The Analyst Viewpoint
Retail Solutions was among the first to recognize the power of applying sophisticated analytics to retailer data such as POS, supply chain, merchandiser feedback, and EPC data through an extensive set of software-as-a-service (SaaS) applications.
-Simon Ellis, Manufacturing Insights, 'Retail Solutions' Growth Mirrors Critical Consumer-Centricity Efforts for Manufacturers'
Supply Chain Solutions
Shrink and Unsaleables
According to the global retail theft barometer, shrink is estimated at 1.58% of sales in the traditional grocery/large supermarket segment in North America. Meanwhile, according to the GMA 2008 Joint Industry Unsaleables Report, unsaleables rates range from 0.4 percent to 2.64 percent and average 0.83 percent of gross sales at manufacturers. Retailers' and distributors' unsaleables rates range from 0.24 percent to 2.78 percent and average 1.21 percent of gross sales.
Each of these issues is a direct hit on the bottom line, and cannot be solved by looking at average figures across a retailer or across products. Each store, each item may require a different approach, jointly implemented by the retailer and the manufacturer.
As planograms and assortment change more and more often, the lack of collaboration both in regular business and in new product introductions is as critical to solve this issue as product delivery, handling and rotation practices. Retail Solutions customers leverage downstream data to monitor shrink and unsaleables in near-real time down to the store-SKU level, determine the root cause of reclaim and identify potential issues before they start hurting the bottom line. Some of Retail Solutions use cases for shrink and unsaleables include:
- Shrink and unsaleables monitoring minimization
- Unsaleables root cause identification
Retail Solutions customers accurately identify the most critical areas to focus on for shrink and unsaleables, monitor the effect of their mitigation initiatives and regain the associated lost sales and margin.
- Monitor the stores and products which hurt your bottom line most - rather than managing averages
- Measure effects of shrink preventions measures (such as lock cabinets) in real-time to best understand the optimal trade-off between sales velocity and shrink-related losses
- Identify the addressable root causes of spikes in unsaleables (price, promotions, discontinuations, replenishment practices, supply chain handling practices...)
- Understand the complete supply chain dwell time to optimize the number of days of code life in the store rather than in the DC
Retail Solutions enables CPG companies to get a firm handle on their shrink and unsaleables situation in a user-friendly, powerful and intuitive solution.
- Provides a logical decision making framework to make shrink and unsaleables situations easier to analyze and help focus on the most appropriate mitigation initiatives
- Links sales, inventory and unsaleables data to give a complete picture in near-real time and at the most granular level to help flag potential upcoming issues or extraordinary situations before they hurt your bottom line
- Identifies the root cause of unsaleables to ensure you can fix the causes rather than the manifestations