to all those different companies and the important part it doesn't help your operations as it doesn't have that Synergy it doesn't provide that insights and it doesn't feed the AI with the big data it requires to bring you to the next level of results it might even bring a bit more of complexity UHS AB a lot more complexity but there is a third approach and the third approach what we are going to discuss about and this is another approach that can help retailers to gain the attaction and fast results when it comes to digital transformation challenges and here we are speaking about a unified platform approach which can help to automate various areas of the supply chain but only this one solution and usually those area includes such things as a category management where again a category manager can see all the skus all the different segments

how he works with them where are they selling and where is they selling well as well all the different suppliers he has to work so so when it comes to category management he has a centralized space where he has all the data to make those decisions apart from that those platforms also can include a merchandising for fls that can help you to create a digital PN of your uh actual store and help you understand you know how can you improve the layout how can you improve the planogram is it really the most efficient or is there room for changing and experimentation uh apart from that there are also those systems can include number of algorithm that help can help you to improve the forecast accuracy for the demand of your products and of course make better replenishment Cycles to have a better control over your overstocks as well as lost sales so uh definitely there are number of use cases and the important part is that they can work together to help you get this type of uh speed of the executions that retails require to navigate within that complex environment and

also important that there are many functional areas involved here and having them convers conversating with each other is important so do we have an example here to Showcase how this works in reality absolutely and kind of like uh almost everything that you do in retail supply chain will somehow affect your cross functional department so let's speak about the most common example and uh you know how it usually happens so retailers they you cannot sell one product you know for all your time there are of course very specific exceptions but overall retailers have to rotate their assortment they have to find a better deals they have to find something which resonates with their consumers better so they need to be constantly rotating the assortment and seeing if they can get a better Financial result so after that they also after they Define the assortment they also need to understand and set up how are they going to locate them physically on the store level where they going to place them how is it going to affect them you know if there going to be any calization in place and again you know uh basically Define on where is it going to be located and how much of

it shall be located for the layout and of course once that all done only at that point procurement Department can start ordering the product but when we are talking about the unified platform approach we understand there is one unified interface from which category manager can see all the information about all his SS within the category what are the sales data how well they're doing what is the marginality and which one shall be replaced and the moment that the person does it the merchandising team automatically gets all the information about the product about the category about the stores in which it should be placed and all the information about again what are the alternative products to be able to compare demand and make certain predictions with regards to the demand for this product again the important part is that he automatically gets his task and he has all the same information in the same environment after he has placed the products and established the merchandising strategy for that the system can automatically start ordering products based on the information and based on the conditions we have from the supplier so the question is you

know how much time it would take you for the question is how much time it would take you to change the product to make those changes and of course when you're operating within a unified system environment it can help you make it much and much faster but again that's not the only benefits when it comes to the unified system the important part is of course it pro helps you and provides you analytics which are the based on the big data and big data is the best food for the AI to help you generate those decision and of course the speed of decision making can be also significantly faster because if you can see thread if you can see shock and if you can see challenge the faster you can see it the faster you can put your uh strategy to eliminate this risk the faster the better result you're going to get uh of course uh apart from that all those unified platforms help to unify multiple multiple teams again merchandising and marketing promotion team and other teams again we are working towards the same goal and of course when we have this unified

environment it's very easy to understand the goals for all of us and it's very easy to understand how my work affects other department and how other Department's Works affects me what is also extremely important unified platforms are not about one solution fits all and there are different uh there are variety of it architecture that our customers have they can have you know some parts very well automated but other parts of the supply chain are still causing bottlenecks so their Solutions might not be again might not include everything they might select some specific parts that would greatly enhance their workflow and but the important part is is also you know a one-time integration with one platform you can Implement all those changes significantly and significantly faster but uh definitely it's not that you know like just take the platform everything else uh it's horrible this is more about again how can you maximize your return on the investment in digital transformation and how do we evaluate those platforms is really uh

first of all based Bas on how fast it can help you generate the return on investment and I guess well for Benchmark purposes want to share you know like how Leia unified platform achieves those so our goal and our pricing is based on the idea that we need to provide our customers return on investment within a six months so this is not Netflix this is Spotify this is an Enterprise software that makes you much more effective and of course while operating in the Big Data environment this type of software allows us to really accurately see causes and effects and how our platform helps to improve the business so apart from the return on investment it helps you to achieve through again your key metrics so it helps you to increase your sales per food by up to 15% also helps you to to heavily decrease your overstocks and it can calculate your demand much much more accurately as well as overall increase and accelerate your turnover but also a very big part which shouldn't

