ECR Retail Loss

Enabling the Retail Sector to Sell More and Lose Less

Food Waste: 66 Best Practices to Sell More & Waste Less Checklist

Nearly ten years ago, we published a [aper that listed 65 "best practices" to help retailers sell more and waste less. The paper was authored by Assistant Professors Karel Van Donselaar and Rob Broekmeulen, from Eindhoven University. We recently had a chance to review all 65, and we think they have survived the test of time! But you can be the judge, so please take a look below and compare them to your current practices. Perhaps this review, maybe you do it as a cross functional team, can spark some new thoughts and ideas? Enjoy! Here they are then, 66 best practices to selling more and wasting less. Store Operations Management Create awareness among store associates of the importance of waste reduction, for example, by giving them frequent feedback on the impact of waste on the environment Ensure sufficient workforce are available for timely shelf restocking Record the expiration dates per SKU and stimulate demand for items where expiration date is approaching and excess stock is large Introduce easy to understand KPIs related to waste, set realistic targets, and give incentives when targets are met Educate and train store management and employees on routines Ensure the delivery of promotions in every store is aligned with promotion conditions (especially display) as used in forecasting Ensure every store executes the markdown strategy perfectly Introduce in-store final processing (for example, bake-off or butcher) Shelf replenishment Put oldest items at the front Make shelves large enough to prevent OOS Align the actual number of facings on the shelves (not necessarily equal to planogram) with demand Create a well-organised and accessible backroom, especially cold rooms Use easy-access and handling-friendly crates or boxes (e.g. plastic crates with standardised sizes) Replenishment logic Supply goods for promotions in two waves and use early sales information during promotion of second wave. Use age-based replenishment logic Allow flexible lot-sizing for items with high waste Apply a new replenishment logic: using inventory and order up to levels at aggregate level for categories with high substitution willingness (i.e. first determining the aggregate desired number of products for the entire product category and then breaking it down to the SKUs) Increase inventory, sales and supply data accuracy Case pack size Optimise case pack size, making trade-offs between handling costs and waste Minimum stock Optimise safety stock and commercial display stock to balance customer service and waste Differentiate target service levels for items with long and short shelf life Differentiate target service levels for items with high and low average demand for categories with high substitution willingness Align customer service definitions in management report systems and in replenishment systems Timely reduction of safety stocks for items near phasing-out or near end-of-season Supply Chain Discuss options for products with longer shelf lives with current supplier Select new suppliers with flexible production, short lead times, and longer product shelf lives Educate and reward buyers for waste reduction Apply cross-docking Increase delivery frequency (for example, by combining fresh and ambient products in one truck or use retail DCs instead of direct delivery by suppliers) Pick orders in the DC during the night Optimise the balance between the target service levels for the DCs and the stores. Optimise the minimum shelf life left for the store when the product leaves the DC Use different ingredients or different production technologies to improve products’ image of freshness and the shelf life Use innovative packaging to increase the shelf life Cooperate with supplier to exchange operational data (inventory, forecast, actual sales) and KPIs to align production at suppliers with demand Implement vendor-managed inventories Implement supply chain synchronisation and push the majority of the inventory downstream as soon as storage space is available Increase demand Review assortment and eliminate bleeders where waste is more than 50-80%, thereby increasing demand for substitutes Stimulate sales for slow movers through better information to consumers (e.g. explaining benefits of organic food) Offer damaged or ugly food at discounted prices Markdown strategy Evaluate use of markdowns on items which approach their sell-by-date Only markdown if items would not be sold otherwise (based on actual inventory and demand forecast information) Optimise the timing and the extent of the markdown Change withdrawal behaviour Reduce space between shelves. Reduce number of batches with different shelf lives on the shelf Educate consumers on differences between sell-by-dates, use-by-dates, and best-before-dates Inform consumers on possibilities of using misshapen food items Reduce demand uncertainty Increase average demand per SKU (see above) Apply Everyday Low Price (EDLP) strategy. Reduce demand dynamics Deliver smooth weekly sales pattern, e.g. by having special promotions on days with low traffic Give additional stimulus to sales during phasing-in or –out of products (extra promotion, taste for free, reduced prices) Improve demand forecasting Use different forecasting techniques for items in different situation (whether item is regular, on promotion, phasing-in or out, with trend, and/or with seasonal pattern) Detect trends and/or seasonal patterns when forecasting demand, and, if necessary, apply different forecasting parameters Remove promotional sales data when forecasting regular sales (also when selected stores prolong the promotion to avoid waste) Promotion management Apply Everyday Low Price (EDLP) strategy. Avoid multi-consumer-unit offers like ‘2 for 1’ Investigate substitution effects and reduce forecasts for items facing cannibalisation Change planograms/displays Use alternative ways to display items (for example, partly fake items with smaller amount of real items, or use pictures or multi-media) so that even in the face of out-of-stocks there is a customer perception of wide choice and abundant inventory Only use multiple facings for fast moving items Improve storage conditions within store (install chilled cabinets with transparent doors) Change merchandising policies from “Pile ‘em high” to new, store-specific merchandising policies Assortment Carry a dynamic assortment for the slow movers/specialties based on the production schedule of the supplier Remove bleeders or replace them by new items Add items to assortment that can be used with items near to sell-by-date as ingredients (e.g. fresh soups) or consume on the premises like in food markets Educate and reward category managers on waste reduction Align assortment and/or planograms with average demand for individual stores or groups of stores Offer smaller consumer units

