Freshmart

Business case

Freshmart had been relying on Microsoft Dynamics GP and NCR Counterpoint POS to manage its business for a considerable period of time. However, despite utilizing these technologies to their fullest potential, the company realized that they were lacking the efficiency and flexibility required to meet their needs. One glaring issue was the need to employ fourteen full-time professionals to handle purchasing for all their stores, and they struggled with effectively balancing their stock supply and demand. Although Freshmart had implemented a set of best practices for perpetual inventory management, the technology they were using simply couldn't handle the intricacies of the operation.

Freshmart had ambitious goals, and to reach them they would need:

• Perpetual inventory for multiple locations, integrated to a robust purchasing and accounts payable system. Perpetual inventory management, which records transactions of stock received and sold in real time, is necessary for unified commerce strategies such as eCommerce and mobile purchasing.
• Automated replenishment and planning to ensure fresh inventory while avoiding overstocks.
• Real-time dashboards and accurate tracking of key performance Indicators (KPIs) to make timely decisions.
• Precise lot control and date management.
• Ability to run the POS and inventory on mobile devices.
• F&B functionality, including Kitchen Display Systems connected to the POS, recipe management and meal planning.
• A robust loyalty and customer management
• Pick up, delivery, drive-thru.
• Ability to integrate to third-party credit and ATM payment system with EBT.

The solution

Management at Freshmart decided it was time to move to a more advanced, end-to-end software solution. After a long evaluation, the company decided to move forward with LS Central, which extends Microsoft Dynamics 365 Business Central.

The solution was chosen primarily because it’s unified. In LS Central the POS, the retail and hospitality functionality and the ERP are all part of a single system, running in one database and with one system administrator. “This is the only true way that an organization can achieve real-time, precise perpetual inventory in all the stores and the central warehouse,” says Hector Negron, Managing Director at Optimus. LS Central is also unified across the channels, enabling companies to offer in-demand services such as pick-up, delivery, drive through, loyalty, eCommerce, etc.

The robust planning and replenishment functionality in LS Central, and the ability to capture data and run analytics in Power BI, sealed the deal.

Benefits

With LS Central, Freshmart can run a full-scale supermarket, plus deli/creamery, plus supplement/vitamin shop as one consistent brand. “LS Central is not simply unified across technology platforms, such as POS and ERP, but also across multiple industries in food and retail. This is unified commerce to the n^th degree,” says Jorge Machado, CEO at Freshmart.

Since implementing LS Central, Freshmart has seen multiple benefits to the business:

• 3-6 months ROI. Most of the savings were attributed to the effectiveness of the replenishment functionality in LS Central.
• 85% decrease in costs for purchasing. Freshmart used to require fourteen professionals to handle purchasing for all the stores. Today, they only need two full time employees. The chain could move the other four employees to different tasks, such as inventory control and other admin responsibilities.
• The right amount of stock, reducing excess inventory and stock-outs. The company has finally balanced supply and demand using replenishment alongside some formulas created by the Freshmart CEO.
• Lower safety stock levels. This means the company has more capital back in the company.
• Omni-channel sales and services. Freshmart now has perpetual inventory, which enables them to offer delivery, eCommerce, drive-thru and pick up.
• Decreased waste. Improved date control has led to less spoilage.
• Higher sales through personalization. Targeted promos and coupons, paired with delivery technologies such as social media and texting, have increased sales in the upper 20% of the clients.
• Optimized pricing in the restaurant and deli. “The LS Retail system helps us see the cost of each item per ingredient. Being an integrated system with one database, once the payables department enters an invoice, if there’s a change in the cost of one ingredient we can see how it affects the cost of the burger, and we can change or maintain the suggested retail price,” explains Machado. “The restaurant functionality of LS Retail is very strong,” he adds.

During the Covid-19 crisis, LS Central and Microsoft technology enabled Freshmart to be there for its customers, and keep serving them. The company used various methods, including texting of promos, drive-thru, pick-up and third party delivery (Give-me-a-Bite) to stay in touch with customers. The ability to stay open offering meal plans and food delivery during a time of need has led to higher revenue. It has helped strengthen the brand and grow its visibility.

All of these options wouldn’t have been possible with Freshmart’s previous technology. “A little over a year ago, all these seemed like a pipe dream, but now we can do it, easily,” says Machado.

In 2021, Freshmart launched Takabru, a new brand of beers brewed in their facilities. Takabru stands out from traditional breweries in many ways, starting with their location  – inside Freshmart supermarkets. The production tanks are behind windows, allowing customers to get a look inside the brewhouse.
Once they opened a Takabru account, customers get access to a selection of beers they can order and tap themselves. They  can also take a seat and enjoy some light dishes or tapas in the store's food court. Once again, LS Central has proven its flexibility, allowing the company to manage the diversity of its operations with just one solution. To operate their Takabru stores, the company uses the manufacturing functionality of Microsoft Dynamics 365 Business Central and the following features in LS Central:

• Mobile POS to take orders from guests right at the table
• A cashierless self-service tap wall guests can pour their own beer from
• Recipe management to track costs and quantity of ingredients on hand
• Replenishment to manage their inventory and check stock levels in real time

Freshmart is now planning to collaborate with other third parties, including delivery company Uber. They are exploring several valuable opportunities because finally, with LS Central, they can pursue their ambitious goals.In the future, Freshmart plans to:

• Implement Bookings for LS Central, the reservation and booking management add-on to LS Central. Freshmart conducts courses, including cooking classes. Using this add-on, which is part of LS Central, would make management of courses simpler, more efficient, and more unified.
• Strengthen their planning and analytics using Business Intelligence.
• Expand the brand to an international franchise. LS Central, a software solution available in multiple languages and localizations, can support the chain in this goal, and more to come.