Atriny Group has been automating retail businesses for over 15 years
If you’re interested in discovering how we can help your business, we highly recommend delving into an interview with our founder and CEO of Atriny Group, Pavel Shcherbakov, as well as the CEO of Consulting for Retail, Robert Rishko. In this interview, you’ll be able to gain insight into the latest retail trends, as well as what the future holds for retail development over the next 5-10 years.
Additionally, you’ll learn about the essential success factors for retailers in the years to come and discover innovative solutions and technologies that can help retailers stay ahead of their competitors.
Let’s get started!
- How do you assess the current state of retail? What are the main trends you are seeing?
Pavel, founder, and CEO of Atriny Group
The current state of retail should be assessed on two levels: where market leaders are going, since they often dictate trends and innovations in the industry, as well as market transformations considering crises and changes in the purchasing power of the population.
In general, there is a trend in the market towards active automation of retail trade processes, as well as consolidation of retail, i.e., a kind of “absorption” of smaller retailers by larger players.
The general trend of modern retail, which was confirmed, in particular, at the Xcelerate 2023 conference organized by our partner, SymphonyAI Retail CPG, is the growing role of artificial intelligence (AI).
More and more retail companies are already implementing AI-based solutions to gain a competitive advantage by increasing forecast accuracy and managing assortment, promotions, and pricing.
At the same time, trends in food retail differ from trends in the fashion segment, electronics, or DIY. Depending on the segment, retailers may adopt different strategies in response to market changes and challenges.
Robert, CEO Consulting for Retail
I would evaluate the current state of retail in two aspects: the state of those markets where our company operates and the global world market.
In the market of the CIS countries, where we mainly operate, the situation is quite complicated because the hostilities that Russia launched have affected these countries in one way or another. The state of retail here is not conducive to the active promotion of new ideas and the introduction of innovations. Nevertheless, retail continues to develop and grow.
As for trends in both markets, I would first of all highlight the following trends:
- Transition from hypermarkets to convenience stores. It does not mean that the hypermarket format is dying out, but it is losing market share, turning into a “weekend shopping” format.
- Increasing the share of instant products or ready-made meals that just need to be heated in the microwave. Good examples of this are the Kolo retail chain in Ukraine and Zhabka in Poland.
Another important and long-term global trend is the strengthening role of artificial intelligence in retail trade. It was also noted at the international conference Xcelerate 2023, which was organized by our partner SymphonyAI Retail CPG in Paris. At the event, the lion’s share of reports was devoted to AI-based products and their use in retail.
Among the currently most popular AI-based solutions, we can highlight solutions for:
- building the buyer’s Decision Tree;
- assortment analysis;
- demand forecasting;
- order formation;
- price formation.
- How do you think retail will develop in the next 5-10 years?
Pavel, founder and CEO of Atriny Group
I think that in the next 5-10 years, retail will become more unified.
According to statistics, today’s buyer is willing to spend no more than 2.5 hours a week on shopping trips. The consumer values his time and wants to spend it on more important things than buying groceries. In this regard, retailers will strive to make the shopping process as fast and convenient as possible. In particular, convenience store formats will be actively developed, where customers can quickly and easily find and purchase the necessary goods.
In addition, retailers will begin to more accurately take into account customer behavior at different times of the day. After all, the same buyer can more often purchase products for lunch in the morning and products for dinner in the evening. And today there are vivid examples when the store is restocked 2-3 times a day. Understanding the differences in consumer behavior depending on the time of day will allow you to accurately formulate the optimal assortment and inventory at a specific hour, thereby increasing sales and further meeting customer expectations.
Also, most likely, processes such as online sales and the sale of ready-made dishes will actively develop.
A good example of a growing online market is the Magnum retail chain in Kazakhstan, where, after the launch of dark store format stores, the share of sales through e-commerce was about 15-20%. It is a very good result, better than in some European countries.
I would like to give an example of the chain of homemade semi-finished products, “Galya Baluvana”, Ukraine. In 3-4 years, the company has gone from 1 point in the West of Ukraine to 700 outlets in Ukraine and more than 100 outlets outside of it, mainly in Europe, but there are also several outlets in Canada and the USA.
- What are the key success factors for retailers in the future?
Robert, CEO Consulting for Retail
A retailer that understands its customers has a clear positioning in the market, can quickly respond to its changes, and is able to provide new opportunities and services for customers quickly is always successful.
For example, the Fozzy Group company in Ukraine, in particular the Silpo supermarket chain, which has been systematically working with customer data for more than 15 years, involves more and more customers in the Vlasny Rakhunok loyalty program, which gives the company the opportunity not only to understand its customer and track trends in your network but also to efficiently manage promotional forecasts, prices, and assortment, thereby increasing customer loyalty.
In the future, retailers will use increasingly sophisticated technologies to track customer behavior. When retailers are able to link this data with information about a customer’s movements, such as their phone’s MAC address, it will be a significant breakthrough that they can use to improve the efficiency of their operations and customer loyalty.
Retailers who invest in understanding their customers, their behavior, and preferences will gain a competitive advantage in the future.
You also need to pay attention to logistics. Today there is a struggle for a buyer. If the marketing works well and the buyer comes to the store but does not find the product he came for, then the likelihood of a next purchase is minimized.
However, all activities will be idle if there is no end-to-end and transparent process for managing all processes of product distribution in retail, which influences increasing customer loyalty.
