Out-of-Stock No More: NRF 2020 Addresses Retail Inventory Issues
Wed, April 21, 2021

Out-of-Stock No More: NRF 2020 Addresses Retail Inventory Issues

The world’s largest retail conference and expo, NRF 2020 had 40,000 attendees, 18,000 retailers, and 800 exhibitors from 99 countries. Robotics and Ai solutions that aim to address several inventory and labor issues for retailers were tackled / Photo by: rclassenlayouts via 123RF

 

The NRF 2020 was held from January 12 to 14, uniting more than 40,000 individuals to share their visionary ideas, establish visionary partnerships, and experience visionary technology, according to the official website of the NRF (National Retail Federation), a trade association representing the retail industry for over a century.

The world’s largest retail conference and expo, the event had 40,000 attendees, 18,000 retailers, and 800 exhibitors from 99 countries. Robotics and Ai solutions that aim to address several inventory and labor issues for retailers were tackled. At the show floor, enterprises showcased different technology solutions, particularly mobile robots, aerial drones, camera systems, and integrated AI software for fast analytics.

 

Robotics and Automation at NRF 2020

Robot vendors promised to address problems surrounding inventory tracking and shelf analytics and price accuracy as well as planogram compliance. The latter refers to ensuring that products were placed correctly on shelves, thereby matching a planned display. 

A number of robot companies also showed their warehousing and supply chain offerings, demonstrating to retailers how robotics and automation can complement omnichannel efforts such as “buy online, pickup in store” or how they can take care of store replenishment workflows to and from distribution centers.

Out-of-Stocks Are the Main Problem

Many companies at the NRF 2020 mentioned research or anecdotes about annoyed shoppers finding out that an item is not in stock. Pensa Systems, a company that utilizes small aerial drones to provide autonomous perception for retail inventory, showed data from multiple customer deployments that said, “Real-world, on-shelf inventory levels may be worse than long-accepted estimates.” Pensa’s data highlighted that it routinely averages between 90% and 96% while many retailers aim for 98% on-shelf availability. Pensa’s out-of-stock rate is around 25% to 30%, which was much higher than reported by inventory systems.

Per Pensa’s findings, “hidden stockouts” comprise up to 30% of all out-of-stock situations. These are situations where a gap on the shelf is covered by an adjacent item or a wrong product. Or the items are available in secondary locations but not where customers would expect to find them. Pensa also found that stockout rates for popular, top-selling products are often between 8% and 12% at many stores considering that retailers are motivated to ensure their popular products are always available.

Alarmingly, less popular items remain out of stock longer than the more in-demand products. Niche items offer variety to shoppers, but when hidden stockouts or other issues occur, the products appear to be “in-stock and not selling.” The truth is that the items are actually out-of-stock, which remain undetected for a longer period of time. Pensa stated, “Wrong conclusions can be self-perpetuating and supply chain practices for slower-moving items exacerbate the impact.”  

Small stores perform worse than average as they stock several items to compete with larger stores and online retailers. More often than not, this causes them to run out of top-selling products, resulting in a higher out-of-stock rate more frequently.

Many companies at the NRF 2020 mentioned research or anecdotes about annoyed shoppers finding out that an item is not in stock / Photo by: Akaphat Porntepkasemsan via 123RF

 

Robots Address Inventory Woes

Zebra Technologies unveiled its SmartSight Intelligent Automation System, a subscription-based service and platform that uses the EMA50 mobile robot to look out for out-of-stock items, mismatched prices, and incorrect planogram setups along the store aisles. What makes the system different from other inventory-scanning systems is it can generate corrective actions to retailers’ mobile computers to address issues in real-time. At the show, Brain Corp. collaborated with Savioke, a company that provides robots to the services industry, including hotels, elder care, hospitals, restaurants, and offices, to showcase a concept robot that it plans to announce soon.

The Relay mobile robot was modified to accommodate a tower unit that extends from the top of the robot for inventory scanning purposes. It has been used in concierge applications to deliver items to hospitals, hotels, and other indoor locations. Relay’s tower unit will also be used for in-store advertisements or announcements, officials at Savioke explained. 

Zebra Technologies unveiled its SmartSight Intelligent Automation System, a subscription-based service and platform that uses the EMA50 mobile robot to look out for out-of-stock items, mismatched prices, and incorrect planogram setups along the store aisles / Photo by: Dmitrii Shironosov via 123RF

 

New Roles for Mobile Robots

Enterprises that specialize in mobile robots that operate in warehouses as part of a logistics workflow or a supply chain also made an appearance at NRF 2020. The companies sought to cater to the needs of retailers that are thinking of venturing into robotics to achieve omnichannel support or to increase awareness of robotics. For example, RightHand Robotics showed its piece-picking use case to attendees.

Vince Martinelli, head of product and marketing at RightHand, said this was not just an issue for e-commerce firms, citing store replenishment as a big concern. “Depending on the retailer and the pain of labor costs [in store replenishment] is causing them to think about things—some of them want to automate that,” he stated. However, there are some organizations that focus on their direct-to-consumer line, highlighting that it varies across companies, Martinelli added.

Retail Robots Key Statistics

In 2018, the global retail robot market was valued at more than $20 billion with a CAGR of 30% expected between 2018 and 2028, according to Berkyl Market Analysts via Digital Journal, a global digital media network. Inventory robots were also said to dominate the market, accounting for 90% of global shares in 2018 and driving the fastest growth during the forecast period.  

It’s frustrating to find out if the item you’re looking for is not in stock. Hence, NRF 2020 highlighted how robotics will address retail issues, particularly inventory. Hopefully, the rapid growth of inventory robots will slash down out-of-stock rates of retail stores.