Can Wakefern crowdsource away its out-of-stocks?

Discussion
Jan 19, 2018
Matthew Stern

Supermarket cooperative Wakefern Food Industries is testing a creative solution that blends technology with shoppers’ natural behavior to address the problem of out-of-stocks. In a session at the 2018 National Retail Federation Big Show in New York City, Christopher McCrae, manager of retail logistics at Wakefern Food Corporation, explained this hybrid human/automated strategy for keeping items on the shelves.

In pilot stores, Wakefern has mounted out-of-stock detector cameras made by Focal Systems on the sides of about 50 carts. As customers go through the aisles on their shopping trips, the cameras identify voids on the shelves, crowdsourcing the out-of-stock detection process. The information that is collected is run through various algorithms to determine if a product that is missing from the shelf is in the building, how much has been sold, if it might be in a cart currently rolling around a store and so on. The system then builds a task list, and key employees are tapped to replenish the out-of-stocks.

“[Before] we could go all day long given certain circumstances and certain fires that have to be fought by the staff in the store and not replenish an item, disappointing our customers — not getting that sale,” said Mr. McCrae. “Now that we have the computer vision and we have our shoppers pushing these carts all over the place we’re being told within minutes, here’s where you’re missing product is, here’s where you have to replenish it.”

Pilot stores have also taken the next step of alerting direct store vendors to let them know when their product runs out to help them regulate their schedule.

“There’s really a whole ecosystem that’s being built around this information,” said Mr. McCrae.

In addition to improving customer satisfaction, Mr. McCrae sees this as a labor-saving solution, preventing the need to pay staff to roam the aisles to keep an eye on out-of-stocks.

Mr. McCrae also noted that using an automated solution to predict cashier downtime allows Wakefern to leverage cashiers to aid in shelf replenishment based on the Focal Systems camera data.

Also on the panel were Nick Saunders, senior vice president of Quiet Logistics and Vikrum Aiyer, head of strategic communications at Postmates.

DISCUSSION QUESTIONS: Will crowdsourcing the task of finding out-of-stocks via shopping carts prove to be an effective method of minimizing out-of-stocks? In what other ways might retailers hybridize technology and customer activity to crowdsource solutions to difficult in-store problems? 

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"This is a creative way to solve part of the problem. The ability to scan the shelf from a shopping cart has some merit."
"I believe a hybrid approach is best but really requires the retailer to have a real time infrastructure to sense and respond to the condition."
"It’s hard for me to believe this approach won’t be leapfrogged by more accurate technology ..."

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21 Comments on "Can Wakefern crowdsource away its out-of-stocks?"


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Charles Dimov
Guest

Crowdsourcing seems like a good idea for leveraging your shoppers. However, after seeing several stock-checking robotic solutions at NRF this week, I wonder if that is not a better solution that would be less disruptive to consumers.

Max Goldberg
Guest

Using cameras tied to computer systems will help eliminate out-of-stocks which, if corrected quickly, will please consumers and result in higher sales. As technology expands in stores and via mobile devices, consumers should be able to find what they want more easily, check out quickly and take advantage of promotions and loyalty programs without cards and coupons. Technology should help make the shopping experience faster and more seamless.

Dr. Stephen Needel
BrainTrust

I like the idea — it’s a great use of technology. But I’m wondering if the cost of technology is less than the cost of single employee who is tasked with this job. If it’s cheaper, then this is fantastic, assuming the store is capable of responding quickly.

Art Suriano
BrainTrust

Crowdsourcing technology is a great idea and should prove to be valuable. Out-of-stock items are always frustrating for customers so any way a company can cut down on that problem is smart. However, this technology may prove too expensive for some retailers and/or not practical for them. Making sure you have good inventory control is essential. There are many systems today using technology software from voice-activated inventory control where the associate simply scans the aisle and talks into the system, telling it what needs replenishing. But until all retailers have the technology that works the best for them, they need to focus on the current inventory system they’re using to keep items in stock. The last thing a business wants is a customer walking out because they couldn’t find the item that was out of stock. That’s not only a lost sale, it’s an unhappy customer who may start shopping someplace else in the future.

