Magnit Launches Platform to Keep Track of Marked Products

The new internal information system will contain a library of information about millions of marking codes for corresponding products sold in the Chain’s stores across 65 regions of Russia. The Company is currently configuring its business processes and back-end assets in order to start using the platform.

Krasnodar, May 22, 2020: Due to the introduction of mandatory marking for certain product groups, Magnit is creating an information system that will contain data on all product categories falling within the scope of the corresponding Decree of the Government of the Russian Federation. This will allow the Company to promptly confirm authenticity of product marking codes and avoid slowing down checkout service speeds. The Chain announced development of the service during the PRO Marking conference organized by the Advanced Technologies Development Center (CRPT), which operates the national marking system.

Magnit plans to start processing all information about such products received at its distribution centers and sold at its stores through the system on July 1, 2020, and estimates that it would complete all final adjustments to the platform in October.

As of July 1, 2020, Russian retailers will only be allowed to sell footwear and tobacco products if they bear the marking. For perfumes, mandatory marking will be introduced on October 1, 2020. As of January 1, it will become illegal to sell a number of light industry products if unmarked, and on January 20, mandatory marking will be implemented for some types of dairy products.

Magnit is the largest retail chain in the country in terms of the number of stores, and works with thousands of nationwide and regional suppliers. The Company is the only retailer to work with the majority of marked items, and plans to test the entire range of products for all operations in the Chestny ZNAK system, including issuance and application of codes, introduction of products into circulation, tracking of product movements with transfer and acceptance under the electronic document flow system, and sale via online checkouts.

The Chain has already tested marking of tobacco and footwear together with its suppliers. As of today, the Company’s stores have sold more than 156 million marked packets of cigarettes. Magnit expects that searching for the best solutions for introduction of marking will help manufacturers and chains integrate the system into their business processes in the most flexible manner possible and minimize the launch costs. As for customers, they can be sure that products they buy are one hundred percent legal and have passed through all stages of inspection: with the CHESTNY ZNAK app, they can scan the marking code on the package to get accurate information about the product.

Currently, there are some unresolved technical issues that Magnit plans to tackle during testing. At the same time, the Company points out that there are positive aspects that it can already integrate into its sales technologies.

“One of them is using the marking code during “one-scan” checkout, which can reduce the service time for our customers. The marking code includes additional critical business information that we can use, such as the maximum retail price for control at the checkout or shelf lives for monitoring of sold products. Moreover, we expect the marking system will continue to develop and create additional business value for responsible market participants,” — said Yana Nizamidi, Projects Manager at Magnit’s Directorate for Supply Chain Strategic Development.

“First of all, I would like to mention the benefits of working with marked products. Firstly, it is the introduction of the electronic document flow system and the shift away from paper media, which in turn drives business automation. At the same time, the electronic document flow allows optimizing logistics and warehouse management processes and makes the entire product movement chain transparent for both the Chain and
its suppliers,” — says Ekaterina Polyakova, IT Projects Manager at Magnit Retail Chain.