Striking a balance
Getting the balance right across the business between product availability and waste, and between long and short-term goals, is no mean feat and that is before attempting to build the technologies required to deliver a total preventative solution. However, there is still a lot that can be done beforehand.
Data analysis can drive availability measurement, insight, and action to close gaps tactically and systemically. At the same time, it can be used to understand sales rates, stock-holding levels, and the impact of price movement to appropriately mark down product price to clear before it ends up in the bin.
As Waters explains, “When retailers mark product down, if at all, usually it is in simple increments: first by 25% then 50% and to clear at 75% off. Introducing the ability to apply an item-store specific, optimized price reduction can be done quickly, adapting the price reduction dependent on factors such as stock on hand, time of day, typical store sell-through...etc. This can happen without the need for heavy resource investment on the retailer side and the returns have proven to be huge in every market launched.
“But right now there is long-term value in prevention and short-term value in reduction, so in this time of disruption and margin pressure let us take as much benefit today so that we can fight on tomorrow.”
In the case of the continued retail challenge of balancing fresh product availability and waste, the ultimate aim would be to always have just enough availability with little-to-no retail waste. But this is a complex stakeholder challenge to consider with many competing objectives:
- On entering most grocery retail stores; the shopper is faced with walls of fresh produce. Their presentation, and their availability, typically sets the scene for the shopper’s experience of the store. If they cannot find what they want with the right date, will they turn and leave?
- When considering the retail operation, can this availability be provided at all costs? When everything is supplied in excess to guarantee availability, then do we expect the waste bill to rise too, when our research shows that it can already account for up to 4% of revenue?
- From a corporate stakeholder perspective, and from the view of society and the environment in general, are we considering our corporate social responsibility objectives? Are we making and disposing of too much?