AI Battling Retail Out-Of-Stocks

I recall a related  approach suggested in the enterprise, but the right kind of data lacking,  then the right data applied.  Sounds like a fix found here?  

Can AI solve e-grocery’s erratic out-of-stock substitutions?  by Tom Ryan  in Retailwire

As out-of-stocks became increasingly common in the early months of the pandemic, Walmart’s personal shoppers turned to artificial intelligence to help find the best substitutes.

“The decision on how to substitute is complex and highly personal to each customer,” said Srini Venkatesan, EVP, Walmart Global Tech, in a blog entry. “If the wrong choice is made, it can negatively impact customer satisfaction and increase costs.”

In the past, personal shoppers would determine the best substitute themselves, but Walmart found nearly 100 different factors can go into that decision. Mr. Venkatesan added, “Trying to account for all of these would not only be too difficult, but it would also be incredibly time consuming.”

The AI technology uses hundreds of variables — including size, type, brand, price, aggregate shopper data, individual customer preference and current inventory — to determine the next best available item. It then preemptively asks the customer to approve the substituted item. Whether the substitute is approved or rejected, the information is fed back into the AI’s algorithms to improve the accuracy of future recommendations. Following the technology’s deployment at Walmart, customer acceptance of substitutions increased to over 95 percent.  ... " 

Answers for the Bullwhip Effect

A classic problem with supply chain predictability.  Often covered here.  Oracle and Retailwire provide a survey and means to  approach to address it.

Reverse the Supply Chain Bullwhip Effect

The entire supply chain has been upended by the pandemic. Flexibility and resiliency will be critical for retailers as they move forward.

With the onset of the COVID-19 crisis, shopper panic buying imposed severe stress on supply chains, resulting in significant out-of-stocks. What resulted was a bullwhip effect — an increasing supply chain error that creates false supply and demand fluctuations — disrupting not only retailers but also distributors, manufacturers, and suppliers.

In this whitepaper, you'll learn how retailers can better manage their supply chains, meet today's consumers' demands and, ultimately, "Reverse the Bullwhip Effect".

  Get their whitepaper here: Reversing the Supply Chain Bullwhip Effect

By Oracle Retail

Wal-Mart Going More Robotic

Note in particular the emphasis on out of stocks.

Walmart Expands Its Robotic Workforce to 650 Additional Stores
Shelf-scanning devices aim to help reduce out-of-stock items that collectively cost retailers a trillion dollars a year.  ... " 

By Matthew Boyle in Bloomberg

Amazon Debuts Dash Smart Shelf

If pushing the Dash Button was too hard for you, here is the next reordering play from Amazon, the smart shelf that automatically reorders when a shelf has less than a given weight of product.   Unless you are very tidy about where things are put, this is more of an office thing.   And there too,  I have often see many less organized offices.  They have thought ahead  about temporary changes in stock. Perhaps a narrower demand profile than expected.   We did test weight triggered solutions on store shelves to signal out-of-stocks in Grocery.  This further adds another Amazon Alexa presence to the office.  In the link below, pictures of its suggested uses.

Amazon debuts the Dash Smart Shelf to gain a bigger presence in the office   By Maria Deutcher in SiliconAngle

After getting its Echo smart speakers into tens of millions of homes, Amazon.com Inc. is now hoping to establish a bigger presence in the workplace. 

The company on Thursday pulled back the curtains on the Dash Smart Shelf, an internet-connected scale for businesses that automatically reorders office supplies from Amazon when they’re about to run out. Users can place common items like printer paper, pens and notepads atop the device. When the Dash Smart Shelf senses that the weight drops below a certain level, it will purchase a fresh batch of whatever office suppliers it’s holding.

There’s an alternate setting that companies can select to have the scale notify the office manager instead of placing orders on its own. To prevent accidental purchases, Amazon has designed the onboard software to detect if supplies are temporarily removed by a worker.

The Dash Smart Shelf comes in three sizes ranging in size from 7 inches by 7 seven inches to 18 inches by 13 inches. All the versions are one-inch tall and can be powered either via a wall plug or four AAA batteries.  .... "

Cutting Out of Stocks: Reality and Perception

A favorite topic.   Availability is essential to support marketing, else whats a shelf placement for?   Thus too while online works well.