be U that shouldn't be oversight is of course the amount of manual labor it requires the thing is it doesn't you can produce amount of manual labor for all the calculations and number of decisions you are making by 80% because first of all making those decision faster because you have the view from each and every point and of course the system does all those calculations so you don't have to do it yourself and of course manually uh there of course number of other factors you know retailers work with a number of goods that have a short-term uh life cycle or you know like can be expired very soon so again the system can also helps you to significantly reduce reduction of those waste help you to better understand your assortment what is selling and selling where and why is it selling and help you to optimize the number of goods that you're working with as well as to decrease overall the number of your lost sales MH and the importance to connect this and to end perspective because sometimes those efficiencies might be lost if we have a siloed

approach but in with this unified approach you can really see the project as a whole and be able to connect and be able to actually see this business transformation taken reality taken into into life absolutely absolutely there are other of course advantages to to unified system and one of them is that that can help us to uncover those different uncertainties the common factor between the exter external uh factors that we looked is of course we are uncertain whether they're going to happen and how badly are they going to affect us and one of the ways that can help us better understand Market better understand overall our environment is the experimenting system that is additional advantage that is enabled by unipod platforms and the concept is based the idea that instead of making big huge changes and then hoping for the best test results we uncover the data and the environment by making a small local experiment we are able to execute them in a very fast manner

to get that live data and to understand exactly what is happening now and based on those local results we can find a direction towards skating so again what shall we do what decision shall we make shall we make this change across the whole chain or shall we conduct another experiment and find some better results and number of use cases it can be applied just to give you an example for some of them so for instance merchandising layout it can depending on how you place your products it can have multiple effects with regards you know what is the number of stock you can have how are your sales going to be and again other factories so again instead of you have the chain for instance a thousand stories so instead of asking your local story in place and each and every single one of them to do a lot a lot of manual hard labor to change everything how about we can change it for instance in one store or we can change in one store at each region or if you're not going to be sure about the results let's take two or three stores in each region but the goal is of course only to scale this change once you have understood that this is going to be a positive

change and Market also responds positively apart from that let's not speak only about customers how they respond let's speak about uh suppliers and their terms you know so we have the price and other factors when we are negotiating with our suppliers the question is can we really compare them so let's say we have the same product but one supplier is cheaper but provides you with much better delivery schedule and allows you smaller minimum order quantity but the price is a little bit more expensive and there is a question which supplier to work with you know naturally you can go and say let's go for the supplier with a smaller cost with a smaller price which can also be a good decision but are you sure about that because the if we need a longer delivery schedule if they're like you know bigger distance between those delivery Windows implies that we would have to have a much higher level of stocks and of course that has a cost itself and with regards to minimum order quantity same so sometimes if the minimum order quantity is too high and we are not capable to sell it we are going to get a waste and as well some other inefficiencies

so the question really as again the question is really which one is better and in that case we can simulate and see the results and effects that for instance this decision could have on our average inventory cost as such well talking about all of that uncertainty this approach of experimenting system might even reduce even more the risk when facing this digital transformation so I think it's very informative and actually that takes us to the next part of our webinar because we interact a lot with clients as we discussed at the beginning of of this webinar clients of different verticals and with different business needs so in this case we have compiled the five most common prejudices for this business and software implementation for efficiency so we will cover the top five right now so the first one that we hear a lot is this uh concern about the need to abandon the current Erp the current processes that are already tied to it and of course all of the effort that has been

placed with the current situation what is this in reality Andy do they really need to abandon their current Erp well so the first comes first well they don't need to abandon a because if they do so and only use the platform platform cannot work from nothing it requires the data that it takes from the airp so the goal of the platform is not to replace your Earp but to supercharge and make it much stronger and provide it all the additional features that are required for you to be competitive in the today day and age and of course that's an important factor when it comes to Earp so Earp is going to stay there if there are some parts of the Gres which are very well work on the airp which are critical and don't cause any issues to the supply chain there is no need to replace it but every retail company one way or another has a number of supply chain issues which can be automated and of course provide a great impact towards their financial performance super okay next Prejudice that we hear a lot about is regarding the implementation times and

