Business Case

The U.S. grocery industry generates more than $600 billion in yearly sales [1]. The average annual grocery operating profit in the U.S. is about 3.25% of total sales, with approximately 55% of sales derived from perishables. Losses arising from perishables is 6% of total perishable sales due to deep one-time manual markdowns to achieve sale before sell-by date, total margin losses for wasted items and waste disposal costs. This means that losses from perishables equates to 3.3% of total sales [2][3].

  • Therefore, the recovery of 25% of perishable loss is equivalent to 25.38% increase in the total operating profit

Razor-thin profit margins, short shelf life and high labor costs demand an automatic lot-based promotion solution for perishables. Furthermore, the communication of promotions to consumers at the point of purchasing decision must be short and simple.

A previously printed Cycled Discount Label on a product associated with a lot-based Digital Coupon enables simple personalized promotion communication (See Social Impact). This clear promotion communication triggers the instant decision to purchase perishables from the promoted lots.

This approach eliminates labor-intensive manual relocation and promotional labeling of fresh perishables approaching their expiration dates.

The lot-based offers are automatically redeemed at the retailer’s Point Of Sale (POS) after standard GS1 DataBar scanning.

  • GS1 DataBarTM standards, including attribute information (using Application Identifiers), can be used by all trading partners in an open environment
  • Mobile-influenced store sales are anticipated to grow to $628-$752 billion by 2016 [4]

[1] FMI – Food Marketing Institute

[2] Tools to Captivate the Connected Customer by: Andy Park, IBM 2011

[3] The Challenge of Food Waste by: Björn Weber, Sarah Herrlein, Greg Hodge, PlanetRetail, sponsored by IBM 2011

[4] The dawn of mobile influence, discovering the value of mobile in retail by: Mike Brinker, Kasey Lobaugh and Alison Paul, Deloitte 2012

DataBarTM is a GS1 trademark