Stores have cut out-of-stocks. Why don’t consumers know that? in Retailwire  by Andrew Blatherwick

Research shows that online retailers have significantly lower service levels when compared to traditional retailers that operate warehouses and stores. Still, the perception persists that Amazon.com can quickly and efficiently deliver any product to your doorstep, while brick-and-mortar retailers constantly run out of stock on items. Why the disconnect and, more importantly for traditional merchants, how do you overcome that perception?

The perception disconnect is rooted in the fact that customers have grown accustomed to high availability as retailers have improved their supply chains and technology over the last 20 years. For physical retailers, an out-of-stock is as clear as the hole on the shelf. It’s tangible, and shoppers experience a time delay in acquiring the out-of-stock item — whether by visiting a competitor’s store or placing an order online.

While ecommerce customers may be unimpressed by poor availability, they are far less inconvenienced because switching to a competing online retailer takes just a moment’s time and a few mouse clicks. The negative impact on long-term loyalty in the ecommerce scenario is lower because it’s easier to shop multiple online retailers than multiple traditional retailers.  ... ."

Wal-Mart Mobile Out of Stock App

We developed a similar mobile App on a Blackberry , and tested it in multiple retail settings, but before home ordering/shipping was common.   Consider how this could be integrated with predictive sales and pricing analysis. The idea has been frequently covered in this blog.   How similar?

 Walmart gives associates a tool to deal with out-of-stocks
by George Anderson in Retailwire

Walmart is not known for having large numbers of associates on its sales floors, but it may need to add more if a new tech tool for workers becomes popular with customers during the holiday season. A new mobile app feature enables Walmart associates to search walmart.com for items not sold at their location, order the item for customers and have it shipped free to a customer’s home or to the store for free pickup.

The retailer claims that one of the best features of the mobile app tool is that it provides a variety of payment options. Once an item is ordered, customers are given a receipt. They then can go to any checkout in the store and pay with cash, check, credit or debit card as well as Walmart Pay.  ... "

Wal-Mart's In-store AI Lab

Useful to do this in a real operating store.   Many of details of  technology and analytics delivery are best seen in the messy operating world of retail.  We tried to quickly move our laboratory tests to real stores.   Also makes sure you get it right for both associates and shoppers and physical context.   The 'low stocks on shelves' detection was a common challenge.

Walmart puts AI to the test in an in-store lab    by Tom Ryan in Retailwire with expert comment.

Walmart is opening a laboratory inside a small Walmart in Levittown, NY to test artificial intelligence (AI) applications for both associates and shoppers.

The Intelligent Retail Lab (IRL), according to TechCrunch, will see how AI can be used to identify low stocks on shelves, when items are on the wrong shelf and spillages. Walmart is also looking for a better understanding of when shopping carts are running low near the store’s entrance, according to the report. 

Hardware, software and other equipment have been installed, but the lab is not yet operational. IRL is part of Walmart’s incubator Store No. 8. and being led by the Kepler Project. The Kepler team, according to past reports, is also testing computer vision and cashier-less technologies similar to the Amazon Go experience.

In late October, Sam’s Club said it was opening a cashier-less concept in Dallas that enables shoppers to use its Now app to not only pay for purchases, but access smart shopping lists, store maps and augmented reality tech to access product information. Like IRL, some features support store operations.   ... " 

Online Out of Stocks

One of our key exploration areas.   Including mobile assistance to instore personnel.  How diffiecult if the problem online?   Stronger communications or connections to fulfillment?

Study: Online retailers losing billions in sales to out-of-stocks    by George Anderson in Retailwire

Out-of-stocks are a problem for retailers that may be almost twice as bad online than in stores. That’s the conclusion of new research from the Grocery Manufacturers Association (GMA), which found sites across the globe could be losing billions in sales every year because products aren’t available online when consumers wish to purchase them.

The report, “A Worldwide Study of Extent, Shopper Reactions, and Implications for Non-Food Online Retail Categories,” written by Daniel Corsten, professor of operations and technology and IE Business School, and Thomas Gruen, professor of marketing at the University of New Hampshire, tracked online product availability of baby care, fabric care, hair car, oral care, skin care and shaving products on websites operated by retailers in China, France, Germany, Japan, the UK and the U.S.

