Inventory inaccuracies are costing European supermarkets in efficiency and customer trust. Michel Spruijt, president of Brain Corp International, discusses how technologies like AI-powered robots, IoT tracking and machine learning are helping retailers improve inventory accuracy, streamline operations and stay competitive in a challenging market.

In the competitive landscape of European supermarkets, inventory visibility has emerged as one of the critical factors that can differentiate successful retailers from struggling ones. Recent studies paint a concerning picture: approximately 60% of SKUs across seven major European retailers suffer from inventory inaccuracies, creating a cascade of operational challenges that ultimately hurt the bottom line.

These inaccuracies don’t merely cause administrative headaches – they are practical difficulties that European supermarkets are being obliged to overcome: Nearly 40% of retailers have been forced to cancel at least one in ten orders due to poor inventory visibility, a statistic that highlights the severity of the issue. When shoppers encounter empty shelves where their desired products should be, or when online orders are canceled due to stock discrepancies, customer trust can erode quickly.

The root causes

Understanding why inventory records become inaccurate is essential to addressing the problem. Several factors contribute to these discrepancies. First, theft and shipment errors constitute a significant portion of inventory inaccuracies. Products that disappear due to theft but remain in digital inventory records create phantom stock – items that appear available in systems but don't physically exist on shelves. Phantom stock is also caused by discrepancies between scanned products and stock actually taken from shelves.

Human error also presents an inevitable challenge. Mistakes at point-of-sale terminals, during returns processing, or when transferring stock between locations, can all contribute to inventory discrepancies. Even with stringent protocols in place, manual processes leave room for errors.

Technology limitations can also play a role. Despite advancements in inventory management systems, retailers are blighted by outdated data from POS and ERP systems, legacy system integration issues, and siloed inventory views. Manual processes are still in use throughout the supply chain – from paper manifests to Excel-based inventory tracking – increasing vulnerability to errors, shortages or excess stock.

Technology solutions transforming inventory management

European supermarkets are turning to technology to quickly address inventory issues and gain better visibility. Real-time inventory tracking systems utilising IoT such as smart shelves, provide continuous updates on product locations and quantities, reducing discrepancies between physical and digital inventories. Moreover, this type of integration enables retailers to monitor stock levels across their entire network in real-time, facilitating more efficient distribution and reducing stockouts.

AI and machine learning-powered solutions, such as Streamline which uses algorithms to detect data patterns and generate forecasts while minimising stockouts and overstocks, are being deployed to enhance forecasting accuracy and automating inventory management. Inventory scanning robots like those powered by our own AI operating system, BrainOS, are designed to autonomously gather inventory data in-store and put detailed inventory intelligence at managers’ fingertips in real time, allowing them to optimise store operations and allocate resources more strategically.

Broader success for retail operations

Modern inventory visibility has implications far beyond accurate stock counts. Operations can see significant efficiency gains when staff can locate products quickly and accurately. Work hours previously spent searching for misplaced items or conducting emergency stock checks can be redirected to more valuable customer-facing services. In addition, supply chains become more resilient as retailers gain clearer insights into their inventory situation. With accurate data, supermarkets can respond more nimbly to supply disruptions, potentially shifting stock between locations or adjusting orders before shortages impact customers.

Enhanced inventory visibility also translates directly to more informed decision-making at all levels. With accurate, real-time inventory data, executives can fine-tune investment strategies across product categories and locations. Department managers can make evidence-based decisions about merchandising priorities, promotions and product placement when armed with reliable inventory information. Store managers benefit from clearer visibility into stock performance metrics, enabling them to identify and address issues before they escalate into major problems affecting customer experience. This data-driven approach to management transforms inventory from a mere operational concern into a strategic asset.

The path forward

As European supermarkets navigate the complex challenges of modern retail, inventory visibility will continue to serve as a foundational advantage. The coming years will likely see an intensified focus on improved inventory systems, with automated robotics playing an increasingly prominent role in inventory management without disrupting customer experiences.

For European supermarkets facing intense competition from discount chains and online stores, the message is clear: inventory visibility is not merely about administrative accuracy; it's about creating the seamless shopping experiences that today's consumers expect and the operational efficiency needed to stay ahead in an increasingly challenging market.