SPAR Austria is continuing to pioneer innovative ways to reduce food waste. Although only 1% of the food offered instore goes unsold, the retailer is looking to bring this down further by using data and AI for goods ordering and supply chain management. In cooperation with SPAR ICS – the company’s IT unit – Microsoft, and other partners, SPAR Austria has developed a solution that enables more targeted order suggestions and demand forecasts for all SPAR, EUROSPAR, and INTERSPAR stores.
Using AI, a new IT solution from SPAR ICS analyses data on sales volumes, weather conditions, marketing promotions, seasonality, and other factors to produce a precise forecast of optimal product order quantities per store.
An automatic ordering system that has been in place at SPAR Austria for decades formed the basis of the new system, which has now been trialled in the fruit and vegetables area.
The new system offers a prediction accuracy of over 90%, meaning that the right amount is available in the right store at the right time, thus further reducing food waste.
“The advantages are manifold – not only for SPAR Austria, suppliers, customers, and team members – but above all for the environment. In this project, SPAR uses the potential of technology and AI to meet the needs of our customers and save resources at the same time”, said Markus Kaser, SPAR Austria Board Member for IT, Buying, Marketing, and CSR.
“The predictions are a valuable support for team members involved in the ordering process. AI does not replace previous processes but rather complements them. The optimisation of the supply of over 1,500 stores also has a positive impact on the work of our 40,000 instore team members”, said Hans K. Reisch, SPAR Austria’s Deputy Chairman of the Board.
SPAR Austria implemented the project in cooperation with SPAR ICS, Microsoft, and Paiqo, an AI company. Due to a large amount of data and the variable need for computing power, SPAR chose Microsoft Cloud. Microsoft Azure’s Advanced Analytics tools access cloud-based data, enabling an intelligent supply chain. These solutions provide the necessary requirements to scale with the amount of data.
“Especially in the field of artificial intelligence, we need enormous computing power every now and then, but often only for a limited time. This requirement can be covered cost-efficiently via a highly scalable cloud”, explained SPAR ICS Managing Director Andreas Kranabitl.
SPAR has put together a broad set of measures to counter food waste in retail and in households. The most important instrument is ordering optimisation. Moreover, products that are close to their best-before date are sold at a reduced price on a separate shelf or via Too Good To Go or donated to social organisations. Every SPAR, EUROSPAR, and INTERSPAR store in Austria has a fixed charity partner located close to the individual store.