Security Operations Centres (SOC) - Invitation to Participate in Survey

In the past decade, many retailers have invested in Security Operations Centres (SOC's) where the remote access to video data from stores and other retailer owned locations, across geographies, has opened up huge opportunities for new security, shrink and marketing use cases. To explore how these SOCS are being used, we are launching a new online survey to explore the current and planned uses of SOCs, providing study participants with unique insights as to how, and for what reason, retailers are using SOC's in their business. The findings from this survey will be presented in our online video in retail working group meeting on October 22nd. We are now inviting all retailers to participate in this survey and as with all of our research, participant anonymity and data confidentiality is paramount. No named data will be shared and only aggregated data will be published. . Thank you for your participation. Click here to open the survey or scan the QR code.

Announcing the Top Thirty Innovations in Retail Risk, Safety, and Security

Since April, our scouting team have been on a global search to find the most innovative solutions in Retail Risk, Safety, and Security. Over the past six months, we reviewed more than 500 companies, which our panel of retail judges then narrowed down to a list of 100 exceptional solutions. From this extensive list, the panel of 28 leaders—representing international retailers from over ten countries and responsible for over $2.27 trillion combined— selected the Top 30 innovations. These solutions were evaluated for their potential to address key challenges across four critical areas: People, Product, Property, and Process. The Top 30 include cutting-edge approaches to recognised areas of loss: Product: Advanced Theft Prevention Technologies—Utilising smart product tagging and tracking to reduce loss and enhance inventory control. People: Enhanced Employee Safety Solutions—Implementing real-time monitoring and alert systems to protect staff and respond swiftly to potential threats. Process: Streamlined Fraud Detection Systems—Employing sophisticated algorithms to detect and prevent fraudulent activities, improving overall process integrity. Property: Integrated Surveillance and Security Infrastructure—Deploying advanced Ai powered surveillance systems and smart security measures to safeguard physical assets and ensure property protection. To explore these top innovations and see how they’re shaping the future of retail security, check out the full list below. AI Retailer Systems Akuret Auror Calipsa Chirp-protect CloudPass Limited Cobalt AI Cognitiwe Duress FaceFirst Flock Safety Glimpse Analytics Indoor Robotics Kaseware mokSa.ai Mursion ONDIS SOLUTIONS LIMITED Pathr.ai SAI Group SkillsVR SoloProtect UK Spacture STRIVR Uptale Vector Solutions (LiveSafe) Veesion Verkada Wobot AI Zecure Zinc Systems

RFID: The twelve critical questions retailers have on their work plan.

