How can Independent store owners in the US leverage technology and grocex to beat competition
In the market independently owned and operated stores experience higher out-of-stock situations due to the unavailability of enough financial help to produce solutions. This adversely affects their sales as the customers postpone purchases or worse switch stores. With the rising interest and demand of technology in every sector, it is high time for independent store owners to use them.
Problems and implications:
Retailers are caught in a difficult period where business rate, rents, and import costs are increasing, while their sales are decreasing in an out-of-stock situation. The main problems leading to out-of-stock situations for small, independent retailers are similar to the ones faced by large ones.
1. Data accuracy: Data accuracy must be addressed first, as it is the foundation for ordering and forecasting. Between shipment variances, misplaced products, returns, and stolen goods, retailers often find that the inventory numbers they have on paper (or on screen) often don’t match what they have in their stores. Such discrepancies can lead to merchants mistakenly thinking that they have an item in stock when they don’t, so they end up re-ordering the wrong products or quantities. This has a much worse effect when the retailer is independent and has no way to get back the money.
2. Measurement: Manual audits and perpetual inventory measurement of OOS levels are inaccurate, do not focus on the lost sales associated with an OOS item and do not adequately point to solutions. The level of PI inaccuracy in many stores is estimated to be, as PI accuracy (where the PI exactly matched the on-hands) ranged from 32 percent to 45 percent.
3. Shelf merchandising: Shelf merchandising issues continue to be a major contributor to OOS. First, most OOS sales losses are due to a relatively small number of items. Few of these items have adequate shelf space relative to their demand. Analysis point that 91 percent of the retailers' SKUs are allocated shelf space based on case pack-out and 86 percent of the inventory on the shelf is in excess of 7 day’s supply.
The problem that differentiates them from big retainers is the availability of substitutes. Independent shop owners don’t generally sell competing products due to financial issues. Therefore, unlike larger retailers, independent shop owners have to manage with the resources they have. To place an order for more stocks would take more time.
In the recent times, technology has come to help the world in various problems. The out-of-stock impact could be mitigated for small independent store owners by using cost-effective AI and machine learning solutions.
1. Products such as NextOrbit use data sciences driven recommendations to predict and mitigate OOS. They have cost-effective monthly subscriptions depending on the number of SKUs and stores. They don’t require long-term contracts.
2. Better out of stock measurement techniques should be implemented such as Instrumenting Store Shelves (“Smart” shelves) that are instrumented to feel the number of products remaining on the shelf. These shelves provide accurate and by the minute understanding of Out of Stock. This allows for action in real-time. An algorithmic analysis of the store could also prove quite helpful in finding out the rate and numbers of out of stocks.
3. Most of the big players focus on satisfying a generalized version of people. AI-based solutions that satisfy individuals during in-store shopping would be more profitable than one online for independent stores.
4. The location of a brick-mortar store is crucial for its sales. Set up shops where demand is high but stores are less.