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01/06/2022

Rite Aid aims for end-to-end supply chain visibility

Dan Berthiaume
Senior Editor, Technology
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Rite Aid is unifying supply chain and category management.

Rite Aid Corp. is bringing together space planning, store and distribution center forecasting, and replenishment planning within a single, centralized solution.

The retail pharmacy chain is expanding its rollout of artificial intelligence (AI)-based ERP technology from Relex Solutions. After launching Relex’s end-to-end forecasting and replenishment solution in early 2021, Rite Aid will roll out Relex space and floor planning tools, as well as space-aware replenishment, for more than 2,400 stores across the country.

As a result, Rite Aid intends to automate and streamline back-end processes while gaining end-to-end visibility into its multi-echelon supply chain. The retailer is enhancing its assortment visualization, targeting and planning capabilities following a comprehensive initiative to enhance its customer experience it launched in August 2021.

Rite Aid is partnering with customer data science company dunnhumby to revamp its price, promotion and loyalty programs. Rite Aid and dunnhumby are utilizing customer data models and consumer-led insights to optimize these investments to improve customer value perception digitally and at more than 2,500 stores in 17 states. 

As part of the initiative, Rite Aid’s loyalty program will be completely reimagined to deliver improved value for customers. The retailer is overhauling its capability to forecast, allocate, price and promote inventory as it is reporting mixed financial results and implementing a store closure program to reduce costs and drive profitability.

In the first phase of the program, which began in November 2021, the company is closing 63 stores. Rite Aid said it will continue to review stores expects additional closures during the next several months.

Rite Aid’s net loss for its most recent fiscal quarter totaled $36.1 million, compared to net income of $4.3 million. Revenue rose 1.8% to $6.23 billion. The increase was driven by growth at the retail pharmacy segment, which was partially offset by a decline at the pharmacy services segment. Same-store sales rose 4.4%, with a 5.9% increase in pharmacy sales and a 0.4% increase in front-end sales.

“Expanding our partnership with Relex is crucial to our merchandising transformation and journey to become a destination for whole health,” said Erik Keptner, chief merchandising & marketing officer, Rite Aid. “Creating a holistic, unified approach to supply chain and category management optimization will allow us to build a foundation for customer-centric assortment, enable greater speed and efficiency, and provide better assortment visualization and communication for our field and operations teams - ultimately improving our customer experience.”

“We are excited to expand the partnership and provide a truly unified solution to Rite Aid,” said Frank Lord, chief revenue officer at Relex. “They are moving to a fully unified forecasting and replenishment system, coupled with the benefits of space planning.”

“Relex’s rich supply chain data will help enhance the customer experience by enabling accurate allocations, improved promotional forecasting, and highly localized space optimization for each product in Rite Aid’s assortment,” said Carlos Victoria, Relex senior VP of sales, Americas. “We’re excited to demonstrate how unifying their processes will reduce silos, increase efficiencies, and improve outcomes across their business.”

Rite Aid operates over 2,400 stores across 17 states.