SOLUTION BRIEF

Inventory Management
Retail Solutions

Using Retail Marketing Data to

Help Curb Inventory Distortion
Using Intel® architecture-based solutions, global retailers are reducing costly out-of-stocks and
overstocks while improving customer satisfaction and profitability.

Introduction immediately go to a competitor’s store to

Digital technology is providing retailers with find an out-of-stock product. Forty percent
unprecedented amounts of real-time data about admitted they would make fewer future trips
shoppers and what they’re buying, or not buying. to the original retailer because they have little
The challenge facing retailers is to effectively tolerance for out-of-stock situations.2
analyze this data in ways that can help • Overstocking products is similarly costly. To
overcome some familiar operational hurdles. move excess inventory, retailers traditionally
High on that list is inventory distortion, a rely on deep discounting to increase sales,
problem costing retailers worldwide nearly cutting into already slim margins.
USD 1 trillion a year. To help retailers reduce Inventory distortion from out-of-stock and
problems related to out-of-stock and overstock conditions takes a huge toll on
overstock situations, Intel is working with a retailers globally. Losses are now at USD 818
number of partners around the world to develop billion a year worldwide from this problem
These powerful new retail intelligent solutions that put inventory control and are increasing at the alarming rate of
solutions not only offer better back into the hands of retailers. USD 50 billion a year.3

inventory control, they can also Costly Complexities Balancing inventory requirements for both brick-
and-mortar and online channels is made even
link inventory data to marketing Across the retail industry, managing inventory
more challenging by new consumer practices
efforts to substantially enhance in recent years has become increasingly difficult
such as showrooming, where shoppers examine
and expensive due to the transformation in
promotional effectiveness, shoppers purchasing patterns. They enjoy
merchandise in a store and then make the
purchase online, often from a competitor’s site
reduce shopper dissatisfaction, unprecedented access to product selections and
for a lower price. The downside is doubled for
can make purchases anywhere and anytime. As
increase sales, and improve the brick-and-mortar retailer—not only has the
a result, retailers find it harder to forecast and
marketing’s return on investment. sale been lost, but the retailer still sustains the
maintain optimum inventory levels.
high cost of maintaining inventory.
• Out-of-stock conditions are a direct cause
Meanwhile, increased product competition and
of lost sales and consumers’ top-ranked
shorter product life cycles further confuse
complaint. Retail Information Systems News
inventory management. Predicting the products
found in 2011 that 73 percent of shoppers
consumers are likely to buy is complicated when
surveyed said it was their biggest complaint.1
new models are launched throughout the year,
And the bad news doesn’t end there.
and customer-preference data is insufficient to
• In a similar survey from Sterling Commerce, help determine optimum stocking levels for this
43 percent of respondents said they would parade of new products.
 Traditional point-of-sale data alone has proven • Innovative inventory-monitoring systems
insufficient in overcoming these supply-chain can instantly adjust product pricing, from
problems. But now, with the spread of powerful shelves to websites, to reflect overstock
devices employing digital and mobile technologies, conditions as well as to determine product
retailers can collect and analyze a wealth of promotions for display on kiosks, aisle end-
customer data to help avoid the rising costs of cap displays, and interactive video walls to

USD 818
inventory distortion. promote sales of overstocked items and
further help minimize inventory distortion.
Compelling Displays, Collecting Data

BILLION
In an era of Big Data, the information digital devices
To help retailers better manage their inventory,
collects can be combined with other business
Intel and its partners are developing a new
intelligence to gain a deeper understanding of
— annual worldwide generation of technology solutions that can
customers and their purchasing preferences. The
loss caused by provide important inventory-related data.
benefits of collecting and analyzing this wealth
These solutions are on the leading edge of
Inventory distortion digital display technology, with proven benefits
of data can help optimize store layouts, product
placement, promotion, and pricing in addition to
from out-of-stock or for shoppers and retailers alike.
improving inventory management.4
overstock conditions For consumers, digital technology is helping create
the seamless shopping experience they demand. Linking Marketing and Inventory
In stores, it can greet them with captivating, A key to reducing inventory distortion is
high-definition video displays depicting every tightening the data relationship between
nuance of a product. Using interactive touch product marketing activities and product stock
screens, they can examine various product levels. The marketing side of the equation can
models and features, view specifications and track customer behaviors related to specific
product reviews, and determine models and products and relay the information to the
pricing, as examples. Through widespread warehouse. There, inventory systems can
deployments and repurposing of rich content, detect pending threats of under-stocking or
the in-store and online experiences become over-stocking and can relay the information
more consistent, bolstering the retailer’s brand. back to the marketing side, where promotion
and pricing can be—often automatically—
Aside from captivating and informing shoppers,
adjusted to head off costly distortion.
these vibrant displays can supply retailers with
never-before-possible amounts of data regarding Intel and its partners worldwide are focused
shoppers and their behaviors—data that can help on developing technologies and intelligent
retailers strengthen their brands and bottom lines: solutions for the retail industry that can collect,
analyze, and manage new sources of data to
• Equipped with cameras, sensors, and touch
strengthen marketing activities and, in the
screens, these content-rich displays can track
process, improve inventory controls.
gender, age bracket, dwell time, preferred
models and styles, favorite features and Here are several examples of in-store solutions
colors—a wealth of customer-anonymous data that use Intel-powered intelligent systems in
that can help retailers refine their marketing highly effective ways:
efforts while overcoming inventory challenges.
Luring with Labels
• Digital data-collection devices can be deployed Intelligent shelf solutions attract and inform
throughout the retail environment, from shoppers, which can lead to increased sales.
intelligent detectors that ensure optimum As an example, digital shelf labels can display
product placement on shelves, to sophisticated product prices, promotional messages, and
point-of-sale terminals that analyze post-sale even video clips, all in eye-catching formats.
stock levels, all valuable to managing inventory.

