- Circana
- 5 hours ago
- 5 min read
Thomas Elliot, Senior Director, Business Development
John Kacedan, SVP, Client Sales and Insights
Table of Contents:
It sounds so simple, and it’s always been true in the consumer packaged goods (CPG) and retail world: If a product isn’t available on the shelf at the moment of decision, the sale is lost. Manufacturers and retailers miss an opportunity to increase revenue and, importantly, foster brand loyalty.
Although real-time data may not always be the most practical or even necessary solution, data that is available in near real time, typically daily updates available the next morning, provides visibility across the supply chain that ends at the pivotal point of sale. Such insights provide vendors and sellers with the critical information needed to make decisions without the excessive cost and complexity associated with real-time updates. Here, too, the focus is simple: ensuring product availability drives greater shopper satisfaction. Simplicity.
How Does Near Real-Time Visibility Affect Inventory Management?
It is widely understood that effective inventory management is the foundation of retail success. Near real-time visibility provides the data needed to move from a reactive to a proactive inventory strategy, ensuring the right products are in the right place at the right time at the point of purchase decision.
It’s one thing to get data quickly and another to apply it in the best way. Accessing minute-by-minute updates is less valuable if operational realities, such as labor constraints or product availability prevent immediate action.
Daily data provides a more practical cadence for forecasting, ordering, and replenishment. The critical data points that can be gleaned and effectively leveraged on a daily basis include current inventory levels on the shelf, in the back room and in distribution centers, inbound shipments, minimum presentation levels, and sales and forecast data.
By integrating these data streams into a centralized platform, manufacturers and retailers gain a clearer, more holistic view of inventory flow. This allows for the calculation of key metrics like service levels from the distribution center (DC) to the store, identifying whether out-of-stocks are caused by ordering gaps or fulfillment issues – “Did I order enough, or did I not receive enough?” This comprehensive view helps diagnose and resolve the root cause of inventory problems instead of merely treating the symptoms.
Real-Time Visibility’s Effect on Consumer Satisfaction
For shoppers, satisfaction is based on finding and buying the products they want and need. An out-of-stock is the most significant point of friction in the shopping experience and the primary driver of dissatisfaction: People don’t care why it’s out of stock and expect those responsible for the shelf to figure that out.
Near real-time visibility helps retailers avoid these aggravating out-of-stock situations. Accurate data allows retailers to help their consumers locate items in their stores and, at the same time, improve promotions. For example, if a retailer is running a sale on a product, near real-time data helps ensure sufficient inventory is on hand to meet the anticipated lift in demand. This prevents a common scenario where a promotion drives a stockout, leading frustrated shoppers to switch to another brand, a private label product, or a competing retailer.
Visibility Affects Manufacturing Costs
Near real-time visibility benefits all supply chain stakeholders. For CPGs, this data provides a more accurate signal from the shelf, optimizing demand forecasting and production planning.
When manufacturers have a clear view of how products are selling at the store level, they can fine-tune production schedules. This reduces the risk of overproduction, which leads to excess inventory, waste, and spoilage for perishable goods. Conversely, it helps prevent underproduction, which results in missed sales opportunities and potential stockouts.
The value of this data affects initial budgets as well as ongoing adjustments that need to be made. Instead of relying solely on historical data or aggregated sales team forecasts, manufacturers can use near real-time shelf data to reprioritize what they make and when they make it and where they ship it. This agility allows them to respond to market changes, capitalize on emerging trends, and allocate resources more efficiently.
Near Real-Time Visibility’s Effect on Supply Chain Transparency
Supply chain transparency is built on trust and a mutual commitment to improvement among manufacturers and retailers. Sharing near real-time data is a critical step toward cultivating and maintaining this collaborative relationship.
When retailers share comprehensive data, including inventory levels, sales, and service level metrics, they provide their manufacturing partners with the context needed to help solve problems. The same is true for the flow of information from CPGs to retailers. For instance, a manufacturer may see similar challenges with other retailers and can recommend proven solutions. This transforms the relationship from a transactional one to a strategic alliance focused on the shared goal of improving performance.
For transparency to be effective, both parties must be willing to listen and act on the insights revealed. This approach mirrors the evolution seen with loyalty data, but the impact is more immediate. A failure in the supply chain can halt sales overnight. But conversely, by working together with a shared, transparent view of the data, manufacturers and retailers can build a more resilient, efficient, and responsive supply chain that can resolve issues within days of identification. This benefits everyone, including, and most importantly, the consumer at the moment of decision.
Improve Visibility and On-Shelf Availability for Greater Customer Satisfaction
Circana’s supply chain solutions help retailers and manufacturers improve supply chain visibility and prevent out-of-stocks that cause erosion in sales and shopper loyalty. A centralized, well-managed system ensures that key data is captured, accessed, and shared in near real time, resulting in greater efficiency across operations. Our platform delivers complete supply chain visibility by harmonizing data across retailers, categories, and channels in one flexible, collaborative environment. Beyond our supply chain data platform, Circana can help your team understand the driving forces that impact demand. As experts in consumer behavior, our solutions can be paired to help brands create demand forecasting models, identify key market drivers, and compare forecasts to actual results, so that you can optimize inventory, improve availability, and respond quickly to market changes.
Frequently Asked Questions About Near Real-Time Availability
What is on-shelf availability and how is it calculated?
On-Shelf Availability (OSA) rate calculates the percentage of time that a product is physically available and purchasable on a retail shelf. This metric is a great way for brands to understand physical availability and prevent potential retail leakage by addressing stocking issues. Another way to discuss OSA is through the lens of what percentage of stores have a particular item on shelves.
How can manufacturers track on-shelf availability?
Measuring on-shelf availability requires data to be shared between retailers and manufacturers. Brands need to invest in data collection and organization tools that provide them with near real-time visibility into how their products are performing in stores. Circana’s supply chain solutions take this a step further by providing a holistic approach that empowers brands to take immediate corrective actions.
What is the difference between inventory and on-shelf availability?
On-shelf availability and inventory are measures. Inventory tells us how much product should be available in the store. On-shelf availability tells us how consistently our inventory quantities are filling store shelves and able to fill customer needs. Taken together, brands can identify issues that impact sales and lead to over or under stocked shelves.
