Expiration Date – Wake up from this retail nightmare
Shrink happens in every business, but that doesn’t mean you can’t prevent it. Even loss from expiration dates is something that you can avoid when you start managing your stock more intelligently. Whether your issue is inaccurate stock orders or forecasting demand, data analytics and machine learning are the answer to ending the retail nightmare that is expiration dates.
Understand that Loss is Traceable
Retailers often throw products away due to expiration date and that waste has to be accounted for. “Supermarkets in the US lose an average of US$2,300 per store, per day as a result of out-of-date food that then has to be thrown away,” reports Food Ingredients First.“This results in a US$57 billion annual loss for the US grocery industry alone.”
In some cases, you might be able to use fresh produce, meats, and more to create store-made products for the deli, salad, and carry out sections of your store. In other cases, you might be able to get rid of it through a discount to your customers or as a donation to a food bank. There are even discount stores that specialize in handling these expired, or nearly expired, products but what if you could limit or altogether avoid having to rely on these loss mitigation strategies?
Problems Behind Expiration Date Loss
To solve the retail nightmare of expiration date loss, start by understanding the problem behind the spoiling foods and the lower margins that waste causes. While consumer tastes may change suddenly, or a competitor may lure away your customers with impressive sale prices on popular goods, those issues will always arise. It is the nature of competition in the perishables business. However, the culprit in most cases is not so excusable. Inaccurate stock ordering is generally to blame, and it is utterly preventable.
Solving the Expiration Problem with Analytics
Monitoring the way you store foods will help reduce some loss as will better storage cooler management. Adopting a first-in, first-out approach is a good start, but it is not the answer. Mapping trends works well too, but there is another way. Understand that all loss, especially loss from expiration dates, is traceable – and if you can see where you went wrong, you can prevent it from happening again.
The solution to these problems is to use data analytics and machine learning to manage your inventory more effectively.
Technology – More than a Retail Trend
Technology is transforming the way that modern retail works and it is helping companies like yours preserve margins and reduce waste across the board. This works in a couple of different ways.
- Electronic stock management. When your inventory system is integrated with your POS, you can easily see which products are moving and know when it’s time to order more inventory.
- Dynamic pricing. Through electronic shelf labeling, prices can be automatically adjusted when products get close to their expiration date. While you may not be able to get full retail for the items at that point, you will bring in considerably more than the salvage value.
Get Problem Insights and Prevent Losses
Retail loss from expiration dates may be a fact of business, but it is largely preventable as many others. Understanding the problems behind the shrinkage with the use of analytics and machine learning will help your company improve your margins and save money on the cost of goods sold.
Download “Sell Smart: The Future of the FMCG Market” whitepaper – find out why technology-enabled retail management is no longer a luxury but a necessity.