2
Shoppers at METRO GROUP, the world’s fourth- Optimizing New-Product Inventory With this solution, retailers can target
largest retailer, can learn about new offers Aligning inventory levels with customer demand overstocked inventory for special offers,
and products at end-cap displays. Shelf labels is especially challenging for retailers when whether price reductions or simply increased
with LCD modules for displaying price, product dealing with new products, where historical promotion of the products. Customer
information, and high-definition video are located sales and stocking data are lacking. A solution responses are quickly captured and analyzed
adjacent to featured products to more effectively targeting this problem is being utilized in China to assess an offer’s effectiveness and to
attract the attention of shoppers. At METRO to track customer preferences related to new enhance related promotional offers, all while
GROUP, data from intelligent shelf solutions can models of Ultrabook™ devices, an especially motivating customers to make purchases.
be managed with content management systems rapid-growing class of mobile computer.
Making Inventory Virtual
running Intel® Core™ i7 processors.
Suning Appliance, China’s largest electronics New digital-display solutions are addressing
Intelligent shelf solutions are especially effective chain, gathers customer-preference data with showroom and inventory challenges for retailers
with items such as new dairy products, where large, high-definition touchscreen kiosks. Here, who sell large appliances, such as refrigerators
failure rates are high because shoppers are shoppers view compelling images of Ultrabook and televisions. These items often remain on
reluctant to try them. With these vibrant shelf devices, learn about features, and specify their the store floor or in local inventory for 100 days
displays, shoppers are alerted to the new model and feature preferences. The kiosk is or more, greatly increasing the capital cost of
products through multimedia and targeted equipped with the Intel® Audience Impression inventory. They also consume valuable floor
promotional messages. Metrics Suite (Intel® AIM Suite) to collect and space and carry a high risk of damage, as well as
analyze customer data, such as gender, age higher logistical and transportation costs.
Intelligent shelf solutions give retailers the
range, and dwell time.
ability to simultaneously send content and Intel has partnered with augmented-reality
revision to thousands of LCD-based labels, thus Analyzing this data helps forecasters optimize specialist YDreams and social-media application
lowering the costs associated with updating inventory and more closely predict the appeal developer Betapond to create an intelligent
price tags throughout the store. Plus, retailers of products yet to be introduced—two key digital solution that harnesses the flexibility
can remotely monitor and make repairs, usually methods of helping avoid costly understocking of e-commerce while offering the immediacy
eliminating the need for onsite service visits. or overstocking. of in-store product comparisons, all delivered
Another significant benefit of this solution— through an immersive digital experience.
Ensuring Shelf Compliance
Another intelligent shelf solution Intel has helped which Shanghai Six Sense Technology Company This interactive in-store kiosk features vibrant
develop addresses the age-old relationship Ltd. developed in conjunction with Intel—is brand full-size images—eliminating the need for an
between effective shelf display and sales. optimization. The kiosks provide a compelling actual physical appliance—using interactive,
Merchandising tools, such as planograms, show viewer experience, which helps maintain Suning’s high-definition displays powered by Intel® Core™
where products should be displayed for maximum position as a leading-edge electronics supplier. processors. Customers can experience products
results, but actually verifying product placement is first-hand while obtaining model and specification
Reducing Overstocks with Mobile Offers
time consuming and expensive. information. Using the vibrant virtual images,
Overstocked items are a particularly difficult
they can look inside refrigerators, experiment
Intel and Carnegie Mellon University have aspect of inventory management, but is
with television controls, and compare color
developed an intelligent shelf-compliance one that today’s data-driven enhanced
combinations, as examples.
solution that automates the process. Called merchandising can help remedy. For example, a
AndyVision, the solution uses digital image- major retail chain is using mobile technology to The interactive display is integrated with the
recognition technology to ensure products promote products in high traffic areas and, at retailer’s back-end systems for order fulfillment,
are displayed as they should be. This helps the same time, measure customer responses. inventory management, and customer information.
retailers reduce inventory distortion through Without the need for floor inventory, products
This solution from CopiaMobile and Intel helps
improved product monitoring. can ship from central storage or the point of
curb inventory distortion through a creative
manufacture, removing the overhead associated
Using a combination of image-processing shopping experience involving digital signage,
with floor space, product damage, staff training
algorithms on a low-power Intel® processor social media, and mobile phones. At the center
costs, and transportation.
ensures that placement fits the planogram of the solution is an intelligent self-service offer
model, plus can help create and monitor center where customers can download special Aside from reducing inventory-related costs,
store-specific planograms, provide compliance offers to their mobile devices. If persuaded to the solution provides a revolutionary in-store
reports, and identify new products or shelf- buy, customers then redeem the offer wirelessly experience that can strengthen brand awareness.
configuration changes. at a point-of-sale terminal.

