ECR Retail Loss

Enabling the Retail Sector to Sell More and Lose Less

Seven ways to engage your Store Associates in the fight against food waste

In our September 2024 meeting of the food waste working group we reflected on the question as to how to engage store associates in the fight against food waste. Here were the key insights and takeaways for retailers on how to win the hearts, minds, and trust of associates in the war against food waste: 1. Education and Awareness Training Programmes: Develop comprehensive training programs that educate associates on the impact of food waste on the environment, the community, and the business. Use engaging formats like animations, videos, and gamification to make the training interactive and memorable. Certification Programs: Implement certification programs that recognise associates' efforts and knowledge in reducing food waste. This can boost morale and create a sense of achievement. 2. Emotional Engagement Storytelling: Share powerful stories that highlight the real-world impact of food waste reduction. Use testimonials from associates who have personal experiences with food insecurity to create an emotional connection. Community Impact: Emphasize how associates' actions contribute to the well-being of their local communities. Highlight the positive outcomes of food donation programs and sustainability initiatives. 3. Clear Communication Transparency: Provide clear and consistent communication about the company's goals, initiatives, and progress in reducing food waste. Use various channels like intranet, newsletters, and in-store posters to keep associates informed. Feedback Mechanisms: Create opportunities for associates to share their ideas and feedback. Regularly update them on how their suggestions are being implemented. 4. Recognition and Rewards Competitions and Challenges: Organize internal competitions to motivate stores and associates to excel in food waste reduction. Recognise top performers and celebrate their achievements. Awards and Recognition: Implement awards and recognition programs to acknowledge associates' contributions. This can include certificates, public recognition, and tangible rewards. 5. Practical Tools and Resources Standard Operating Procedures (SOPs): Provide detailed SOPs that outline the steps associates need to take to reduce food waste. Ensure these procedures are easy to understand and follow. Data Tracking: Use data tracking tools to monitor food waste metrics at the store level. Share these metrics with associates to create a sense of accountability and competition. 6. Collaboration and Partnerships Engage with NGOs and Food Banks: Strengthen partnerships with local NGOs and food banks. Facilitate visits to these organizations to help associates understand the impact of their efforts. Cross-Department Collaboration: Encourage collaboration between different departments to create a unified approach to food waste reduction. 7. Continuous Improvement Regular Training Updates: Refresh training content regularly to keep it relevant and engaging. Incorporate new insights and best practices. Innovation and Adaptation: Stay open to new ideas and innovative approaches. Adapt communication and engagement strategies based on feedback and changing circumstances. By focusing on these areas, retailers can effectively engage their associates in the fight against food waste, fostering a culture of sustainability and community support.

OSA: How are CPG's helping Retailers Reduce Shelf Out of Stocks?

