​​Loss Prevention: Unsaleables Causes and Solutions, Part 2

by Andrew Hoeft | Nov 14, 2016 12:00:00 AM

Previously, we presented a high level overview of the challenges related to the loss prevention of unsaleables. Specifically, we examined how logistics, shelf life management, and the coordination between retailers and manufacturers all play an intricate role in reducing shrink. All of these factors can be small pieces of a larger problem or, on the positive end of the spectrum, small pieces of a larger solution when adequate changes and adjustments are made to facilitate loss prevention efforts.

In part two of this series, we zero in on how stock rotation, product dating, and product discrepancies can potentially exacerbate shrink and create consumer confusion. As we expand this scope to the store level, it becomes easier to see just how significantly these factors related to unsaleables can, in fact, impact product loss (or prevention).

(Continue to Article 3 Here!)

Now, let’s take a closer look at these next aspects of loss prevention and dive into part two.

Stock Rotation

Retailers often rotate stock on their shelves, so that the products with the earliest expiration dates are positioned at the front. The problem is that consumers will actively look for later expiration dates for many products, particularly for items like milk. Over 75 percent of consumers report that they check product expiration dates regularly, which in turn complicates the rotation strategy for retailers.

Another obstacle to the rotation is the sheer volume and number of goods available at a typical grocery store. Supermarkets routinely have over 15,000 items in stock, making the rotation a significant challenge on top of other staff responsibilities.

Discrepancies in Product Dating

In the food industry as a whole, there are no specific or standardized practices for determining expiration dates, use-by dates, and sell-by dates. This creates challenges for retailers, who often observe different uses of code dates within the same category of products. There’s also the fact that manufacturers are often conservative in estimating these dates, reducing the time that retailers have to sell the item safely. It’s not unheard of for a manufacturer to make a decision to reduce a particular product’s shelf life by up to a year without any corresponding changes in the packaging or the product itself.

Consumer Confusion

Because expiration and sell-by dates on food products are not standardized industry-wide, consumers tend to report confusion as to what these dates mean. Consumer attitude and perception have a substantial impact on whether or not they are willing to purchase products that are close to their sell-by dates. This is exacerbated by the use of unclear language like “use by,” “sell by,” and “best if sold by.”

Many consumers mistakenly believe that food is unsafe for consumption after the date printed on its packaging, which it is not always the case. Consumers are also prone to assuming that the printed “sell by” date is the final date on which they can consume the product without a loss of quality. Again, this is not correct; however, it is a common consumer assumption. This deters people from buying products that are, in reality, still edible beyond the printed date.

While retailers prefer to use sell-by dates, which is helpful for their rotation practices, consumers prefer “best if used by” dates—the use of either is still confusing for the average consumer.

One potential solution for meats and other sensitive items is to use bar code labeling that changes color when it is exposed to ammonia. These labels render the bar codes unreadable after the meat has begun to become truly unsafe for consumption, preventing it from being purchased at all.

(Continue to Article 3 Here!)

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