Coles embraces AI for fresh produce management, in latest shift towards retail tech

Coles has partnered up with Finnish tech provider RELEX, to replace manual ordering systems for fresh fruit and veg with AI-enabled, cloud-based tech designed to improve efficiency and reduce waste.

The technology will be rolled out in all 850 Coles stores throughout the country, and in seven fresh produce distribution centres.

The RELEX platform will integrate with Coles’ existing in-house analytics system, which has already been rolled out to provide forecasting for other non-fresh categories, chief information officer Roger Sniezek said in a statement.

“This will enable an improved customer offer by not only taking into account past purchases, but also factoring weather and local community events into the forecasting algorithms,” he said.

This move from Coles is just the latest example of Australia’s grocery behemoths embracing a new, tech-enabled future of retail.

Last week, Woolworths announced it has paid $223 million to increase its stake in data analytics business Quantium from 47% to 75%, while also ramping up its use of the technology to help shape its strategy and interact with customers.

Woolies has also recently made a multimillion-dollar investment into Melbourne startup Marketplacer, through its venture capital firm W23. And, Marketplacer is set to build its new online empire.

This is all part of a broader shift in the sector, exacerbated by the COVID-19 pandemic. Speaking to SmartCompany last week, Marketplacer co-founder and chief Jason Wyatt said the pandemic was a “catastrophic event that forced behaviours to change overnight”.

For retailers, that meant perfecting — or even creating from scratch — their e-commerce offerings overnight. And, as the economic impact continues, it’s never been more important to know your customer and remain competitive.

However, Kevin Gunn, Coles’ executive general manager for central operations and transformation, said centralising the supermarket chain’s replenishment model has been on the cards for more than a decade.

Fresh produce is one of Coles’ “most complex supply chains”, he explained in a statement, with short shelf life, seasonality, price elasticity and diverse growing seasons presenting a suite of unique challenges.

Using the AI technology is intended to help the grocery giant expand the range and availability of produce, and simplify processes for both internal teams and suppliers.

But, Gunn also pointed to the environmental benefits. Centralised ordering should reduce waste on existing products, and minimise waste on new ranges, “which is important to us as Coles aims to become Australia’s most sustainable supermarket.”