Why Are Digital Labels Important for Managing Inventory in Supermarkets?

Proper inventory management is crucial for the success of a supermarket’s operation. Inventory management that is neglected or unoptimized will only derail supermarket operations.

Here are a few reasons why:

It impacts customer satisfaction
Inventory management mainly affects product availability. Proper inventory ensures that popular items are always in stock, prevents customer frustration, and reduces loss of loyalty from customers. Regularly updated inventory helps in maintaining a balanced supermarket inventory and stock of all products.

Proper inventory management allows supermarkets to offer a wide range of products. This will allow them to cater to diverse customer preferences and enhance the shopping experience.

It improves cost control
Good inventory management minimizes holding costs for supermarkets. By avoiding excessive stocks, supermarkets can reduce the costs related to storage, insurance, and taxes on unsold goods and items.

Of course, this also reduces the chances of stockouts and overstock. Efficient supermarket inventory practices can balance stock levels. As a result, this can prevent both shortages and excesses, optimize capital use, and minimize waste of the supermarket.

It improves cash flow management
Optimized resource allocation for the supermarket can also be achieved with proper inventory. By maintaining appropriate inventory levels, supermarkets ensure that cash is not unnecessarily tied up in stock. This allows it to be used for other operational needs or investments.

Better cash flow management leads to healthier financial statements, making it easier to secure financing and manage expenses.

It helps with demand forecasting and data analysis
Inventory management also fuels data-driven decisions for the supermarket. Inventory management systems can provide data that helps predict future demand. This will allow supermarkets to stock products according to anticipated sales patterns in their cities or their respective communities.

Of course, this also helps a supermarket anticipate seasonal retail demand and trends. Supermarket inventory helps in planning for seasonal variations in demand, which helps ensure that the right products are available during peak times like holidays or special events.

It adds to supplier management
Keeping good inventory practices also helps with timely ordering and reordering. This ensures orders are placed with suppliers at the right time, maintaining a steady supply of products without overordering.

Accurate inventory data can be leveraged to negotiate better terms with suppliers. This includes bulk discounts and more favorable payment terms between the supermarket and suppliers or vendors.

It improves the reduction of waste
Proper supermarket inventory will help reduce waste. According to The World Counts, 35% of the wasted food is simply thrown out by supermarkets, shops, and households. Efficient inventory practices will help reduce this number, little by little. For example, the FIFO (first in, first out) method ensures older stock is sold before newer stock. This minimizes the chance of products expiring or becoming obsolete.

Regular inventory checks and rotation practices will also help minimize waste, particularly for easily perishable items like produce, dairy, and meats.

It helps in compliance and reporting
Good stock management also leads to accurate financial reporting for the supermarket. This helps maintain precise records for financial statements, which helps in the accurate calculation of cost of goods sold (COGS) and inventory valuation.

This helps with regulatory compliance as well. This ensures the supermarket’s adherence to specific regulations related to food safety, expiration dates, and inventory tracking. This helps avoid legal issues and fines.

It enhances operational efficiency
And, of course, good supermarket inventory streamlines the processes involved. Solutions like automated inventory systems or digital labels help reduce manual labor. Apart from manual labor, efficient inventory management reduces the time spent on stocktaking, ordering, and handling. This increases overall productivity and allows the staff to focus on customer service and other critical tasks in the supermarket.

Digital labels in supermarket inventory management offer numerous benefits that enhance efficiency, accuracy, and the customer experience.

For example, a digital label solution such as the Newton ESL is capable of influencing supermarket inventory. This is because Newton is equipped with state-of-the-art technologies such as 10x update speed, 7-page capacity, 7-color LED indicator, programmable buttons, freezer label variation, NFC capability, label management system, and more. Together, these digital label features create a streamlined environment. This makes digital labels an important solution for managing inventory in supermarkets.

Here are some of the key advantages and impacts of digital labels in supermarket inventory:

Dynamic Pricing
Prices can be updated instantly across the store. Hundreds of Newton digital labels can be updated within minutes, allowing for dynamic pricing strategies such as flash sales, discounts, or price adjustments in response to competitor supermarkets in the area. Digital labels also eliminate manual price tag changes, as they’re usually centralized on one platform. This reduces the risk of human error and ensures price accuracy across the store, from the shelf prices to the checkout prices.

Operational Efficiency
The implementation of digital labels reduces the need for staff to manually change price tags. This frees up employees to focus on other tasks, such as customer service and stocking shelves. They can also help with stocking and restocking on the main shop floor or storage inventory. Newton ESL has a 7-color LED indicator, which can be beneficial for supermarket operations. They can be programmed to match staff processes and indicate action, including restocking alerts, reordering alerts, expiration alerts, and more.

Enhanced Customer Experience and Informed Purchases
Digital labels with a 7-page information capacity, like Newton, can display clear details and additional product information. This includes nutritional facts, origins, and promotional messages, which can help customers make informed decisions.

Of course, the Newton LED indicator can also be used to further inform the customers and give them a visual. They can indicate vegan or vegetarian options, calorie count, and more. They can rely on the prices and information displayed for every item. This also minimizes pricing errors and corrective measures from the staff, ensuring that sales data is accurate. This consistent product information and price accuracy builds customer trust among customers.

Stock Inventory Management
Digital labels like Newton can be integrated with the existing inventory management systems of supermarkets. They can display stock levels to alert staff when items need to be restocked. They can also help facilitate quicker and more accurate reordering processes by providing real-time data on stock levels for managers and staff.

Sustainability
Having an efficient system in place will also be good for the sustainability or green retailing efforts of the supermarket. Digital labels eliminate the need for paper price tags, contributing to environmental sustainability efforts and reducing paper waste.

Features and capabilities from digital labels (LED indicator, 7-page information, label management system) can also help staff better manage and monitor perishable items and expiration dates. This reduces food waste and even holding costs to create a much more sustainable business.

Of course, many digital labels are designed to be energy-efficient. Newton digital labels themselves use Full Graphic E-ink Display Technology that consumes minimal power and mimics the experience of reading on paper.

Enhanced Marketing and Promotions
They enable the display of targeted promotions and cross-selling opportunities directly on the shelf, tailored to specific times of the day or customer segments. New promotions and product launches can be implemented quickly and consistently across all store locations.

Some digital labels can interact with customers’ smartphones. Newton digital labels can display QR codes for additional product information or product videos. They also have NFC technology, or near-field communication, which can help facilitate self-service checkouts or mobile payments in the supermarket.

Integration with IoT and Analytics
Digital labels can be part of a broader IoT ecosystem. They can provide data for analytics about supermarket inventory and customers, helping to optimize store operations. They can also be integrated into the in-store technology to create smart supermarkets with innovative environments.

Compliance and Traceability
Digital label solutions can ensure that product and stock information is always up-to-date and compliant with regulations. This reduces confusion among consumers and staff and reduces the risk of non-compliance penalties from laws and regulations.

Of course, this also enhances traceability for products and inventory. This is especially crucial for items that require frequent updates, such as perishables or promotional goods.

At the end of the day, digital labels offer supermarkets a modern solution to improve operational efficiency, specifically when it comes to supermarket inventory. By leveraging the capabilities of digital labels, supermarkets can transform their inventory management practices, stay competitive, and deliver good service to their customers.

Do you think your supermarket can benefit from Newton digital labels? Talk to SOLUM experts and get started on your digital label transformation!

Image by freepik

References
Grocery Store Inventory Management Explained | Oracle Philippines
Wasted Food Statistics