In the fast-paced Consumer Packaged Goods (CPG) industry, achieving on-shelf availability (OSA) has become a critical success factor. While CPG companies often excel in on-time, in-full (OTIF) delivery rates, discrepancies between delivery and shelf availability persist.
For example, the on-shelf availability solution market in the United States is projected to grow at a compound annual growth rate (CAGR) of 7.0% through 2034, driven by the increasing need for real-time inventory management and enhanced customer experiences. This growth underscores the importance of not only delivering products on time but also ensuring they are consistently available on store shelves to meet consumer demand and foster brand loyalty.
In this blog, we will explore the critical role of on-shelf availability solutions in the CPG supply chain and how brands can leverage innovative solutions to maintain optimal stock levels, reduce stockouts, and enhance customer satisfaction.
Challenges Hindering Optimal On-Shelf Availability
Achieving optimal OSA is not without its challenges. Several factors contribute to the gap between supply chain performance and in-store availability:
- Demand Forecasting Errors: Inaccurate demand predictions lead to either overstocking or stockouts, both of which hinder OSA.
- Supply Chain Disruptions: Delays, logistical issues, and inefficiencies in the supply chain can prevent products from being restocked in time.
- Retail Execution Failures: Poor in-store execution, such as inadequate shelf management, product misplacement, or failure to follow planograms, can lead to products being out of sight or inaccessible to consumers.
To close this gap and ensure products are always on the shelf when needed, CPG brands must implement strategies that optimize both their supply chain processes and retail execution.
In the next section, we will explore effective strategies for helping CPG brands enhance on-shelf availability, mitigate these challenges, and ultimately drive sales growth.
Strategies to Enhance On-Shelf Availability
Achieving optimal on-shelf availability (OSA) requires more than just effective inventory management—it involves a combination of collaborative efforts, advanced technologies, and data-driven strategies. To overcome the challenges of stockouts, misplaced products, and inefficient replenishment, CPG brands must adopt a holistic approach to supply chain and in-store execution. Here are some key strategies that can significantly enhance OSA:
- Collaborative Planning and Forecasting
Engaging in collaborative planning, forecasting, and replenishment (CPFR) with retail partners ensures shared insights and synchronized efforts. This collaboration leads to more accurate demand forecasts and better inventory management, which guarantees that products are available when consumers need them.
- Implementing Scan-Based Trading (SBT)
Scan-based trading enables suppliers to retain ownership of inventory until the point of sale. By providing real-time sales data, this model allows suppliers to monitor stock levels more closely, ensuring proactive replenishment and reducing stockouts.
- Leveraging Advanced Data Analytics
Utilizing advanced data analytics tools helps CPG brands understand consumer purchasing patterns and predict demand more accurately. This insight allows for improved inventory planning and product placement, ultimately boosting on-shelf availability.
- Enhancing Retail Execution with Technology
Deploying technologies like image recognition software offers real-time monitoring of shelf conditions. This technology helps ensure that products are correctly placed and identifies gaps that require immediate attention, enhancing overall in-store execution and availability.
- Strengthening Supplier-Retailer Relationships
Building strong relationships with retail partners fosters better communication and alignment in inventory planning and promotional activities. This collaboration allows for faster responses to market changes, directly contributing to improved OSA.
These strategies optimize on-shelf inventory management and enhance the overall consumer shopping experience by ensuring products are consistently available on shelves.
In the next section, we will explore the role of technology in ensuring accurate on-shelf tracking, focusing on how innovative tools like image recognition and AI are transforming the way CPG brands maintain product availability.
The Role of Technology in Ensuring Accurate On-Shelf Tracking
Technology plays a pivotal role in ensuring accurate on-shelf availability (OSA) for Consumer Packaged Goods (CPG) brands. Tools that provide real-time insights into stock levels, shelf placement, and product visibility allow companies to act proactively, preventing stockouts and ensuring that products are always available when needed. Paralleldots’ advanced AI-powered technology, specifically its ShelfWatch platform, is a prime example of how innovative tools can enhance retail execution.
Paralleldots’ image recognition technology and machine learning algorithms enable real-time monitoring of retail shelves. By continuously capturing shelf images, ShelfWatch detects discrepancies in stock levels and product placement. If a product is misplaced, out of stock, or not positioned according to planograms, the system immediately alerts store teams, enabling swift corrective action. This level of precision and real-time tracking ensures that products are consistently available, properly displayed, and compliant with brand guidelines.
Case Study: Food Products Company
A leading food products company partnered with Paralleldots to improve its on-shelf availability. By implementing ShelfWatch, the company gained valuable, real-time insights into shelf conditions across numerous retail locations. The use of image recognition allowed the company to detect stockouts and planogram violations instantly, which resulted in quicker replenishment and more accurate product placements. This proactive approach led to improved product availability, reduced stockouts, and enhanced the overall consumer experience in stores. To learn more about this successful implementation, visit the case study here.
Conclusion
The gap between OTIF delivery rates and OSA rates underscores the challenges brands face in achieving optimal retail execution. Stockouts, product misplacement, and poor shelf visibility can result in missed sales opportunities and a negative consumer experience, ultimately affecting brand loyalty.
Paralleldots offers cutting-edge AI-powered shelf monitoring solutions that help CPG brands optimize on-shelf availability solutions with real-time tracking, machine learning, and image recognition technology.
Through ShelfWatch, brands can proactively manage their inventory, maintain planogram compliance, and swiftly address stockouts, ensuring products are always visible and accessible to consumers. With solutions that scale across multiple locations and seamlessly integrate with existing retail systems, Paralleldots helps brands transform their retail execution and drive improved sales performance.
If you’re looking to enhance your on-shelf availability and streamline your retail operations, Paralleldots is the solution you can trust. Book a demo today to see how our AI-powered technology can help your brand achieve retail success and ensure products are always available when your customers need them.
