The retail shelf is at the center of the omni-channel explosion. Stockouts, poor visibility and inaccurate inventory systems have been the industry norm for decades. Now, all of sudden, with the addition of online shoppers, five or six different parties can all be vying at the same time for that single item left on the shelf. The result is sky-high substitution rates (up to 30% or more) as consumers buy online to pick up at the curb or to have delivered to their home.
Pensa is on the frontline in helping to solve the omni-channel shopping problem.
We’ve all experienced the frustration first-hand as a consumer. You go online to buy groceries and pick what you want to buy and have delivered. Then you wait to see what you actually receive when the bags arrive on your doorstep. You get some of what you ordered, some of what you didn’t, and sometimes a potluck change in what was delivered as a substitution (you know – the corn syrup instead of corn starch).
This story plays out every day, with nearly all grocery retailers. It results in unhappy customers, frazzled field workers and perplexed consumer brand manufacturers studying shopper preferences.
The pandemic has only added to the age-old stockout and in-store visibility problem, with unexpected spikes in demand and shocks to supply chains driving stockouts to unprecedented levels,2. Growth of omni-channel shopping – both in-store and online via ecommerce applications – puts added stress on already inaccurate retailer inventory and supply chain systems.
Pensa’s accurate, real-time shelf data and analytics provide retailers and consumer brands with a single source of truth about what is actually on the shelf, minimizing surprise basket substitutions for the consumer and distorted views of shopper preferences caused by unavailable choices and substitutions. Using automated computer vision and artificial intelligence, Pensa monitors the grocery shelf continuously for stockouts, near-stockouts, and misplacements of products within the store. We can see not just the substitutions that actually occur, but the problems waiting to happen where things are offered for sale but not available.
Online is, in a sense, the new retail shelf. Buying online for delivery or pickup of groceries from a nearby storefront has nearly doubled as a result of the pandemic, accelerating what was already a natural transformation to omnichannel shopping patterns across retail. Battles for market share will be won and lost by how well the industry can tighten its grip on in-store availability. Not only for the consumer coming into the store to shop, but for what is offered to them online and grabbed in the store by others.
As e-commerce and omni-channel continue to surge in popularity, it’s time we get a handle on the problem. On-shelf availability is shopper ground zero – online and off.
1 The Spotlight on “The Trillion-Dollar Black Hole” of On-Shelf Availability, Alvarez & Marsal.
2 Taking Stock of Out-of-Stock, Tom Gruen.