Phil Masiello
BrainTrust

This is a creative way to solve part of the problem. The ability to scan the shelf from a shopping cart has some merit.

In today’s environment, an investment in the correct supply chain software can probably do a better job. Linking sales information, order information, warehouse and backroom inventory data is another way to approach the issue. Where this process has broken down in the past is by users disrupting and bypassing the system, which leads to inaccurate information. But many retailers do, in fact, use extended supply chain software effectively in reducing or eliminating out-of-stocks.

The primary, long-term issue I see with this system is hardware breakdowns, humans bypassing or ignoring the systems and high maintenance costs.

But it is another approach to a long-term problem.

Ron Margulis
BrainTrust

It’s hard for me to believe this approach won’t be leapfrogged by more accurate technology that will link the planogram of the shelf with the transaction log data at checkout so the store system can alert management when stock needs to be replenished. I understand this may be a bit harder in fresh areas and with DSD products, but crowdsourcing seems like a stopgap solution to a problem that needs a more systemic approach.

Richard J. George, Ph.D.
BrainTrust

This is the modern day, technology version of what Feargal Quinn implemented in the ‘90s in Ireland. Feargal, the force behind the very successful chain of supermarkets, Superquinns, was faced with the same out of stock problems confronting most retailers. His stores opened at 8 a.m. and all department managers were tasked with identifying out-of-stocks and out-of-code situations. Despite these efforts, out-of-stock and out-of-code products continued to plague Superquinns.
Feargal created a “We Goofed” program in which shoppers received loyalty points for identifying these and other disappointing shopper experiences. The net result was a deluge of shoppers descending upon the stores when they opened at 8 a.m. By 8:30 a.m., every out-of-stock and out-of-code situation was identified and corrected. The cost to Feargal was a few “We Goofed” points distributed to his legion of unpaid employees. Problems solved and customers engaged. A true win-win scenario that technology may allow others to emulate. The lesson learned is that low-tech solutions do exist.

Ryan Mathews
BrainTrust

Decades ago Superquinn in Ireland experimented with a low-tech version of this — they awarded extra loyalty points to shoppers reporting out-of-stocks. Crude but effective. Several retailers are also exploring using robots to scan shelves in real-time. Seems like an easier and ultimately more effective solution to me.

Shawn Harris
BrainTrust

This sounds like it could be an effective solution to monitoring for out-of-stocks, while having the potential to reduce labor hours. If the equipment/service’s CapEx/OpEx is competitive with legacy and emerging solutions, and it achieves its performance goal, I do not see why this would not gain some traction.

Adrian Weidmann
BrainTrust

Combining technology with crowdsourced “reporting” is an interesting twist. Using your shoppers and their carts as the consistent power behind moving the cameras through your aisles is certainly clever. While camera sensors and video analytics provide exceptional data, I believe this is an interim solution. I have long been a fan of RFID technology and believe this technology complemented by a paradigm shift in the current business models will solve a much broader supply chain challenge and provide the predictive analysis to eliminate the out-of-stock problem altogether. Retailers and brands need to stop using digital technology to simply address analog status-quo problems. They need to break the paradigm and think digitally and differently.

Steve Montgomery
BrainTrust

I see this use of crowdsourcing as a stopgap between what is today and what likely coming down the road fairly quickly. As Stephen pointed out a single employee dedicated to identify OOS might be less expensive.

Charles pointed out the future might be the robotic solutions being shown at NRF. Is it worth testing. In my opinion the answer is yes they are, but I would wait a while before rolling them out across a retailer’s network.

Harley Feldman
BrainTrust

While this is a clever solution to collect data, I think it is a stopgap measure to a more measured approach. Robots are getting much better at collecting data and they are predictable in accuracy and timeliness. Handheld RFID technology collects data more quickly and accurately than today’s bar codes. IoT RFID built into the shelf or overhead readers will provide accurate data at the periodicity requested by the brand or retailer. These technologies will be more accurate, less intrusive and timely than the crowdsourced solution.

