Wanna grow EBITDA by 100%? Here’s how Piggly Wiggly did it.

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Supermarket companies are embracing digital technology to streamline operations and maximize efficiencies — but what does the new tech actually do? And most importantly, how can AI improve the customer experience while pumping up the bottom line?

Piggly Wiggly Midwest is an example of what happens when artificial intelligence meets the cereal aisle. The Sheboygan, Wis.-based retailer recently brought in Focal Systems, which optimizes everything from inventory management to in-store labor, to automate its stores. The system is now in pilot mode at Piggly Wiggly’s Wisconsin and Illinois locations.

“Piggly Wiggly has been changing the industry since it launched its first store,” said Mark McGowan, senior vice president of retail of C&S Wholesale Grocers, the parent company of Sheboygan, Wis.-Piggly Wiggly. “Our partnership with Focal Systems will enable us to provide an even better shopper experience by leveraging the most innovative retail automation technology available.”

The way FocalOS works is by deploying hundreds of tiny, inexpensive shelf cameras that digitize shelves hourly with some of the most accurate computer vision on the market, according to Francois Chaubard, CEO and founder of San Francisco-based Focal Systems.

The system then uses that data to automate many in-store processes, such as order writing, out-of-stock scanning, planogram creation, schedule writing, and labor management.

“Piggly Wiggly entered into the partnership for the ROI value — which is incredible, as we’ve seen proven across other implementations in different stores and chains,” Chaubard said, noting usage is “resulting in 30%-100% EBITDA growth.”

Does Focal involve any delivery or curbside pickup programs?

“Not yet but that's the plan,” Chaubard said.

Piggly Wiggly continues to grow throughout the Midwest, South and Northeast, said C&S, which operates Piggly Wiggly Midwest corporate stores and services independent franchisees.

Focal recently rolled out its system at the Cooportunity Market, an organic food cooperative in Los Angeles, and to date it has raised more than $40 million in venture capital funding.

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Highlights of FocalOS

In operations:

• Automates out-of-stock scanning, replacing the manual and industry standard of one scan a day with 24 scans a day

• Automates order writing to enable accurate just-in-time (JIT) ordering

• Lets stockers be more selective about what comes out from the backroom, taking out only products that Focal's cameras see can fit in the shelf, increasing productivity of stockers by 2x-3x

• Automates labor management as the cameras update tasks instantly as outs occur and rank-sorts the tasks by lost sales

• Automatically measures planogram compliance and replenishment productivity with validation every hour to make sure stockers are following correct procedures

• Reduces food waste and shrink with improved produce ordering

In merchandising:

• Identifies “chronic outs” — UPCs that are under allocated on the shelf resulting in too much replenishment labor and too much customer dissatisfaction

• Customizes each shelf in each store through Focal AdaPOG, its adaptive planogram

In e-commerce:

• Increases productivity of pickers by skipping items that cannot be picked when they are not in the store

• Reduces substitution as availability increases — a pro-customer application — and enables e-commerce platforms to turn off products that are not available on the shelf