How Beverage Teams Can Improve On-Shelf Availability at Scale

Loss Potential

The potential for losses is particularly high at retailers relying on traditional promotional calendars and offers delivered through circulars or coupons that are not tightly synchronized with their inventory management. Fulfillment and customer service teams should work together to ensure they’re meeting their goals for sales and shopper satisfaction.

“If you have issues predicting demand, then every time you shape that demand through a promotion, your chances for an out-of-stock are greater,” said Accenture’s global beverages lead Maria Rey-Marston. “Everyday low prices lets me train the consumer so I have more stable demand behavior, which obviously makes it easier to manage the on-shelf availability.

“But the minute your key competitor does not follow that same strategy, you have to respond because there’s a competitive pressure.”

The last mile is often a focus of supply chain logistics, but Rey-Marston emphasized the importance of the last 10 feet — the distance between a store’s back room to the shelf. Failing there is the most expensive mistake since brands have already incurred the transportation and inventory costs but can still miss out on a sale. 

New technologies that link POS transactions to inventory management to trigger replenishment can help prevent those issues.

“In any inventory system, you do what we call reorder points that [show a] depletion rate during the day or during the week,” she said. “[There is] a trigger point that sends a replenishment order to the back room or the merchandiser” to tighten things up.   

Huffman said visual intelligence is also likely to play an increasing role in helping improve OSA.

“We are seeing new capabilities in digital signage being able to recognize through AI that there’s a person standing there and even being able to connect the dots of who that person is,” Huffman said. “I think that’s only going to increase as time goes on and become more critical to how people are marketing.”

Harapko acknowledges that privacy concerns can limit implementation, but he expects more stores will begin using computer vision as costs come down, including integrating data from smart displays and security footage to track shopper patterns. Some consumers have pushed back against smart coolers, which can make it hard to see what’s actually inside the display, but he expects companies will keep using the technology to get real-time information.

“I think the technology still needs to be ironed out, but my guess is we’re going to see evolution there, and that will be something that becomes more prevalent as we go forward,” he said.

Indeed, PepsiCo struggled to obtain timely competitive data from a number of its key retailers, including Costco and Aldi, according to retail technology provider Storesight. Without visibility into assortment changes or pricing fluctuations, PepsiCo’s category management teams had to piece together information through manual store visits. The slow and inconsistent process unsurprisingly made it even harder to understand shifting market dynamics or explain sales declines.

The beverage company has improved performance through shelf intelligence that includes enhanced reporting on assortment and pricing trends across beverages and snacks, as well as dashboards tailored for specific retailers, per Storesight. This real-time visibility in turn sharpened its view of competitor strategies, reduced reliance on manual audits, and provided leadership with actionable insights.