Taking stock of the inventory management battleground

Competition is heating up among technology providers to supply retailers with cutting edge solutions that can help them seriously boost their revenues through improved inventory management and potentially eradicate out-of-stocks.

Red McKay, global VP of sales at Bossa Nova Robotics, says: “The biggest issue for large grocery businesses is on-shelf availability. There can be hundreds of millions of pounds of savings for retailers by simply filling gaps on the shelves.”

The evolution of artificial intelligence (AI) and the improved capabilities of computer vision has led to a variety of rival solutions emerging that each argues it has the superior technology that can give retailers the edge in solving this massive issue of poor availability.

Although they all involve running the collected visual data through algorithms to determine and manage stock levels on the shelf they very much differ in how they go about collecting the images.

Bossa Nova has a robot-based solution that is currently moving up and down the aisles of around 1,000 Walmart stores in the US scanning the shelves for out-of-stocks as well as misplaced items and other compliance issues. McKay says the technology achieves accuracy of around 90% for on-shelf availability compared with a mere 40-60% when handled manually.

In-store drones

To further enhance the scope of the solution McKay reveals the technology will also be placed in other forms – which will likely include drones and much smaller robots for operating in compact stores: “The visuals, analytics and the data from this could be put into various forms.”

A drones-format would very much pitch it up against Pensa Systems whose autonomous devices are whizzing around the stores of a number of US and European retailers taking video footage.

To enhance its capabilities Richard Schwartz, CEO of Pensa Systems, says a mobile app has been developed to enable employees to undertake many intra-day scans using their phones’ cameras. When these images are combined with the visuals from the drones then a much richer picture of the inventory can be achieved.

“The mix and match of drones and mobile phones helps us better detect out-of-stocks. We’ve found it has helped us find several percentage points of stock-outs higher than the retailers thought they had. We’ve also seen 30-40% are hidden stock-outs where there were no actual gaps on the shelf. Lots of decisions are currently being made on false data,” he says.

Schwartz questions some of the investments being made in this area by others as he believes their technology is lacking. “For cameras on the roof and robots on the floor you need the right view otherwise there is no accuracy. High ceilings and tight aisles mean you won’t get the full picture and the real accuracy,” he argues.

Executives at Israel-based Trigo also have reservations about the quality of the accuracy of rival solutions. Its computer vision-based product tracks inventory as well as people in-store. This puts it up against the mighty Amazon and its Go stores that aim to provide a seamless check-out free environment.

Store mapping

On the front-foot Isaac Banon, business development manager, Trigo, says Amazon has packed in various layers of hardware into its bespoke stores including ceiling-mounted cameras and shelf sensors in order to “compensate for gaps in its technology”.

In contrast Trigo relies primarily on ceiling-mounted cameras – with a very small number of shelf sensors for tracking certain products – and runs the visual data through its algorithms to map the stores in 3D co-ordinates. This enables it to track the movement of both inventory and people within very compact environments as well as large units – not just within small purpose-built stores.

“This type of mapping of the stores enables us to operate in dense environments. This differentiates us from the others and requires complex algorithms, which we believe are necessary [for the best solution]. We can also retro-fit existing retail stores,” says Banon.

Folling investment from Tesco, the supermarket titan is among the companies undertaking trials with Trigo. It has created a test site at its head office before it considers putting the technology into a regular store. “We’re in a Tesco store but it’s not open to the public. We’re now in the testing phase with them,” he explains.

Trigo like its competitors is confident that the market opportunity is huge for technology firms in this field as it ultimately improves the experience for shoppers. Not only because of the improvement in inventory availability but also – for some providers – there is the opportunity to potentially remove one of the big pain points for many people – the checkout.