Every year, for the last ten years, the RFID working group meets virtually four to five times a year, and meets once in person at the annual RFID innovation summit. Here are twelve of the hottest topics our working group has in scope for our ongoing research and meeting agendas. 1) Defining Inventory Record Accuracy: Recent research suggests that retailers are adopting a number of different definitions as to what is meant by an “accurate” inventory record beyond just the binary definition, is it an exact match (1) or not an exact match (0)? The group's research and meeting agendas will seek to understand how retailers define and mean by an accurate inventory record, at the SKU level, and then the different aggregation methods they have adopted. The research will also explore how they display and communicate accuracy metrics across their business, beyond just the finance department. 2) RFID Category Expansion: To date, most retailers have focused their RFID tagging investments in apparel and sports goods, however many retailers are now looking to increase the number of categories where RFID can be applied at source. Our meetings and benchmark data collection will explore what categories are being added, how those categories have been selected, the support for RFID source tagging from brand owners and the results being delivered. 3) Managing RFID Innovation: For some retailers, once deployed and “up and running”, RFID can quickly evolve into a Business As Usual (BAU) mode, where the motivation for new use cases is low, and the capacity to innovate is limited, as project management resources and IT tech have moved onto new projects. Other retailers though have taken a different path and seek to expand the number of ways the business thinks about and does leverage RFID across their whole supply chain. Our meetings will hear from retailers who have an ambitious pipeline of innovative use cases planned for trial and deployment across the business and explore with they have organised themselves to constantly engage many and more parts of the business to develop new and more imaginative ways of using RFID in their business. 4) RFID Data to Insight: How are retailers turning RFID data into business insights to help support store operations, loss prevention and replenishment. In our meetings, we will collect and get to hear from the retailers in the group about their learnings and how RFID data is helping them make better business decisions. 5) RFID Self-Checkout: A near frictionless RFID checkout experience (no scanning required, no hard tags to remove) with exit gates informing the customer and the store as to the exact items that have not been scanned, seems close to an ideal loss prevention “approved” customer journey. Our research and meetings will investigate and get to learn how retailers have executed such a programme, for example, do you have to have 100% of all items with RFID, and explore then their learnings on “operationalising” self-checkout and its impact on productivity and loss. 6) RFID Smart Gates: A number of retailers, where full POS integration has not yet been implemented, have introduced RFID smart gates to detect specifically what and how many items left the store, through which exit. This allows them to cross check these movements with their POS sales records to identify how many items, at what time of the day, left the store without a payment. Insights from this analysis can then inform loss prevention strategies, not least by understanding exactly what percentage of the total loss can be accounted for by external theft. Leading then to informed discussions on what can be done to prevent the theft of items from the store and recover those goods that were not sold? Our future meetings will hear from retailers using smart RFID gates and their experience to date, the results, the limitations, and their plans to scale [or not] 7) RFID Tag Form Matters: First, there was RFID in a hard tag, then there was RFID on a swing ticket, then came the RFID in a “care” label, then came embedded RFID and today there is RFID in threads. Our research and meetings will explore how retailers are transitioning from the more visible and overt forms of RFID tags (hard tags, swing labels, etc) to softer, embedded and more covert forms of RFID tags, such as care labels, threads, etc. What are the impacts on productivity and loss? Does the improvement in productivity offset any uptick in loss? 8) Shielding: What is the current thinking in retailers who have deployed RFID on shielding. Is it still a case of grabbing a paint brush or have retailers adopted the new approaches such as virtual shielding approaches, overhead readers, or other approaches to ensure better visibility per location, especially back-room Vs shop floor. Our meetings will discuss and share the different ways retailers in the group are managing the need for shielding and interventions, such as virtual shielding. 9) RFID Digital Passports: What does it take to invest behind the Digital Passport programme and what are the expected outcomes and benefits? Our research and meetings will track this journey towards compliance in 2027, exploring the business case and the executions, with particular interest in the developments on the use of smart devices to read RFID tags. 10) RFID Tunnels: Being able to “read” packages leaving Distribution / Fulfilment centres containing multiple items quickly and accurately can help begin the trail of accountability and visibility to inventory shipped to stores, wholesalers, and shoppers via ecommerce. Equally, these tunnels can begin to record accurately returns from consumers, stores, etc and goods arriving from the DC. Our research and meetings will get to seek to understand the use of and the benefits of different approaches to "reading" RFID in warehouse including tunnels. 11) DC / FC Inventory Management. DC’s and FC’s are massive open spaces filled with hard for humans to access metal racking, and often the size of ten football pitches and just under a football pitch high. Our meetings will explore with retailers the technologies they are using to record accurately the inventory being held in these locations using RFID technology. 12) Close the loop with RFID data between supplier, distributer, retailer: For many retailers, even if they have not adopted RFID, much of their inventory will arrive already RFID source tagged. Our research and meetings will explore how retailers pick up on this opportunity to build their own RFID programmes. If you would like to join the RFID working group, please click here to learn more about the scope of our work and sign up to the next meetings which are for retailers, brand owners and academics only.

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FOCUS AREAS

The research priorities are determined by its members – they drive the agenda to ensure ECR delivers research that meets the need of the industry bringing new insights, tools and techniques that enables retailers to sell more and lose less.