complexity so usually there is this misconception about all of the solution taking a long time to implement and also taking a lot of resources from the company so what is the reality behind this Andy well the reality behind is is that no change comes without an effort and of course to become better we have to do some changes the question is what are your options here if you are looking for the fastest options that would generate again the faster results and enable your team not to work on the new system in two or three years but enable them to work it in two or three months from the moment that you made that decision then of course you would have to take U that of course you would have to implement the platform because again two three months is significantly shorter time frame than two three years of course of course okay so next misconception that we have is that platforms are suitable most likely for large corporations so we talk with different business profiles and sometimes they are more smaller sized business mediumsized business so what is the reality for

for them is it possible to implement a unified platform approach when the business is not that big well uh interesting enough one could argue that a smaller companies would benefit much more from the unified platform approach because if you look at the larger business businesses they already have a large landscape of different applications and they feel like you know it's automated and of course each and every application helps bigger business to be more competitive so again from our experience you usually the smaller companies take more of different modules as they have a very low level of automation there so in reality if you are speaking about the type of project which would include full set of modules that would most likely be generally a smaller company but which wants to be more competitive and which just doesn't accept the fact that the customer is going to go to their competitor rather than their own store and an important Point here to mention is just that this integration happens only once but then we can connect the modules uh

and accompany the growth of our client together so in this case this is not something that would be considered like a bottleneck or a risk for medium-sized companies okay next Prejudice uh talking about price now uh let's start the hard discussion here because into today's unstable world all of the uncertainty that we explained at the beginning and all of the situation sometimes it is not possible to plan the expenses so talking about this uh this need of into creating efficiency to the business is it considered an investment to focus the resources of on one of those type of solutions or should it be considered as an expense well it depends how you treat it if your goal is only to make your employees life a little bit easier without the gain on the financial performance then that would be expense but thought are not the type of the projects that for instance we would go to and of course this platform again when we evaluate them and we

evaluate the price tech we need to see and look at the impact first of all and once we understand the price for the platform and the impact it's going to bring us we can derive return on investment and as well how fast can we achieve it so the question is to you really cilia if you are losing $220,000 on Overstock each month but the platform cost you only like several ,000 each month you know does it come as a significant price tech or it doesn't yeah maybe the current processes are even more expensive than implementing a solution that will solve and not only solve but actually enable our business to scale and to grow so I think that is very clear that this is not only an investment but it's a decisive point and decisive uh Improvement for all of our companies so so I think it's it's totally an investment here and now we reach the top five uh here with the interface so usually companies are used used to their current processes the teams are also used to certain interfaces

interfaces to certain way of working so when we are already used to the ways the way things are how do we transition into this new solution without having an steep learning curve that's a great question really Cecilia and you know I I love this question because you know whenever I get a new solution it also takes me you know some time to learn and to understand but let let's go deeper into the question so they're you said like they're used to their processes but it's quite likely that those are the specific processes that are causing inefficiencies you know if I like doing something but it harms me then I'm probably doing something wrong and uh but of course when we are speaking about the adoption of the platform there are important factors that you need to consider and those are critically important when it comes to implementation and choice of the platform so again what kind of support towards on boarding are you getting from your vendor again what kind of trainings are you getting from the vendor what is the approach towards making users to adopt them

and for instance I can give you an example of how do we make you know for instance how liio makes it so first of all we are not only looking like you know here's the platform you know use it as you like no it's really about helping you to not only change digitally but also change internally because again all platforms are requiring in many cases old processes so the goal is for us not only help you establish those digital tools but also help to re-engineer your processes and usually we do it by actually working together and that's really an operational mod so when we start our projects we usually our trainings go on a limited category on limited business and we just start working use Case by use case with uh with future end users you know the people who are adapting and of course they have a dedicated customer success they can call every time but of course every time they go through a new use case how to add new the product to assortment how to change this planogram again how to review a specific type of data and report we are doing it

together so you really if that's a big concern for you if you have very large team and you're very concerned about adoption really evaluate the change man management and uh uh change management practices of the vendors that you are planning to work with as this is of course is going to be an important factor for you totally toally totally and that actually brings us to the last part of today's session which is the real life case studies when uh as we mentioned the platform approach helps us achieve business results much faster and much more efficiently so now I am going to share some of our collaborations that we have done across the globe in three different cases and with three different business needs so the first one of them is uh Plum Market Plum Market is one of our customers and they wanted to become much much faster in their operations they were clearly expanding and consistently opening new stores so when we started working with them they were uh facing the critical part of preparing the stores with regards to assortment with regards

