smartShelf™ Proof of Concept Results

smartShelf™ Proof of Concept Results


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 56% reduction in OOS Occurrences.
Category OOS Occurrences were reduced by nearly 50% 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™ calculated, 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%.

smartShelf Return on Investment

CategoryActual Data
Avg. Vol.
Avg. Profit
Avg. OOS
Lower Vol.
Avg. Profit
High OOS
Low Vol.
Good Profit
Avg. OOS
Unit Sales per month per store8,3325,0003,5002,500
OOS Units per month per store2214600525250
OOS %27%12%15%10.0%
% of OOS Units recaptured85%85%85%90.0%
Profit per Unit$1.50$2.00$2.75$4.25
Potential $ Savings per Month @ 95% OOS efficiency within 2-3 month start up$2,822.85$1,020.00$1,227.19$956.25
$ Investment per store - 16 Ft Section$9,500.00$9,500.00$9,500.00$9,500.00
Payback Period in months6121012
Sales per Linear Foot Per Day3211

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