In recent years, the dramatic rise in cost of goods has sent inventory investment soaring, tying up capital that could otherwise fuel growth, innovation and strategic investments across convenience retail.
That's according to Richard Poye, head of retail strategy and engagement at VideoMining, a market research and retail analytics company based in State College, Pennsylvania. Poye spoke June 24 at CSP’s Center Store Forum outlining four strategies to rethink inventory management.
Those strategies are:
- Streamline inventory: Proactively manage SKU count and optimize days-of-on-hand inventory.
- Refine assortment: Leverage planogramming, stay on trend and focus on unique, differentiated and ownable products.
- Enhance merchandising: Build multi-category baskets, focus on adjacencies and increase inventory throughput.
- Leverage promotions: Drive throughput, attract and retain customers and maximize funding for promotions.
Driving throughput, being competitively differentiated and having consumer relevancy are key when it comes to reimagining how inventory is managed, Poye said.
“Don’t be a copycat,” Poye said. “Establish an assortment that is distinctive.”
Poye emphasized that point-of-sale (POS) data alone creates blind spots. While POS records what was sold, it cannot capture what shoppers saw, ignored, almost bought or why they abandoned them, he said.
“Build category structures on observed behaviors so the shelf is aligned with how shoppers actually make purchase decisions,” he said.
Traditional market research solutions are “too limited,” Poye said, but behavior insight analytics can reveal how aisle layouts influence navigation patterns and impulse buying.
Poye said it can also reveal how specific demographic profiles and shopper segments interact differently with a given category; how product attributes drive quick purchasing decisions; how brand-led decisions are made at the shelf; and how small planogram tweaks yield stronger returns.
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