Can technology solve out of stocks, on shelf availability?
A look at a company that is using technology to solve out of stocks affordably
Technology has been the single strongest force changing the face of grocery retailing for more than 125 years.
Since James Ritty introduced the first cash register in Dayton Ohio in 1879, retailers and consumer goods suppliers have been looking to technology to address their most pressing opportunities.
From simple devices then that evolved to the point of sale and ordering systems of today, technology has impacted retail like no other force.
In his landmark trilogy: Future Shock, Third Wave and Power Shift, Alvin Toffler examined the impact technology has had and would have on our lives and businesses.
Toffler specifically discussed the impact of bar codes that enabled retailers to gain customer and product information never before available. This resulted in the power shift from traditional approaches of suppliers telling retailers how to best stock their shelves to retailers telling suppliers what was actually selling best and what they should be ordering.
The face of retailing changed forever and gave rise to increased partnering between retailers and suppliers.
When retailers and suppliers share accurate data to form the basis of their decision-making everyone benefits, especially consumers.
With consistently in-stock on the store shelf, retailers and suppliers see higher sales profits and most importantly more satisfied customers.
On the other hand, if the items customers are demanding are not consistently available on the shelf ,the consumer’s loyalty to that retailer and the brand will certainly be eroded.
For years retailers have relied on elaborate POS, planograms, audits and delivery systems to meet the challenge to provide on shelf availability.
Unfortunately industry numbers in this operational performance category have not changed, with best in class reaching only 8% out of stock (OOS) and poor performers as high as 28% OOS.
To put this in perspective, there is approximately a one in 10 chance that your customer will not find what they want (best case) and in the worse case it is a one in four chance, but, once again retailers can turn this around with new technology.
Soft goods retailers are beginning to see real benefits from radio frequency identification (RFID). Dozens of well-established retailers such as Walmart are now dramatically improving in stock positions and improving in stock positions.
Even if we could get manufacturers to source tag these items, there is no guarantee you could read it through the metal and liquid contents with the current ubiquitous RFID technology. Physics is still physics after all.
I have discovered a company that has taken the challenge of affordably solving out of stocks and on shelf availability for mass retailers in a totally unique way that has been totally proven in the real-world.
NeWave Sensor Solutions was formed to bring cost effective on shelf availability solutions to mass market retail shelves. They started by trying to fix low item-level read rates of RFID tags for mass merchants like Walmart on common metal shelves.
Today NeWave has a proven on shelf, no tags required solution, which provides instantaneous alerts when an item is in a low stock position. NeWave’s Smart Shelf monitors item level movement at the shelf in real-time, integrates wirelessly with CCTV to capture alerts on video, and sends an in store message in seconds to who needs to know.
Smart Shelf can alert the retailer when a customer may be struggling with a purchase decision or a potential theft is occurring at the shelf, all without having to tag any of the items.
If this sounds too good to be true consider this: a large U.S. grocery chain installed three of these Smart Shelf devices in their energy drinks section and the results their in stock position increased by 65% and out of stock duration was reduced by 68% . The chain went on to order 50 more units that are currently being installed. Several other leading mass retailers are doing the same.
With more and more online purchases of commodities and the blurring of retail boundaries (who would have thought you’d be buying milk at the drugstore?), grocery retailers need to meet the demands of a growing technically sophisticated group of customers. These customers are accustomed to demanding what they want, when they want it and from a source that can consistently meet their demands.
Today it is not good enough to offer selection, price, and service. Retailers need to have what customers want, when they want, on the shelf. NeWave’s Smart Shelf may just be one technology that’s meeting that challenge.