Formulate, a Swedish AI company, and Coop, one of Sweden's largest grocery chains, have signed a agreement to sharpen Coop's promotional offers. Formulate's new AI solution, which analyzes historical transaction data, gives Coop deep insight into which promotions attract customers and drive profitability.
Promotions are key for the grocery business, but they are difficult to evaluate in an accurate way. About 50 percent of all promotional offers do not generate a noticeable sales boost and in many cases basic calculations and experience form the basis for campaign decisions.
Large infrastructural investment are usually required in order to utilise AI in daily campaign work, but thanks to Formulate's SaaS (software-as-a-service) business model, customers subscribe to software, which reduces start up time for the IT organisation. The AI software analyses anonymised transaction data in an environment that does not need to be integrated with existing systems, which further shortens start up.
“Formulate has enabled us to better understand what our members and customers want. This makes our campaigns both more effective and more profitable, while at the same time being perceived as more relevant. We use data we already have, but we get completely new insights based on facts and less gut feelings”, says Jonatan Tullberg, Commercial Director at Coop.
“Historical campaign evaluation is the right place to start if you want to push your promotional offers in the right direction. With today's technology and changing business needs, it should be quick and easy to get started, so that the customer gets value within a few weeks. If you do not get what you want out of services then you should be able to replace them. Thanks to our business model, we know that we remain because we add value, not because we nailed ourselves in system integrations or fixed license, ” says Anna Blomdell, Chief Product Officer at Formulate.
Formulate was founded in 2016 in Stockholm. The company enables retailer to automatically evaluate campaigns. The company has 17 employees and counts among its customers, Reitan (7-Eleven & Press Bryån), Apoteket, and Coop.
Coop is one of Sweden's largest grocery chains with just over 650 stores from Katterjåkk in the north to Smygehamn in the south. Coop is ranked as the most sustainable brand in the grocery trade and has the highest percentage of organic sales in the industry. In total, Coop has a turnover of SEK 38 billion in Sweden and has over 15,000 employees.
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