3
 A Framework for Productive Solutions To help, the Intel® Intelligent Systems Conclusion
Effectively collecting and analyzing customer Framework offers standards and a consistent Intel and its partners around the world are
data is key to reducing retail inventory framework for connectivity, security, developing innovative digital solutions to
distortion. Much of this data is generated and manageability of intelligent systems reduce inventory distortion, one of the
through the use of intelligent systems located throughout the retail environment. It brings costliest problems across the retail industry.
throughout the retail environment—from the together hardware, operating systems, With the enormous amount of data being
checkout counter to the warehouse. and software for increased connectivity, collected about shoppers, these solutions
manageability, and security. can consolidate and analyze this data in ways
As the fastest growth area for microprocessors,
Intel has a long history of creating scalable that can help retailers avoid out-of-stock
intelligent systems provide greater connectivity,
technologies and ecosystems that drive and overstock situations, as well as improve
security, and manageability than previous
transformations in computing across the retail forecasting for optimum inventory levels
systems. They can process data from many
industry. Intel is assembling an ecosystem across multiple channels.
sources, perform complex analytics, quickly
recognize changes in their environments, and of system vendors, ISVs, system integrators, Through the use of digital display devices on
adapt instantly to optimize results. and cloud-to-device services that build on signage, kiosks, shelf labels, and elsewhere,
the framework and work closely with the consumers are offered a shopping experience
Just as today’s consumers encounter
Open Data Center Alliance to ensure seamless that is immersive, more efficient, and convenient.
multiple touchpoints as part of their
integration of intelligent systems with the Meanwhile, retailers are benefiting from the
shopping experience, retailers are dealing
data center and cloud. data these devices collect to strengthen their
with multiple channels with individual
The Intel Intelligent Systems Framework brands, reduce overhead costs, and improve
internal processes, numerous product
supports Intel® Xeon® processors, 2nd and inventory controls.
and customer databases, and complex IT
infrastructures. Across the retail industry, 3rd generation Intel Core processors with Intel is helping define the standards and is
enterprises often have separate networks Intel® vPro™ technology, and Intel® Atom™ producing the technologies that, in conjunction
that offer fragmented views of customers processors. These processors are important with key solution developers around the world,
and are unable to provide the seamless components in digital devices used are transforming the retail industry.
and personalized shopping experience throughout the retail environment.
consumers want. For More Information
• www.youtube.com/watch?v=xo-kpZtgzAM
• www.intel.com/content/www/us/en/
intel-innovation/retail
• www.intel.com/intelligentsystems

For more information about retail solutions from Intel visit:

intel.com/retailsolutions

1
Retail Information System (RIS) News, 2011 Shopper Experience Study. (2011). risnews.edgl.com/retail-research/2nd-Annual-2011-Shopper-Experience-Study--Taking-the-Store-to-the-Shopper73426
2
Sterling Commerce, Cross-Channel Brand Interaction: 2010 Consumer Preferences. (2010), ftp://ftp.networking.ibm.com/common/ssi/ecm/en/uvw12350usen/UVW12350USEN.PDF
3
Lora, Fatima, IHL Group Report: $818 Billion Lost Annually in Global Retail “Inventory Distortion”. (2012). www.retailtouchpoints.com/in-store-insights/1647-ihl-report-shows-818-billion-lost-annually-in-global-retail-inventory-distortion
4
Forbes, Big Data for Retail is Flying Off the Shelves, May 11, 2012. www.forbes.com/sites/sap/2012/05/11/big-data-for-retail-is-flying-off-the-shelves
Intel® vPro™ Technology is sophisticated and requires setup and configuration. Availability of features and results will depend upon the setup and configuration of your hardware, software, and IT
environment. To learn more about the breadth of security features, visit www.intel.com/technology/vpro.
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