2022.01.05 Release

ExaWizards and Sugi Pharmacy Jointly Developed “AI for the Optimization of Product Assortment” for Retailers
– Automatically created product assortment models covering various product categories maximize sales from retailers’ viewpoints –

 ExaWizards Inc., a company that develops AI-enabled services to solve social issues (Headquarters: Minato-ku, Tokyo; Representative Director & President: Ko Ishiyama; hereafter, “ExaWizards”), is proud to announce that ExaWizards jointly developed “AI for the optimization of product assortment” for retailers with Sugi Pharmacy Co., Ltd. (Headquarters: Obu-shi, Aichi Prefecture; Representative Director and President: Katsunori Sugiura; hereafter, “Sugi Pharmacy”), and started operate it at Sugi Pharmacy’s drugstores with dispensing facilities.

☑︎The Background Story of the Development of AI for the Optimization of Product Assortment
 To optimize product assortment is an important strategic goal for retailers not only to improve in-store productivity but also to offer a better customer experience. Therefore, they arrange products on their store shelves so that they can meet customers’ needs changing on a daily basis, or respond to the change of their purchase behavior. However, there are hundreds of products by category, out of which they make combinations for promotion or demotion on the shelf under several conditions to realize efficient shelf space allocation replacing one product with another in accordance with customers’ purchase trends. This work is hard to be manualized since there are a vast number of possible combinations. Also, choosing the products that’ll be placed on the shelf relies too much on personal skills, which makes it difficult to make or remake such combinations as can lead to the improvement of sales efficiency.

 As a solution to the above problem, ExaWizards and Sugi Pharmacy jointly developed “AI for the optimization of product assortment” with an aim to support retailers in improving in-store productivity and offering a better customer experience, and started the operation at Sugi Pharmacy’s drugstores with dispensing facilities (“Sugi Yakkyoku”).

 The “AI for the optimization of product assortment” realizes the optimized product assortment from retailers’ viewpoints leveraging its two functions: “Product Assortment Model Creation” which automatically makes combinations leading to the improvement of sales efficiency out of enormous numbers of products by utilizing the mathematical optimization technology, and “Substitutability Analysis” which analyzes product substitutability based on the purchase information of products marketed in the past to identify the products that have little impact on the total sales even though being removed from the shelf.

☑︎ Sugi Pharmacy expects to see sales increase and realize work process standardization through product assortment model creation
 Sugi Pharmacy had manually created product assortment models based on the combinations they made from hundreds of products classified by type into many categories, the purchase behavior of customers using its approx.1450 stores across Japan, and geographical characteristics. This time, the company conducted a simulation of the AI prior to introducing it to its stores, and found that a certain amount of sales increase can be expected if this work is standardized by the AI.
Based on this result, Sugi Pharmacy is planning to promote the optimization of product assortment at all of its stores using the AI going forward.

[Overview of AI System for the Optimization of Product Assortment]
・Function 1: Product Assortment Model Creation
 The mathematical optimization technology of the AI automatically makes product combinations that can improve sales efficiency based on the target product list and sales information. The AI covers various product categories handled at retailers including drugstores, and helps improve in-store productivity from retailers’ viewpoints

・Function 2: Substitutability Analysis
 As for the target product, the AI analyzes customers’ purchase trends in the past to identify a similar product, and calculate the possibility for them to buy it instead of the target product. This function helps retailers realize the product assortment that doesn’t easily cause a decline in sales even though some products are removed from their store shelves enabling them to conduct measures to improve in-store productivity such as increasing the shelf space for products selling well.

 ExaWizards will continuously contribute to the realization of a better customer experience in the retail industry by pursuing the optimized product assortment and improving in-store productivity through the “AI for the optimization of product assortment” going forward.

[Corporate Profile]
Company name: ExaWizards Inc.
Location: 21F, Shiodome Sumitomo Bldg.,Higashi Shimbashi 1-9-2, Minato-ku, Tokyo
Founded in: February, 2016
Representative: Ko Ishiyama, Representative Director & President
Description of business: Industrial innovation and resolution of social issues through development of AI-enabled services
Corporate site: https://exawizards.com/

<Inquiries about news releases>
Public Relations Department, ExaWizards Inc.
E-mail: publicrelations@exwzd.com