Helping retailers take care of their biggest issue

23 May, 2017
Hendrik Bredenkamp, MD of XON Retail

By Hendrik Bredenkamp, MD of XON Retail

Customers don’t care why your retail store doesn’t have what they’re looking for. They may get annoyed or irritated but they often don’t bother asking why, they just go to a competitor. Exposing customers to this failure means losing a sale, which is bad enough, but could also mean losing a customer for life, which costs a lot more.

It is crucial to have control of your stock levels. And, even though there are other reasons to put electronic shelf labels (ESL) in your store, it’s now the primary reason why retailers do so.

It makes sense. You can’t sell stock in storerooms and definitely none sitting in the warehouse. It has to be on your shelves. And customers repeatedly finding out-of-stocks go elsewhere and take their impulse purchases with them.

Shrinkage is another major issue in labour-intensive operations where human error complicates the process of comparing delivered stock against sales and shelf stock levels. It can be difficult to detect theft when you have manual systems covering in excess of 20 000 SKUs. Damaged or destroyed product can be more quickly identified when you use ESL and, more importantly, the reasons for its damage or destruction fixed much quicker.

You can also immediately identify high rates of sale so you can place additional orders and not run out of stock. It could be Heritage Day’s Braai Day, a toy fad for kids, or just a popular local’s birthday party. Collecting accurate data over time will also help your improve your stock control.

ESLs also help planograms so, while you have the stock for customers to buy, it’s also available to them where they are most likely to make the purchase decision.

You won’t need so many expensive, time-consuming stock-takes to ascertain and fix many of the problems in your store – time you can instead spend offering product to customers.

And tight control of your stock management also gives you tighter control of your financial processes and helps you meet financial goals better, quicker, and more effectively.

But the top reason why retailers haven’t all put electronic shelf labels in their stores? They say it’s expensive. And that was true in the past but not any more.

Newer ESLs may be more capable than the earlier models but not every retailer needs the enth-degree in digital integration to drive heat maps, task-to-light, click-and-collect, and other omni-channel strategies. Many retailers are more interested in taking care of the pragmatic issues their managers, employees, and customers face on a daily, weekly, or monthly basis. Stock control is probably the biggest issue right now.

So we’re taking used ESLs from retailers in Europe, for example, and refurbishing them for local reuse. They get a full physical and electronic examination in our ISO-certified facility in Midrand and we’re able to put them back into circulation at just R37,50 a label. That’s less than a 2L milk and a loaf of bread and with an annual warranty that costs the same as a plastic bag (at retail) they’re a safe bet.

The solid-state electronics mean we swap out faulty units and they’re battery operated so they keep going during power failures. The batteries last between five and seven years so they’re seldom replaced and even when they are it takes less than seven seconds to replace so it’s done without interrupting shoppers.

There really isn’t any reason why retailers can’t take advantage of the benefits of ESL for many reasons including the improvements to their stock control.

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