Unlocking Revenue Through Powerful Shelf Intelligence

By Dave Schoewe, Acosta VP, Transformation and Brad Gay, Acosta VP, Business Intelligence

Brands assume they have a grasp on their stock levels in-store, but they don’t.

Inaccurate shelf inventory assumptions and the lack of true visibility into shelf conditions cost brands trillions of dollars yearly.  A retailer’s backroom inventory and sales systems are typically digitized. Yet the “in-between” shelf inventory—the products available for sale on the shelf at the “moment of truth”—remains offline.

Most brands currently approximate their shelf inventory by comparing retailer point-of-sale (POS) and backroom inventory data. This legacy approach is up to 30% inaccurate due to system lag time, shrink, misplaced items, non-compliance, and scan-out errors, resulting in erroneous shelf planning and less effective in-store execution.

In addition, category management, shopper insights, and sales teams often complement shelf data estimates with store audits. They’ll manually evaluate in-stock levels and space performance across a category at a handful of stores and extrapolate their findings to an entire retailer. Store audits occur sporadically, sometimes only once a year, given the cost and complexity, and these manual inventory audits are typically only about 48% accurate.

The on-shelf availability (OSA) benchmark is 95%, but products are out of stock on average ~18% of the time (82% OSA). Many categories have OSA rates well below the benchmark:

Brands that persist in this approach face revenue loss, intensified out-of-stock issues, and the risk of losing market share or customer loyalty. Third-party order pickers and omnichannel commerce can trigger immediate sales loss and potential long-term brand switching through product substitutions. Due to rising costs, inflation, bulk buying, assortment complexity, and private label trends, a clear grasp of shelf inventory and performance KPIs is vital.

Game-changing Shelf Intelligence

For every point of OSA closed, there is an opportunity to gain 0.5% of revenue.

We’re proud to partner with Pensa, a leader in revolutionizing how brands and retailers manage retail shelf inventory. Pensa’s innovative technology offers 98% accurate digital reconstructions of shelf conditions, complementing other retail datasets.

In addition to being significantly more accurate, Pensa’s video-based capture solution is much faster than single-image-based solutions (~20 seconds to capture an entire aisle versus photo-capture solutions that take several minutes). Utilizing video enables the capture of an entire category, including competitors and private label brands, rather than solely focusing on the client’s brands.

If you don’t have it, you’re missing out.

• Scan captured in-store: Pensa’s mobile app swiftly assesses inputs from various sources to capture continuous video of a store aisle in ~20 seconds.
• Digital visual reconstruction: Pensa’s AI technology analyzes items from multiple angles to digitally reconstruct highly accurate shelf conditions.
• Continuous, automated insights: Data feeds inform strategic planning via interactive ForeSite dashboards or client scorecards (versus infrequent shelf audits).
• Advanced optimization: Pensa visual data sets are combined with store-level supply chain and POS data to measure OSA and share of the shelf in real-time.

Having access to Pensa’s granular, actionable SKU-level data makes our retail execution teams more effective in-store, allocating time where time is most needed. If Acosta Group’s merchandisers are your feet on the ground, Pensa is your brand’s eyes, helping to optimize:

• Out-of-stock or underperforming SKUs
• Sub-optimal store assortments
• Sub-optimal share of the shelf within the category
• A high rate of product substitution
• Promotional event effectiveness
• Planogram or shelf compliance
• Ineffective merchandising
• Tracking of new items not in distribution
• Forecasting

There is a lot of noise in the market regarding computer vision artificial intelligence (CVAI) retail shelf inventory visibility solutions. Fixed shelf cameras, robots, and image capture solutions all leverage some form of CVAI and make compelling claims about accuracy, cost and ease of use. Pensa redefines shelf inventory accuracy with in-stock levels validated by trailing in-store retailer audits. In contrast, others define it as how accurately a product image taken of the shelf compares to an image reference database.

We stand with Pensa as the best in breed, demonstrating change that leads to increased revenue lift.

During a recent deployment with a leading CPG manufacturer, Pensa identified $500 million in revenue opportunities, leading to an 8% increase in the brand’s on-shelf availability and market share gains of 1-2%. Pensa enabled the client to add facings for high-velocity SKUs, improve scheduled delivery times to close OSA gaps and remove signage blocking items from shoppers’ view.

This solution is quickly and easily implemented without requiring planograms or category image libraries from the client, delivering comprehensive data within weeks, not months. The CVAI inherently learns every item without requiring reference images removing complexity and maintenance costs from the client. Pensa’s motion-based computer vision and self-learning artificial intelligence do not require the human-in-the-loop quality assurance of other solutions, resulting in much higher accuracy from data capture and vastly superior speed to insights delivery.

Pensa gathers intelligence from 50+ retailers and 5,000 locations across grocery, drug, convenience, mass, dollar, and specialty, providing a complete view of category trends, including private label. Existing categories on the Pensa platform offer instant insights for clients. New categories can be implemented in two to six weeks, depending on category size and retail channels.

Minimize OSA Losses Now

Pensa’s support in reducing out-of-stocks translates directly to increased sales. Pensa’s resource library contains a variety of additional client success stories.

Pairing Pensa’s technology with Acosta’s category and space optimization experts will further expand your brand’s efficiencies and reduce costs by:

• Enhancing shelf conditions and inventory levels to minimize out-of-stocks
• Optimizing replenishment processes/methods
• Improving pricing strategies based on elasticity and profitability
• Measuring brand performance vs. category and competitors
• Measuring and improving the impact of category resets

Earning and maintaining category leadership is a crucial component of driving ROI. Does your current shelf intelligence strategy measure against the KPIs that matter most? If not, let’s get started.