“This is one of the first studies on online availability after previous reports over the past decade studying on-shelf availability and its effects on consumer purchasing patterns,” said Keith Olscamp, director of industry affairs and collaboration at GMA, in a statement. “The findings should encourage retailers and brands to collaborate and enhance online availability in the fast-growing area of online retail.”   ... " 

Robots Patrolling Walmart Aisles

More on Wal-Mart's Bossa Nova Robotics.  Value and customer impact.  Once again out of stock transparency leads the march for such technology.    We examined many approaches to address this.  Interview.   But once the robots are there, what other capabilities can be leveraged?  Customer reaction is also important, have been in retail lately where order assembly carts started to crowd the aisle, have to watch for that dynamic.

Walmart’s new robots are loved by staff—and ignored by customers
Bossa Nova is creating robotic coworkers for the retail world.   by Erin Winick in Technology Review

Walmart may be grabbing headlines for its embrace of cutting-edge technologies, but at the heart of those changes are companies like Bossa Nova. The San Francisco-based robotics firm created the robots now roaming the aisles in 50 Walmart locations around the US.

Bossa Nova’s robots are able to perform tasks such as identifying when items are out of stock, locating incorrect prices, and detecting wrong or missing labels. We spoke to Martin Hitch, chief business officer at Bossa Nova, about the technology behind the machines and how they are being received by shoppers and employees. .... " 

Wal-Mart Testing Shelf Scanning Robots

 Now have seen several applications of store roving and shelf scanning robotics.   The need to get yet better data about the state of retail continues to expand.   Only way you can completely optimize your layout.  Make sure your  most profitable goods are  on shelf.  It will provide better data for more powerful analytics.   See my many posts on the concept.

Walmart is testing out shelf-scanning robots in 50 stores In  Fastcompany, via Engadget

Autonomous robots are taking over Walmart. Well, they are at least taking over more than a few locations. The behemoth retail chain is testing out shelf-scanning robots in more than 50 stores. The devices make sure items are in stock and priced correctly, according to Engadget.

This is all part of the company’s plan to innovate in the coming years. At our Fast Company Innovation Festival this week, Walmart e-commerce division CEO Marc Lore talked about the company’s forays into robotic technology. Beyond these shelf stockers, the company is also researching voice technology to make it easier for consumers to chat with a robot and purchase the things they need. “It will allow them to shop in a very conversational way with a robot … and that robot will know you as well as your mom or dad,” he said.  .... " 

And more with considerable discussion in Retailwire.  With Video.
And in Reuters.

A Conversation on Smart Shelves

This work by Hitachi covers many of the experiments we did with the smartshelf.  Is it smart enough to make a real difference?  Finding new patterns of use may find better ways to use this data.

Will Smart shelves ever be smart enough for Kroger and other retailers?
by Tom Ryan

In an interview with The Wall Street Journal, Kroger CIO Chris Hjelm said the supermarket’s test of smart shelves has reached 14 locations.

With Kroger’s mobile app open, sensors detect shoppers in aisles to offer personal pricing and product suggestions. “I can highlight products for you on a high-definition display on the shelf edge,” said Mr. Hjelm.

As examples, he noted how a gluten-free shopper might find relevant products highlighted in the nutrition-bar section. Shoppers might receive their “personal price” or hear a ping to alert them that a bottle of wine from their shopping list is on a nearby shelf, he said.

Smart shelf proponents also tout their ability to facilitate automated pricing changes as a huge labor-saving advance. They also promise on-demand nutritional information updates.

Some smart shelves can measure inventory life or identify when shelves are running low on product or empty. Using a solution from Powershelf powered by Microsoft Azure, Giant Eagle has reduced its out-of-stock replenishment time by two-thirds and cut its out-of-stock SKUs by 50 percent on any given day, according to Microsoft. .... " 

Targeting Physical Out of Stocks

Seen a number of related methods,  this PG article looks at methods that combine image recognition and robotic methods.    We also looked at a method that could use streams from security cameras to count shelf items to address planogram compliance and detect out of stocks.    I liked the idea of multi-tasking.    Further in Progressive Grocer. 