Our 2025 discussion on how Consumer Packaged Goods (CPG) companies are supporting retailers in improving On-Shelf Availability (OSA) provided several key insights and actionable takeaways for both industries. Below are the critical points: 1. The Importance of OSA and Its Strategic Role OSA is vital because if products are not available on shelves, retailers cannot sell them, impacting revenue and customer satisfaction. The global CPG business that kicked off the meeting places execution at the heart of its framework, recognizing that availability is responsible for 50% of in-store opportunities. The industry is moving from manual to automated OSA measurement, improving accuracy, efficiency, and actionability. 2. Transition from Manual to Automated Measurement Traditional manual measurement methods such as image recognition and physical audits are limited, as they only capture availability at specific points in time. Automated measurement leveraging EPoS (Electronic Point of Sale) data allows real-time visibility and deeper analytics into root causes of OSA issues. The shift enables retailers and CPGs to analyze OSA trends continuously, providing a more accurate and holistic view of stock availability. 3. Leveraging Data for Better OSA Management EPoS data is a game-changer for OSA measurement, helping track out-of-stock patterns across multiple stores, categories, and SKUs. Challenges in data sharing: Some retailers are resistant to sharing data due to privacy concerns or competitive sensitivities. The availability of inventory data is still limited, making it harder to track real-time stock movement. The CPG presenter reported less than 50% availability by retailers of EPoS data, showing the need for further collaboration. Latin America leads in data sharing, particularly in Brazil, where regional retailers are more open to collaboration with CPGs. 4. Regional Differences and Best Practices Brazil’s success story: With over 300 retail customers and a fragmented market, this CPG's operation in Brazil successfully negotiated joint business plans (JBPs) to improve OSA. Colombia’s collaborative model: The Logyca initiative has created a non-profit industry-wide collaboration between CPGs and retailers, leading to: A shared goal to reduce out-of-stock by 3% by 2027. Joint root cause analysis and structured action plans. Monthly benchmarking reports, enabling retailers and suppliers to compare performance. 5. Key Questions for Retailers and CPGs For CPGs: Do you build dedicated OSA teams? Identifying "OSA Champions" within organizations can drive strategies forward. How do you leverage AI and automation? Advanced algorithms can help predict out-of-stocks before they occur. How can you strengthen cross-functional collaboration? OSA is not just a supply chain issue—it involves customer teams, sales, execution, and data analytics. Does it make sense to prioritise key stores and SKUs? 20-25% of stores typically drive 65-70% of OSA issues—focusing on these can yield significant improvements. How do you incentivise field teams? Implement training and rewards for sales and merchandising teams to ensure they focus on improving OSA metrics. For Retailers: Should our business enhance data-sharing partnerships with CPGs?: Retailers benefit when suppliers have access to better OSA insights. Should we consider AI and IoT solutions? Emerging technologies like electronic shelf labels, shelf cameras, and predictive analytics can further improve OSA. How do we align promotions with supply capabilities? Promotional events often trigger OSA failures, so better forecasting and planning with CPGs are crucial. How can we invest more in store associate training? Ensuring store associates are well-equipped to manage replenishment and track inventory accurately. 6. The Future of OSA – Moving from Good to Great The next frontier in OSA management includes: AI-powered forecasting models (e.g., Colombia’s Logica pilot using algorithms to enhance demand planning). Improved collaboration models—learning from Latin America's success in joint industry efforts. Better use of automation to integrate multiple data sources (e.g., warehouse, store-level inventory, and real-time shelf insights). Final Thoughts Retailers and CPGs could being to treat OSA as a joint responsibility and..... Invest in data-driven solutions for real-time tracking. Collaborate strategically to improve shelf execution. Integrate AI and predictive analytics into their planning processes. Adapt best practices from high-performing regions (e.g., Latin America’s success in data-sharing). Ultimately, improved OSA benefits both retailers (higher sales) and CPGs (better brand visibility and loyalty), should make it a win-win strategy for the industry.

Prompted Markdowns - How to Cut # of Date Checks by 85%

Retailers have been increasingly adopting prompted markdown systems to optimise pricing strategies for near-expiry products while enhancing operational efficiency. Our recent discussion with retail leaders highlight how technology-driven markdown solutions have transformed store processes, improved financial margins, and minimised waste. The Key Insights from Retailers on Prompted Markdowns Operational Efficiency and Time Savings: Prompted markdowns significantly reduce the time required for markdown processes. Retailers in the meeting reported an 85% reduction in the number of product checks compared to manual methods. By integrating automated systems, stores now check only 5% of their total stock daily instead of scanning all products manually. The introduction of real-time, digital audits eliminated the need for paper-based compliance checks, with one retailer reporting a savings of 58,000 sheets of paper annually. Data-Driven Decision-Making: Many retailers leverage AI-driven markdown algorithms to adjust discounts dynamically based on product demand, store location, and competitor pricing. Many retailers highlighted the importance of integrating markdown data with ERP and inventory management systems for seamless execution. Real-time analytics help retailers forecast demand and adjust replenishment decisions to prevent surplus food that lead to excessive need for markdown work. Waste Reduction and Sustainability: Several retailers, reported reduced food waste by approximately 29% by optimising markdown timing and pricing. AI-powered markdown tools optimise discounts to ensure better sell-through rates. For example, a retailer moved from flat 50% markdowns to a variable markdown model (20%-40%) based on sales patterns. Collaborations with food waste reduction platforms like "Too Good To Go" also help to ensure that surplus food is repurposed instead of thrown / wasted. Improved Customer Experience: Customers benefit from a more structured markdown system where all discounted products are placed in a dedicated area, preventing disruption in regular shopping zones. retailers report that their shoppers are now actively seek markdown zones, this is helping retailers drive higher sell-through rates while reducing the cannibilisation of full price / margin sales. Technology and Automation Enhancements: Many retailers have moved from manual markdowns to mobile-based systems with handheld scanners or integrated PDA devices. Retailers have also introduced electronic shelf labels (ESLs) to make markdown tracking more efficient, even incorporating flashing LED signals to highlight to stores associates the items that need a discount applied. Challenges and Considerations: Retailers faced challenges in product mismanagement when customers moved marked-down items to different shelves. Some retailers had to adjust markdown placement strategies to ensure seamless customer navigation and prevent confusion. Ensuring compliance and proper execution required dedicated store teams to oversee markdown strategies and prevent errors. Key Questions for Retailers: Do you invest in AI-driven markdown solutions to optimise discount rates dynamically and improve sell-through rates? Should you integrate markdowns with existing stock and sales data for real-time inventory tracking? Is it now the right time to move towards digital audits and paperless compliance to improve sustainability and efficiency? Should you consider and establish a dedicated separate markdown section to enhance customer experience, increase sales, reduce the risk of lost margin and minimise misplaced markdown items? How do you organise your business to constantly monitor markdown trends and customer behaviour to refine discounting strategies further?

