Russian Retail Giant, Global Manufacturers Turn to AI to Solve Supply Chain Inefficiencies

Magnit is one of Russia’s largest food retailer and the fourth largest retailer in the world.

The non-profit retail industry cooperative Efficient Consumer Response Europe (ECR), Russian retail giant Magnit, and some of the world’s leading retail manufacturers have partnered with OSA Hybrid Platform (OSA HP), an a technology service company that provides AI and big data solutions for the retail industry.

Per the partnership, Magnit and other retailers will test a pilot project based on ECR’s and OSA Hybrid Platform’s joint technologies. The pilot will build on the successful trials OSA HP has already implemented with such companies as Metro, Coca-Cola, Danone, and PepsiCo.

The project will be installed in 100 retail outlets in Moscow, and the system’s alert signals will be processed by each store’s own employees. It will allow its users to detect the absence of on-shelf goods in-real time, and they can transmit this information to merchandisers in stores to correct these situations.

If the test results are satisfactory, Magnit will implement the technology throughout the territory of Moscow and the Moscow region for its grocery stories, family stores, and hypermarkets .

At the moment, technical work is being carried out to deploy the system. The pilot will end and results will be analyzed by September 2018.

Its main objective is to increase product turnover, reduce understocking/overstocking waste, and help retailers and manufacturers alike to increase their bottom lines. In solving stocking and inventory inefficiencies, the project will allow retail businesses to keep accurate information on each product and each outlet, pinpointing the problems that are affecting sales while also working towards solutions to fix these problems.

The project will also test computer vision and image recognition technology, both of which will allow OSA HP to track low-turnover products with consistently high accuracy.

The Director of Magnit’s Assortment Management Technology Department, Constantine Gurov, said regarding the partnership:

“In the face of increasing competition among large networks in the retail market, the issue of quality administration for the availability of on-shelf goods is becoming more and more important. This task cannot be solved solely by centralized supply chain management systems; it requires a tool for pinpointing problems in individual stores and operational communications with in-store employees. We expect that, with the help of ECR’s and OSA HP’s services, we will be able to reduce the negative impact of errors with product handling/inventory and on-shelf issues.”

Founded in 1994, Magnit is one of Russia’s largest food retailer and the fourth largest retailer in the world. The company operates 12,283 stores in over 2,000 locations, including 9,700+ convenience stores, 242 hypermarkets, 3,890 cosmetics stores, and 210 family stores.

Executive Director of ECR Russia and Co-chairman of ECR Europe Maximilian Musselius stated, responding to the partnership:

“Magnit runs the largest network of stores in the retail food industry in Russia, an industry that has always had high demanded for innovation and breakthrough technology. Our platform analyzes processes that affect sales in real-time and with the highest reliability. It allows retailers to see the shelf with the eyes of the buyer and improve the service for him.”

Working closely with ECR, OSA Hybrid Platform (OSA HP) has developed services that have already helped more than twenty European retailers and manufacturers eliminate product waste to drive revenue. For these early adopters, it has helped them to increase sales as much as 5-7% and has generated more than $1 million in revenue.

OSA HP is building on this success to launch OSA DC, the platform’s decentralized, blockchain-based iteration. The platform will seek to disrupt the $25 trillion global retail industry by helping retailers and manufacturers eliminate product waste that accounts for over $800 billion in lost sales and discarded goods each year.

Establishing the world’s first decentralized, AI-driven data marketplace, OSA DC will provide business-to-business and business-to-consumer solutions for the retail industry. It will leverage OSA HP’s already proven suite of technologies to make the shopping experience cheaper, easier, and safer for all involved.

Retailers and manufacturers will save money by implementing more efficient product monitoring strategies, and consumers can use OSA DC’s services to save money, save time, and stay healthy by making well-informed purchases.