On Shelf Availability

A common measure in retail.  Out of stocks    The ability to select replacements for your regular buy. A customer lost potentially forever?   Then what is the bottom line.

Shelf Scanning Robotics

A little scary in the aisles.  We sought to re purpose security cameras to do this kind of thing.  Also crowdsourced the governance of shelves with cameras. Note the analytics and auditing mentions.

Robot Makes Sure Stores Don’t Run Out of Doritos
A shelf-scanning bot called Tally will help make sure everything is in its place in supermarkets and other retail outlets. ...   The robot, developed by a startup called Simbe Robotics, is the latest effort to automate some of the more routine work done in millions of warehouses and retail stores. It is also an example of the way robots and AI will increasingly take over parts of people’s jobs rather than replacing them. ... " 

" ... Introducing Tally ... The World's First Fully Autonomous  ... Shelf Auditing & Analytics Solution .. " 

GMA Out of Stock Report

Well done report, with lots of useful statistics and guidance.

" ... FMI/GMA Trading Partner Alliance report: Solving the out-of-stock problem ... Out-of-stocks remain at an 8% average rate among food retailers and manufacturers, according to a joint study released by the Grocery Manufacturers Association and the Food Marketing Institute as part of their trading partner alliance. The JDA Software-facilitated study offers guidance on solving the concerns of on-shelf availability that extend well beyond lost revenue  ... "

Compliance on the Shelf

I have recently have been looking at applications of compliance. The application to shelf spaces has been a long term interest, see the thread links below.  Retailwire discusses the obvious, that image taking is making this easier than ever, and can be used to understand the physical status of the shelf. Advanced data analysis methods can make these same images efficiently understandable to decision makers.

Moose Mobility for CPG Sales Solutions

Spoke today with MooseMobility.  An acronym for
Mobile Out-of-Stock Ordering Sales Electronic Application.   " ... Enabling Solutions for your Mobile Sales Force ... Moose Mobility develops ‘End-to-End’ mobile solutions for use with smartphones and tablets that improve the productivity and profitability of the front line sales teams in the Consumer Packaged Goods (CPG) industry.... " .  See much more detail at their site.  Contact for exposure to some very powerful mobile solutions.

Wal-Mart Optimizing On-Shelf Availability

Another example, in Progressive Grocer, of how Wal-Mart is active in analytical methods.  " ... A new service from Plano, Texas-based sales and marketing services company Crossmark, is helping manufacturers to better address the challenge of a product’s on-shelf availability at Walmart stores. Called OSA Now, and developed by Plano, Texas-based Crossmark, the solution uses sophisticated algorithms -- customized for each supplier -- to identify store/item combinations that have a high likelihood of having an OSA problem. Typical issues include out-of-stocks, incorrect on-hand inventory, or products that are not on the planogram.... " 

How P&G Leverages Downstream Data

On how P&G uses a major source of Big Data, from Point of Sale:
Focusing on store-level data enables CG companies to win in modern retail. Here, a member of Procter & Gamble’s Retailer Connect Program candidly reveals how the company is using POS data to identify out-of-stock/zero sales incidents and then act in store to fix those opportunities and drive sales.... " 

DemandTec Connects Weather and Planning

I have followed the idea of connecting accurate weather forecasts to planning and forecasting for some time.  We watched as Wal-Mart did some early work  to include this form of intelligence to minimize out-of-stocks and demand inaccuracies due to weather conditions.  In the past forecasts were too poor to use this kind of planning augmentation, but improvements in weather modeling have advanced accuracy considerably.   Eliminating this form of noise in a forecast is a powerful idea.  I see now that DemandTec has integrated weather forecasting into their offerings:

" ... DemandTec, Inc. the collaborative optimization network for retailers and consumer products companies, today announced the availability of Weather Trends on DemandTec, a new network partner app providing highly accurate, long-term temperature and precipitation forecasts on a global basis for the DemandTec customer community ... "Our research shows that a shift of just one degree in temperature can drive vast changes in sales activity," said Jack Grum, Executive Vice President and Co-founder of Weather Trends International.  "We are excited that the DemandTec network community can now incorporate predictive weather intelligence into their merchandising and marketing decisions."  .... '

I plan to follow this development more closely and post about it further here.