To reduce food waste in the in the GDO channel the Israeli start-up company Wasteless - supported by the European Institute of Innovation & Technology (EIT) - has developed a smart algorithm that allows the application of dynamic pricing markdowns based on expiry dates.
The algorithm knows all the products on the shelves, including their expiry date and can predict whether or not it is likely that the product will get sold. Using these insights, it then calculates the most competitive price point for both consumers and the retailer. To evaluate and further improve the system, Wasteless uses reinforcement learning.
This means that each time the algorithm decides a new price point, it will afterwards evaluate whether it was a correct analysis or if it should do it differently next time. The algorithm can look at complementary products (parmesan and pasta, for example) to make the discount even more interesting.
The products have a data enabled barcode, which allows the supermarket to acquire data on the increased sales rate of products at those discounts. They can also add rewards or product information for consumers who buy sustainably.
Source: AIPIA
