Viewpoints

Twitter Is Nice, but Don't Forget About Inventory

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My year as a business/technology journalist officially kicks off at the National Retail Federation's Annual Convention & Expo, held each January at the Jacob K. Javits Convention Center, a short distance from SN's Manhattan offices.

The convention, which took place last week, offers an opportunity to learn where retailing — not just food retailing but the industry as a whole — has been and where it's probably headed in the coming year. Of course, if you've ever attended it, you know that the NRF show comprises a staggering array of exhibits — 475 in all — and dozens of educational sessions, and no mere mortal can take it all in. So I will focus on the technology area, at least the part that I had time to survey.

First it must be noted that the mood among retailers and exhibitors was more sanguine this year than last, buoyed by decent holiday results, and a robust attendance of 18,500 (including 27% more retailers than at last year' show).

Inevitably, there was plenty of buzz at the show focused on the new ways retailers are engaging consumers, such as social media, mobile marketing and other digital/Web-based programs. But I was also struck by the emphasis on a more traditional retail obsession — inventory control, particularly replenishment and out-of-stock prevention. For all the glamour of new iPhone apps and Twitter blasts, there was much discussion about how IT can help keep store shelves and displays stocked through such means as automated replenishment and fresh item management.

For example, in his NRF presentation, Sir Terry Leahy, chief executive at U.K.-based Tesco, remarked that by “tweaking how we ordered and replenished product,” the retailer was able to cut its out-of-stock rates from 8% to 2%. For customers, this resulted in “a step-change in satisfaction,” he said. Tesco brought this same internally developed continuous replenishment system to its U.S. Fresh & Easy stores, according to U.K. firm Micro Focus.

In another presentation, Clinton Keay, senior vice president and chief information officer for Canadian food retailer Sobeys, described how its fresh item management system from Invatron, which tracks perishables shrink, plans production and orders products, has helped the company achieve better in-stock position, improve sales and margins, and reduce shrink in perishables departments.

It also turned out that many of the vendors whose booths I visited featured technology designed for forecasting and replenishment, out-of-stock prevention, shrink reduction or some other kind of inventory control, including Teradata, SAF, SAP, Reflexis, Evolution Robotics, Retalix, Quantum Retail, Aldata Solution, Galleria and Afterbot.

So while retailers should by all means embrace all the new media opportunities to reach consumers, they should also take advantage of the systems that make sure there's enough inventory to sell to those consumers.

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Contributors

Julie Gallagher

Julie Gallagher’s delicious foray into coverage of the food industry was purely accidental. With a background in technology, she joined Supermarket News as associate editor of its Technology...

Mark Hamstra

Mark Hamstra is the editor of the Retail/Financial section of Supermarket News covering mergers and acquisitions, quarterly earnings reports, executive changes and other significant events and trends...
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