Cate Trotter
BrainTrust

It’s certainly an interesting idea to make use of your customers, and the fact that there are a lot of them moving all over the store, to identify out-of-stock items. There’s certainly something kind of cool about the idea that a customer could pick up the last of something on the shelf and their cart could immediately identify that and alert someone to fix the issue. The algorithms sound like they might also produce some valuable data that could be used to improve stock ordering in general in the future. But I agree with other comments about cost-effectiveness of the technology and whether it will be superseded by something else a short way down the line. It’s certainly an interesting enough idea to warrant testing.

Sterling Hawkins
BrainTrust

The technology, computer vision, is unquestionably going to be used more and more for out of stock management. I do like the Focal Systems solution at Wakefern. We’ll also see cameras mounted in aisles, on robots and potentially even personnel as the technology becomes even more robust. Wakefern’s approach of building an ecosystem around the data is the right one — 5 stars for putting actionable data in the hands of people that can make a difference with it.

John Karolefski
BrainTrust

I like this solution because it is using smart technology to a solve problem that has vexed the grocery industry for decades. Lots of robots emerging with a possible solution as well.

James Nichols
Guest

This is a fascinating and imaginative solution to a real problem. But I am surprised that this is the best way to track these things. Wouldn’t a robust inventory management system that tracked purchases versus stock be more accurate?

Craig Sundstrom
Guest

Is sounds great, but aren’t computerized inventory systems are already supposed to tell that very information? Admittedly, anyone who’s ever had involvement with inventory knows there is a gap between theory and reality, so this could well be an improvement. But I have to wonder if the bigger problem isn’t lack of info, but rather acting on the info (already) available. And of course if it’s not just o-o-s on the shelf but o-o-s period, there has to be follow-up in the reordering.

Ricardo Belmar
BrainTrust

This is a clever combination of low-tech (the shopping cart) and hi-tech (scanning camera) solutions to solve out-of-stocks. I suspect the capex is overall lower than competing robotic solutions seen at NRF earlier this week, but the question is how will the opex of maintaining the equipment compare. Assuming it’s better than the robot solutions, this could see some adoption beyond Wakefern’s pilot stores.

However, the scanning activity is only part of the overall solution. Retailers still need the right software to manage the supply chain side of this to ensure products are ordered when needed to keep shelves stocked. Additionally, I can see the need for other infrastructure pieces many retailers are still struggling with (including wi-fi in the store, plus their wide are network connecting their in-store systems to their supply chain), but this is an interesting solution to watch!

Ken Morris
BrainTrust
Ken Morris
Retail industry thought leader
1 year 9 months ago
Minimizing out-of-stocks is obviously a critical issue for grocers. Using cart-mounted cameras to identify out-of-stocks is a great way to improve inventory on the shelf, but it has some drawback. For example, for items on the top shelf, if the front item is missing, it probably won’t be able to see that there are still 10 items further back on the shelf. It is a good monitor of potential out of stocks that can be used to alert store staff to check the shelf and restock as appropriate. This tool combined with RFID and POS transaction data could definitely improve out-of-stock instances and help prevent lost sales and reduce shopper frustrations. At the NRF show there were a number of technologies focused on out of stocks, some data driven, robotics, WFM based Business Process Management products, etc. I believe a hybrid approach is best but really requires the retailer to have a real time infrastructure to sense and respond to the condition. That is the real power of this technology to sense it in real-time… Read more »
Min-Jee Hwang
Guest

Crowdsourcing is a great way to collect actionable in-store data. This needs to be done in a way that is non-disruptive to customers. This plan sounds like it would certainly help minimize out of stock items and making more productive use of employee time. I’m not certain just yet if it is the best way to approach out-of-stock situations, but it is definitely a step in the right direction.

Michael La Kier
BrainTrust

Out-of-stocks are a significant issue at retail for both retailers and manufacturers. Helping to find and close out of stocks through technology on an ongoing basis is an important effort. Using existing store assets to make this happen (in this case via shoppers pushing shopping carts) is an interesting way to go and test. Following this game plan, security cameras could be retro-fitted with smarter software to do something similar.

wpDiscuz
Braintrust
"This is a creative way to solve part of the problem. The ability to scan the shelf from a shopping cart has some merit."
"I believe a hybrid approach is best but really requires the retailer to have a real time infrastructure to sense and respond to the condition."
"It’s hard for me to believe this approach won’t be leapfrogged by more accurate technology ..."