smartShelf™ Proof of Concept Results

Introduction

newave® conducted a smartShelf™ (SS) proof of concept (POC) in 6 stores over 4 months. The SS System was Generation 5, which benefitted from the learning from the previous, rigorous, in-store tests in varied product categories.

Proof of Concept (POC) Details

  • Tobacco Category
  • Convenience stores generally open 24/7 in Toronto, Canada
  • Cigarette sections were 16 ft. in length, with approximately 250 SKUs.
  • Store installations were completed in August, and the POC ran September through December.
  • On-site store audits were completed frequently to verify SS accuracy.
  • In October, SS Instant Low Stock Alert Training was completed with in-store personnel.
  • The following pages display the key POC learnings. These findngs are consistent with previous SS pilot test results.
  • The Category SKUs were sorted by the total unit sales and then separated into five cohorts of equal size (approximately 50 SKUs per cohorts).

Improvements in Out-of-Stock (OOS) Occurrences

The Top 20% of SKUs led the way with a 67% reduction in OOS Occurrences.
Category OOS Occurrences were reduced by nearly 65% by month 4.
Training and OOS visibilty resulted in the most significant reductions in mos. 3 and 4.

Improvements in Out-of-Stock (OOS) Time

smartShelf™ (SS) reduced OOS hours for the Top 20% of SKUs by 74% in only 4 months.
Following SS Instant Low Stock Alert Training, OOS hours decreased by nearly half in each mos. 3 then 4.
The overall category improved by nearly 71%.

Share of Shelf

The Top 20% of SKUs generated over 64% of the total sales, but was allocated only 35% of the shelf.
The Top 40% of SKUs generated 81% of the total sales, but was allocated only 58% of the shelf.
The Bottom 40% of SKUs generated only 8% of the total sales, but was allocated 23% of the shelf.
SKU rationalization and planogram optimization is needed to improve sales and in-store productivity.

Note: Due to rounding, sum of percents may not equal 100%.

Lost Sales and Profit Due to OOS

Cohort$ Sales at $10 per Unit$ Sales Lost at $10 per Unit$ Profit Lost at $1.50 per Unit
Top 20%$1,165,860($62,188)($9,328)
Middle Top 20%$316,994($53,770)($8,065)
Middle 20%$184,206($46,661)($6,999)
Middle Bottom 20%$104,033($28,805)($4,321)
Bottom 20%$32,128($11,176)($1,676)
Total SKUs$1,803,220($202,600)($30,390)
With 11% lost sales and profit, improvement can continue well beyond Month 4.
The Top 20% of SKUs continue to offer the greatest opportunity for increased sales and profitability.

smartShelf™ can generate continual incremental sales and profit.

  • Annual planogram optimization
  • Immediate assessment of new product introductions and promotional programs
  • Supply chain optimization, e.g. replenishment, production efficiencies, and more

smartShelf™ (SS) POC Findings

  • Audits proved that the syndicated data employed significantly understated out-of-stock.
  • smartShelf™ calcuated, in real time, category inventory at 99%+ accuracy by store, by SKU and for any desired timeframe, down to the second if needed.
  • SS data can be integrated into an ERP system or into reports formatted by the client in any form and frequency (CSV, HTTP, JSON).
  • SS provided visibility by function for managerial analysis (e.g. sales, marketing, finance, production).
  • POC benchmark metric results: the Payback Period was between 7-8 months, IRR of over 200%.

If you can push it, smartShelf™ can track it!

Let us show you the value of SS to your business.

A simple spreadsheet model is available to instantly estimate the smartShelf™ ROI, IRR and payback period.

Three inputs are needed:

  1. Average Unit sales per month
  2. Average OOS %
  3. $ profit per unit