Key Learning Points for Retailers on Tackling Fresh Meat Losses

Retailers face significant challenges in minimising losses on fresh meat, with theft, waste, and operational inefficiencies being the primary concerns. In our most recent working group meeting, retailers in the meeting highlighted current best practices and future plans to address these issues effectively. What’s Working Now? Retailers have trialled and implemented various strategies to reduce losses in fresh meat, focusing on deterrence, operational efficiency, and balancing sales with security. Physical Deterrents: Pushers and Shelf Modifications: One of the retailers reported a successful trial of pushers in 350 stores, showing improvements in sales, waste reduction, and loss prevention by slowing down theft attempts. Security Tags and Nets: Other retailers had explored net-based solutions, while another developed a specialised tag for leg joints with clear cabling, which reduced losses by 40%. However, another found that the labour cost of applying nets (22 seconds per tag) outweighed any shrink reduction. Safer Boxes: Several retailers used protective cases, but their effectiveness has waned as shoplifters have adapted. Technology & Surveillance: Weighted Shelves & Smart Cameras: Two retailers shared that they had tested and / deployed smart detection cameras and weighted shelves to identify theft in real time. Public Display Monitors (PDMs): One retailer saw a 41 basis point reduction in shrinkage where these were installed above meat sections. AI-based Theft Detection at Self-Checkouts: Some retailers, have been exploring AI-assisted self-checkout monitoring to reduce theft at point-of-sale, with meat being a category that is often not being scanned by the shopper, either by mistake or deliberately. Tagging Strategies: Soft Tagging at Source: Most retailers have embedded security tags at the manufacturing level to improve compliance and efficiency. High-Visibility Stickers: One retailer transitioned to bright yellow and black soft tags for a stronger visual deterrent, which led to increased awareness among staff and customers. Operational Adjustments. Repositioning Meat Sections: Some retailers relocated meat sections to more visible areas or near checkouts to reduce theft. Product Range Optimization: One retailer reduced high-risk meat SKUs in convenience stores where losses exceeded sales. Improved Packaging: One retailer shared that they had enhanced packaging to prevent damage in transit, minimizing unrecorded losses. Future Plans & Innovations Retailers are looking at innovative approaches to enhance loss prevention strategies without negatively impacting sales or increasing labour costs significantly. Exploring Alternative Packaging: One retailer plans to introduce boxed lamb legs, similar to its premium beef joints, with security tags inside. However, another retailer found that boxed meat led to increased shrinkage, likely due to a more premium perception. Many retailers remained cautious about boxed packaging due to space constraints and potential impact on customer purchasing behaviour. Advanced Security Solutions: AI & Smart Shelf Technology: Several retailers are expanding the use of AI-driven theft detection. EAS Deactivation at Checkout: Another retailer is rolling out security stickers that can be deactivated at self-checkouts to improve compliance. Localized Strategies: High-Loss Store-Specific Approaches: To combat the problem, several retailers are focusing their efforts just on the high-risk stores rather than applying blanket measures across the entire business. Collaborations & Industry Sharing: Engagement with Suppliers: Many retailers are working closely with suppliers to introduce security measures at the production stage. Industry Working Groups: Companies are increasingly participating in forums such as this one, to share insights and benchmark strategies. Conclusion Retailers continue to refine their loss prevention strategies for fresh meat by leveraging physical deterrents, technology, operational improvements, and smarter packaging. While measures like pushers, tagging, and AI theft detection have shown promising results, balancing these with customer convenience and sales growth remains a challenge. The future focus will likely be on data-driven, store-specific approaches and further integration of technology to tackle meat losses efficiently.

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