It is 3pm. In-store computers at a convenience store chain in Tokyo’s Shinjuku Ward decide which food items should be discounted and by how much. Assorted sandwiches, one, 20 yen ($0.13) off, and crispy ham and lettuce sandwiches, three, 30 yen off, a display says.
Then a manager prints out price tags and goes about attaching them to items. Eight assorted sandwiches line the shelf, but only one, approaching its expiration date, is discounted.
More Japanese convenience stores and supermarkets are now using artificial intelligence (AI) to analyse data such as past sales figures to decide what discounts to apply to perishable products to boost sales and cut food waste, reports Kyodo News Plus.
Lawson Inc, one of Japan’s largest convenience store chains, introduced a system in 2015 where AI at its head office advises store managers and experienced staff on product management at all stores.
To calculate how far to lower prices, the software considers a store’s sales, delivery times and the local weather conditions to propose a price that gives the product the best chance at being sold.
How AI is helping Japan convenience stores, supermarkets profit from reduced waste
Then a manager prints out price tags and goes about attaching them to items. Eight assorted sandwiches line the shelf, but only one, approaching its expiration date, is discounted.
More Japanese convenience stores and supermarkets are now using artificial intelligence (AI) to analyse data such as past sales figures to decide what discounts to apply to perishable products to boost sales and cut food waste, reports Kyodo News Plus.
Lawson Inc, one of Japan’s largest convenience store chains, introduced a system in 2015 where AI at its head office advises store managers and experienced staff on product management at all stores.
To calculate how far to lower prices, the software considers a store’s sales, delivery times and the local weather conditions to propose a price that gives the product the best chance at being sold.
Store managers have been adjusting prices based on experience up until now, but relying solely on human judgment often resulted in undiscounted stock going to waste or items running out. The AI evaluates about 270 product categories four times every day to prevent this.
The system has led to improved business performance for the group. In 2021, in the six prefectures comprising northeast Japan’s Tohoku, the gross profit per store rose by 0.6 percent, while the cost incurred from wasted products was down 2.5 percent.
The system has enhanced the group’s financial performance. In the six prefectures that make up Tohoku in northeastern Japan, the gross profit per store increased by 0.6 percent while the cost incurred from wasted products was down 2.5 percent in 2021.
Since then, it has expanded further. Between June and September of this year, 162 Lawson outlets in the capital adopted the system. The company plans to start a full national rollout in fiscal 2023, According to Kyodo News Plus.
Japan’s major supermarket chain Aeon Retail has also developed an AI-powered discounting system which was implemented at about 350 stores by September. The system analyses the sales performance of each store and works to price in-store-prepared products at a level that ensures they are sold by closing time.
Each day at 5 pm, employees at Aeon’s Funabashi branch in Chiba Prefecture use a portable device to scan barcodes of the remaining items on the deli produce shelves. When a university student who works part-time there checked the 200-yen rolled Japanese-style omelette, the device displayed “18” – meaning, at 5pm, if there are 18 omelettes left, they presumably will be sold by the 11pm closing time.
There were 24 omelettes on the shelf at that moment so the employee entered “24 omelettes” and sent the data to the centralised system. It instantly calculated a 10 percent discount for the omelettes and generated 180 yen price tags.
“The introduction of the system appears to have been a welcomed development. It ended the practice of needing to make huge discounts right before closing time,” an official at Aeon Retail told Kyodo News Plus.
Source: United News of Bangladesh