With the availability of a large array of data, we return to the fact that the successful retailers will be those who begin to invest in solutions based on AI, in the construction or rental of large data centers, where they will be able to quickly analyze a large array of data from different angles and make decisions. Decisions are based on numbers, not intuition.
- While we’re on the topic of technology, what solutions and technologies does C4R offer retailers to help them keep up with the times?
Pavel, founder and CEO of Atriny Group
At the start of our activities, we started with the simplest solutions that were necessary at that time for the operation of the retail business, such as planograms and warehouse management. As the company developed, we added more advanced solutions to our portfolio based on new technologies, in particular systems such as master data management, assortment management, orders, and forecasting.
Today, new approaches and innovative tools for managing assortment, planograms, and pricing are emerging, which we add to our portfolio, including tools for automatically creating planograms and managing prices using a large array of data through neural networks.
Today, we offer solutions that cover all aspects of supply chain management. These solutions are constantly being improved, and we are always exploring opportunities to add more innovative options to our product portfolio.
- How do you evaluate the effectiveness of the solutions that you offer to retailers?
Robert, CEO Consulting for Retail
Here, it is worth talking about the effectiveness of each solution. For example, the assortment management solution developed by our partners Num8erz, together with planograms and orders, provides quite high efficiency. Calculations that we carried out during implementation with one of our clients in Moldova showed an increase of 3% in turnover, despite the fact that some categories were cut by 30%.
We can also note the results from the implementation of voice technologies in the warehouse. Our client in Ukraine, with a warehouse of 35,000 m2, increased the speed of picking goods by 25% in pieces while reducing the number of errors by 35%.
Our solution, Freshto, has a direct impact on the environment’s benefits. We prevent any products from going to waste by acting before the expiration date, thereby reducing material waste. According to a study by the North American International Union of Food Science and Technology, if the global food system could stop wasting food, we would be able to reduce greenhouse gas emissions by around 8% to 10%.
But you shouldn’t relax and believe that high performance can be achieved solely through solutions and AI. When working with any solutions, be it AI-based solutions or traditional solutions, human labor should never be discounted. Any software solution is just a tool that helps improve the efficiency of employees, minimize errors that may occur during data analysis, and also allows staff to concentrate on other important things.
- How do you interact with retailers?
Pavel, founder and CEO of Atriny Group
We interact with our existing retail partners in three areas:
- We work together to implement solutions that help retailers achieve their goals and help us gain new knowledge and skills;
- We accompany our clients after implementation, which allows them to maximize the potential of the implemented solutions. As part of our support, we conduct analysis and make recommendations regarding changes in business processes and optimization of the use of information systems;
- If necessary, we modify the functionality of solutions in accordance with the individual needs of clients.
We also regularly invite our partners to various events, where they have the opportunity not only to listen to presentations from leading global retailers, and explore technological innovations but also to engage in discussions among themselves. They share how they utilize specific solutions, discuss the impact they have experienced, and exchange insights on avoiding potential pitfalls in projects, and so on.
Furthermore, we practice meetings with our partners where we discuss not only ongoing or future projects but also share the latest updates in the retail industry. We provide insights into new processes, innovations, and trends
Interaction with potential clients occurs through exhibitions and conferences, where we demonstrate where and what solutions we have implemented and what results we have achieved.
We also often use the so-called reference program, introducing potential clients to the experience of other companies that are already using our solutions. Thanks to this, they can get a first-hand understanding of our capabilities and make an informed decision about cooperation.
These conversations help us hear what value we bring, as well as learn more fully about the needs of our prospects.
- Are you currently investing in the development of your own products?
Pavel, founder, and CEO of Atriny Group
We began to think about our products several years ago when we began to identify new ideas and trends that at that time had not yet been covered or were covered by very expensive solutions. And we began to look for opportunities to implement our ideas.
The approach to selecting projects for development is quite simple: identifying insufficient coverage of processes in the Enterprise solutions with which we work, our team tries to expand them with additional tools.
Over the last 5 years, we have been investing in the creation of various types of products, subsequently separating them into separate areas. At the same time, we use both our own and attracted investments from the EU or venture funds.
- What are your plans for the development of the company in the coming years?
Robert, CEO Consulting for Retail
Since our number of internal areas and startups began to grow (these brands are C4R, Num8erz, Freshto, and SpecifyAI), it was decided to form a management company that will manage all these areas. Thus, the Atriny Group holding structure was born, which included all of the above companies.
Let’s talk about the prospects for the coming years. The plans include both internal tasks to reorganize processes caused by the creation of a holding structure and strategic goals to consolidate us as an integrator and player in the field of retail automation in Europe, as well as entering new markets in Europe and in the countries of Central Asia.
To achieve this, we have opened several new offices. Currently, we have representative offices in the USA, Poland, and Turkey. The focus of the next year will be on ensuring that we gain a foothold in each of these countries, building a local team that will perform the full cycle of tasks, from sales to customer support, after the implementation of our solutions.
- Can you share a success story of 2023?
Pavel, founder and CEO of Atriny Group
In 2023, we began operating in Poland and the USA. Also, we introduced products and services of our own development to the market:
- Freshto for monitoring product expiration dates,
- SpecifyAI for automatically creating planograms,
- new assortment management and clustering tool.
In addition, over these 2 years, we have been able to launch several projects in Moldova with our partner – the Linella company. The peculiarity of this cooperation was that most of the projects were launched remotely.
Despite the challenges, we were able to successfully execute these initiatives within the allocated budget and timeline while also attaining favorable financial outcomes.