Family Dollar Implements AI Tech for Category Management, Merchandising

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Dive Brief:

• Family Dollar announced Monday it has tapped Dunnhumby’s AI platform for category management and merchandising collaboration across its store fleet.
• The platform aims to help the discounter localize its product assortment and gather insights on customer behavior.
• The partnership comes as Family Dollar’s same-store sales recently slipped, with “weak” demand from its low-income customer base lasting several quarters, parent company Dollar Tree reported in an earnings call last week.

Dive Insight:

Family Dollar’s platform powered by Dunnhumby consists of two AI-driven platforms: Dunnhumby Assortment, launched earlier this summer, and Dunnhumby Shop. The former will provide predictive analytics to determine which products should be in which stores, while the latter provides insights to consumer shopping behavior and determines category trends, according to the press release.

“With our new category and merchandising platform powered by Dunnhumby, we can tailor and fine tune our assortments to local purchasing preferences, to ensure we provide our customers with the products they need at each of our stores,” Larry Gatta, chief merchandising officer for Family Dollar, said in a statement.

The platform will operate across Family Dollar’s entire store network, which consists of more than 66 million shoppers, and aims to help the discounter’s teams make “faster, smarter, and more customer-centric decisions,” the announcement noted.

As Family Dollar struggles to improve sales among its core low-income customer base, the newly implemented AI technology could help the discount banner provide a sharper assortment and gather valuable data.

According to Dunnhumby’s Consumer Trends Tracker released in November 2023, consumers are hopeful AI can help them save when shopping for groceries, manage their budgets and enable retailers to provide personalized rewards and suggestions.