The Shelf & Its Data Never Lie | 5IM

Foreigning us now for five insightful minutes is Caitlin Allen.

Caitlin is the SVP of market at Symby, and Caitlin is here to discuss how shelf intelligence can give retailers a key insight into more than they would ever expect.

All right, Caitlin, let's start with this.

Simbi just released its latest edition of the Simby Index dollar diving deeper into back to school shopping trends.

What is this Simbi Index, first of all?

And what are the shelves actually telling us about the season that is upon us, that being back to school?

Well, thanks for having me, Chris.

So I actually think the interesting, the most interesting part is not about back to school, but what shelves are telling us about retail as a whole.

So to answer your question, the Simbi Index is essentially a real time pulse check on physical retail.

And it's built from more than 45 billion images from the shelf that are captured across retailers around the world in almost a dozen countries.

And instead of looking after the fact that what's been sold, it shows what's actually happening on the shelf while shoppers are making decisions.

And, you know, I think we could all agree that the shelf is like the final delivery point of the entire retail ecosystem.

And last year what we found out was that tariff concerns pulled demand way forward.

Nearly three quarters of shoppers started earlier because they were worried about future price increases and refill rates declined.

So store stores last year were able to replenish only 30% of empty shelves in early July, compared to 46% the year before.

And as you can imagine, out of stocks climbed as the season progressed.

So this year, obviously, inflation is continuing and Amazon Prime Prime Day was pulled forward and effectively kicked the season off even earlier.

So we're starting to see that many shoppers are moving into back to school buying much earlier in July instead of waiting.

And what this tells us is that effectively, retail is becoming less driven by forecasts and is really shaped by real time reality.

And winning in that context means knowing exactly what's happening on the shelves minute by minute.

Wow, that's, that's, that's an angle that I never have ever, ever even thought about.

I think the financial community is going to love that too, because what, you know, what you're saying is you can see the behavior of, of the consumers in real time and the ability of the retailer to react to that macroeconomic influence on the consumer.

So that's crazy, Caitlin.

All right, so, you know, tariffs keep coming up as a factor.

You know, we hear it here, it's impacting shopper behavior all the time.

Like go into that a little bit more for us.

So where are you actually seeing the pressure show up on shelves?

It's in different places where supply chains are under the most pressure, Chris.

So last year the early signal showed up in high import categories like apparel and footwear and school supplies and outdoor recreation.

And so commodity items like pens and pencils saw out of stocks climb more than 50%.

And foot, your foot year footwear was up 17% year over year.

And you know, to me the points, not so much about tariffs.

Macroeconomics are arguably always going to happen, whether it's tariffs, inflation, you know, what have you.

What matters is understanding where those pressure pressures are showing up on the shelf early enough so that stores can respond rather than discover that they are, you know, they've been behind weeks after the fact.

And so they this year we're obviously watching things like apparel and footwear and electronics closely.

And I think the categories that will likely be the canary in the coal mine, so to speak, are the ones that are going to be impacted by another volatile back to school season that's influenced by the supply chain.

Right.

And right.

And how quickly the retailers can actually react.

So given what you just said, what does that tell our audience about where retail operations are potentially breaking down, if anywhere?

Yeah, I mean, having eyes into what's happening at the point of customer decision is what matters.

And I said this earlier, every forecast, every purchase order, every distribution decision, it ultimately has to show up on the shelf.

Right.

Like when a shopper reaches for that item or orders it online.

And the problem is that despite billions that have been invested in digitizing our supply chain, the shelf's historically been the least visible part of it.

And you know, in store efficiencies, according to a new research report from Coresight show that that about $200 billion are lost every year to these inefficiencies.

And you know, the data or the transactional data that we've done a lot to try to capture is important.

But so is, and maybe even more so is the observational data that gives us a reliable view into what's actually happening on shelves and in our stores.

So, you know, talking about order fulfillment breaking down, it's, you know, it's sexy to think about like, oh my Alexa could talk to my smart fridge and order my groceries for me.

That's not going to work if Alexa and your smart fridge are ordering groceries for you, but then the things that the grocery thinks are on the shelves actually aren't there.

Right, right.

Yeah.

And the merchant.

The merchant and the retailer in me too, like thinks about, like when I'm, if I'm, if I've got this type of data and I'm looking at it longitudinally, year over year, there's actually new inventory metrics that come into play too.

Like I could actually think about, like, what is my time?

How long are my outs on shelf this year relative to last year?

Like, how long did it take me to replenish or refill an out and am I getting better at that or is it getting worse?

And that should signal categorically where I have issues and direct my supply chain team to fix them.

So I'm curious, Caitlin, you mentioned the coresight.

You know, they've, they've also said that technology investments at an all time high.

So if that's the case, why are we still seeing these issues then?

Yeah, it's such a good question.

And I think the siren song is that more technology automatically leads to better outcomes.

What the report effectively found is that retailers are involving or investing in the right technologies just in the wrong sequence.

You have to have shelf data as the foundation for other store technology to produce the ROI to that, the that the business cases that are put together predict.

And so the core site report stance effectively is that the retailers that are winning with technology have flipped the sequence and they invest in shelf digitization first and then everything thereafter produces the ROI that's intended because of that initial investment.

Wow, this is great stuff.

All right, so.

So let's say, let's say I'm a retailer and I get that sequencing right, Then what does the payoff actually look like, Caitlin, to you?

Yeah, I mean it starts with better execution, Chris.

And like, of course it also impacts sales and mar.

But why.

What it really impacts is why retail exists in the first place, which is serving the shopper and empowering the associates.

So, you know, measurable results that we've seen across our client base.

Schnooks has reduced out of addressable out of stocks by 30%.

BJ's has improved picking efficiency by 40%.

BNR stores has given associates up to 30 hours back a week to focus on shoppers.

But I think the bigger story is that what retailers are building is a trusted source of truth for them to work better with their partners to serve the people that they care about in their ecosystems.

Yeah, I love the inclusion of the employees in there.

That's really good stuff.

All right, well, thank you, Caitlin.

That was really insightful.

Thank you, Chris.

Always good to be with you.