Asda is extending its partnership with operations software provider Retail Insight by rolling out its ‘InventoryInsight’ solution to improve on-shelf availability.
With its significant store footprint and huge number of SKUs, Asda has felt the impact of inaccurate inventory and wanted to improve stock accuracy across its store network.
Inventory inaccuracy is a perennial challenge for grocery retailers, with data from ECR Retail Loss suggesting that 60% of all inventory records are incorrect. Discrepancies between stock records and what inventory is actually available can cause phantom or shadow inventory, a major driver of inefficiencies, lost sales and falling margins. Whether it’s theft, poor process compliance or mis-scanned items, the causes for inventory inaccuracy are varied and complex. However, its impact is far-reaching; recent analysis suggests it causes up to 80% of out-of-stocks – a key cause of lost sales – if left unchecked.
Retail Insight has been supporting Asda’s in-store operations since 2009, leveraging its suite of data-led solutions to improve replenishment and availability. Seeking a scalable solution, Asda partnered with Retail Insight to tackle phantom inventory, conducting a pilot in July 2023. This drew foundational store data from across Asda’s estate, which enabled fast implementation by leveraging the same data sets and combined it with Retail Insight’s latest cognitive technology solution, InventoryInsight.
InventoryInsight is a Machine Learning-driven software that identifies and corrects inaccurate retailer inventory records to drive store performance. Using a blend of AI and Machine Learning algorithms, and human subject matter expertise, InventoryInsight trained a data model for each of Asda’s stores, leveraging sales and inventory data to detect instances of phantom inventory. It then alerts store staff to manually validate the stock at the shelf-edge and update the inventory file to help drive total store performance, correcting inventory accuracy, and improving product availability and sales.
In just nine months since deploying InventoryInsight, Retail Insight has removed over 1.6 million units of phantom inventory from Asda’s store estate, delivering a 63x return on investment to the retailer. Following the pilot, Asda will now conduct a full rollout of InventoryInsight across its store network.
Neil Fairclough, senior director of retail transformation at Asda, commented: “The ability to accurately identify phantom inventory across our estate is a huge advantage for our business, and goes a long way in enabling us to deliver a better in-store experience for our shoppers. Given the impressive results we received at trial, we were excited to conduct a full rollout of the InventoryInsight solution. We have not been disappointed by that decision with metrics that have exceeded our expectations.”
Wesley Mellor, customer success manager at Retail Insight, commented: “All retailers have a problem with phantom inventory, and the majority are looking to find a solution for dealing with it in an efficient and scalable way. Our solution was a perfect fit and we could draw on our extensive experience of Asda’s in-store operations. It’s been fantastic to work with the Asda team to deliver this project, with some fantastic results.”
Looking ahead, Retail Insight said it will continue to work with Asda to further refine its solution, including building automation enhancements into its inventory record to drive enhanced performance.
NAM Implications:
- Inventory inaccuracy causes up to 80% of out-of-stocks.
- More importantly, ‘curing the problem’ by increasing buffer stocks to minimise OOS…
- …(and carrying the additional financing costs) dilutes the bottom line.
- Using a blend of AI and machine Learning algorithms, and human subject matter expertise, is an obvious answer…
- …which will hopefully minimise the problem for Asda.
