How machine learning is enabling Morrisons to innovate around its customers

It’s been a successful 12 months for Morrisons. The UK’s fourth largest supermarket has increased annual profits by 12% with a 1.7% rise in like-for-like sales.

This headline success is underpinned by operational transformation at the heart of its business. The supermarket chain has launched a sales-based ordering system across all 491 stores, using leading-edge machine-learning technology to supercharge its forecasting capabilities and automate replenishment.

Automate ordering down to product level

Morrisons’ machine-learning investment is focused on optimising its ambient and long-life products – around 26,000 SKUs – with short-life fresh products soon to follow.

Already, this investment has brought down shelf gaps by 30% and reduced grocery stock in its store warehouses.

The supermarket chain can predict demand down to individual product and store location, by automatically analysing sales data and combining it with external information, such as the weather forecast.

13 million decisions a day

The technology that powers Morrisons’ demand optimisation and replenishment automation is the brainchild of artificial intelligence and machine-learning expert Blue Yonder.

As the demands of Morrisons’ customers change too frequently for staff to make consistently accurate decisions, Blue Yonder Replenishment Optimization automates 13 million decisions on a daily basis, balancing multiple and competing KPIs, to enhance availability while reducing waste.

”It is reducing costs and stock levels, while also saving time for colleagues, and providing a better offer for customers”

David Potts, Morrisons

Not only is this making the supermarket chain operationally more efficient, but machine learning has freed up valuable staff time to focus on improving the customer experience.

Since embracing Blue Yonder’s technology, Morrisons has saved many hours of colleague time per store per week, allowing them to provide better service at the front end of store.

“Our biggest new initiative has been our new automated ordering system,” says David Potts, Morrisons’ chief executive. ”It is reducing costs and stock levels, while also saving time for colleagues, and providing a better offer for customers.”

Gaining ground in a challenging market

Morrisons’ substantial profit increase is particularly impressive when you consider the current grocery climate. The grocery landscape has further fuelled the need to provide the best customer experience. Additionally, operational efficiencies have become critical in the road to success.

By partnering with Blue Yonder, Morrisons has implemented the cutting-edge technology needed to innovate around its customer needs.