My Desire For Sweet Visibility To Enhance The Retail Customer Experience

Adam Peanna

The past few weeks have been very hectic at home with my wife about to have our second child and our other little one demanding constant adventures to the park and other stimulating activities that a 2-year-old deserves.

Over the recent Easter break, I was looking forward to catching up with the extended family and distracting the little one, but first I needed to do some gift shopping for chocolate – which proved more challenging than I expected.

Generally I don’t leave holiday shopping until the last minute, but I thought with a week to go that there would be plenty of options in the supermarkets. This proved not quite to be the case; there was plenty of candy on the shelf, but several items on my list were sold out, with the shelf space empty and tags still in place. I made the short drive to another store, but found the same problem there and at another retailer in the same mall.

I pulled out my trusty smartphone and started to look up other supermarkets, but honestly it was not simple to find what I wanted. Some retailers provided no inventory visibility and others only wanted to show me the closest stores, which I knew were out of stock.

After some filtering, I found another store and headed there. To my surprise, they had lots of what I wanted; one staff member said they had so much of the items in stock that it would last to next Easter.

Inventory profit optimization

Balancing inventory of special-event stock is nothing new for retailers, and many have struggled with poor planning, overstocking, and mass discounting following the event. They have some of the most complex challenges, from the long planning horizon to day-to-day execution, and are stuck in the middle of consumers, vendors, and their own internal network when it comes to pulling the right levers to optimize profits across the business.

Before deciding which business levers to pull, they must consider all the possible impacts by using real-time Big Data from the point of sale (POS) and tools to interrogate and run scenarios to determine the optimal outcome. In the Easter candy scenario I saw, some stores had no stock while others were overstocked and trying to decide whether to discount locally, move stock, or wait and see. Thinking through how this scenario occurred illuminates lessons to be learned – were there forecast issues, allocation issues, lack of stock without fair sharing policies, or did some stores not realize the shelves had run dry for extended periods prior to restocking?

Supplier and manufacturers can also learn a lot based on their customers’ and competitors’ sales data. Many feed POS and market research data into their integrated business planning process. Their insights can hopefully lead to better collaboration, improved forecasting, and more flexibility to manage last minute demand.

Connecting the retailer to the consumer

As the consumer, my story ended well with the family happy with my choices. In my case, visibility was the cause of most of my frustrations. It would have been great to simply scan the shelf tag to determine whether there might be stock in the store’s warehouse; if so, that would automatically trigger a store associate to restock the shelf and send me a message when it’s complete. If there is no stock in the store, the shelf scan could deliver some insight on when the store’s stock would be replenished, suggest an alternate product, or maybe even offer to deliver it to my home at a small cost.

Of course, I could just shop earlier next year and hopefully avoid this scenario entirely.

For more on winning buyers’ appreciatation, see 5 Steps to Your Customer’s Heart with Emotionally Aware Computing.

Adam Peanna

About Adam Peanna

Adam Peanna is a Senior Extended Supply Chain Solution Specialist for SAP. He has over 20 years of supply chain experience covering both operational and technology roles across Integrated Business Planning and logistics execution including warehouse and transportation management. He has a deep background in supply chain problem solving including system and process implementations, team leadership and enterprise software. His current activities support the SAP extended supply chain strategy, leveraging the integrated SAP approach to supply chain and growing the successful network of SAP customers. Adam is also an active member with a number of supply chain community networks and completed studies to obtain a masters of supply chain management.