to planograms with regards to inventories of and of course they need to standardize their processes so in this case what is great about this is how the platform approach can actually help and save the time increase performance and actually connect the full operation from an endtoend perspective so we are very very very proud to share that with the implementation of letho one market achieved a 30 32% growth uh 32 sorry 32% faster store launch and was able to connect their merchandising process in 100% which is not only talking about the merchandising but the business process as as overall so in this case uh taking an example of the time that they used to take before Le implementation for stocking shells they used to take 14 days when implementing Leia they were able to reduce This Time by four and a half days so this was only possible because of having a complete floor plan and planograms available in our system so in this

case uh talking about speed PL Market is a very interesting case study and now talking about the experimenting approach we have a second example of novus Novus is an European supermarket chain that we have been collaborating with for over nine years an important part of mention here is that when we started conversations almost a decade ago they used to have around 40 stores and now their business has grown Ena them to buy and to acquire an important business group called vaa scaling their operations so at the start of our implementation we had this experimenting approach that we mentioned throughout today's session connecting our inventory management system to a specific stores and then comparing them to the rest of the chain we connected and talking about the field we focused on delivery schedules and purchasing process and in this case we were able to see in a 12we perspective how the excess of inventories were reduced by

48% and that we were able to increase their performance in sales their performance in uh reducing other negative indicators so in that case we were able to actually almost a decade ago have this experimenting approach to provide this business results and then scale to the whole retail chain and when we did that the results were outstanding I'm just uh just because this is very important for no you know it's a very complex case but I'm just bringing here the main indicators so when we were able to actually scale the operation completely the results were outstanding we were managed to we managed to increase their sales in 10% we managed to increase uh their uh improve their turnover by 15% reduce your Stocks by 11% and actually achieve a service level of 98% and in this case the same team was managing so imagine the level of improvement of the performance talking about the same persons but now connecting our system was very uh decisive into bringing this

business transformation and just to finish this novel example a very important aspect to consider also is that we brought this uh long-term Coral collaboration but also this experimenting approach so Leo nowadays is a platform that enables them to do some tests in their stores so they can prove certain initiatives for category management they can actually focus on certain stores and make sure to compare this before and after actually providing them with all of the support and all of the platform to have this system changes and even grow uh in a faster way so now we have reached the last real life case and this is one of my favorite customers actually uh is it is based in Europe and it's Baltic petroleum Baltic petroleum is a chain of 84 gas stations and they are primarily based in lith Lithuania and as you know of course they primarily sell petrol of course but they also have a large number of convenience stores so they were facing fa in similar issues of some retailers

and of course they wanted to grow they wanted to be better so they had already an Erp system but they were facing the typical limitation that Erp system BR brings so for example it was very hard for them to understand their assortment matrixes it was very hard to have all of the parameters uh transparent transparently they had a decentralized order management so their system was a bit more complex and was not really helping them to to to have this convenience in their day-to-day operations so of course and they wanted that unified platform to help them with that and it was very uh important to say that we were able to centralize their process and to improve their indicators the positive indicators in 3% within the very first months of implementation so in this case we uh on the one hand reduce the negative indicators for example like over stocks and we are able to increase the performance on the positive indicators bringing not only only this return of investment that we discussed during our session but also bringing bringing

this business transformation and with this uh we have finished today's content so I would like to thank you all for joining today and of course if you're interested into learning more and more of our Solutions you can visit our website leo. and in case you want to learn even more and see how we can particularly help your business you can always call to our numbers or just leave your name in or landing page for a demo request we will be happy to answer all of your questions in a personalized session and make the analysis whether the solution would be able to accelerate your business or whether you're already doing very very great so I just want to to see because maybe we received some questions here during our session I don't know if we will be able to to answer to them right now or maybe we contact the person directly in this Cas so yeah absolutely uh absolutely Cecilia and thank you very much for your particip ipation here and thank you for everyone today so it's important that we can of course help to learn of the platform much better and again if you have

any questions we would be happy to uh to invite you to the personalized sessions where we can again learn what is currently happening in your business and again you know whether the platform could bring you the potential effect and what kind of solutions would be help so again please uh feel free to write to our website uh you just have simple bottom contact me and again once you do it you will be you will get a call back within the next half an hour so thank you so much for the participation today and we are very hopeful to hear from you soon thank you so much