ASDA Middleton Loose produce

Source: Asda

Asda has removed more than a million units of ‘phantom inventory’ from its systems, following an estate-wide rollout of machine learning software.

The supermarket last year piloted software from Retail Insight that “identifies and corrects inaccurate retailer inventory records” using a combination of machine learning algorithms and human expertise. The software – called InventoryInsight – trained a data model for 60 Asda stores, using sales and inventory data to detect instances of phantom inventory.

It has now been rolled out to all stores, petrol stations and depots, and has identified 1.6 million units of the so-called phantom inventory.

Having identified the ‘shadow stock’, the technology then alerts store staff to manually validate the stock at the shelf-edge and update the inventory file “to help drive total store performance, correcting inventory accuracy, and improving product availability and sales”.

Phantom inventory is stock held on record but not actually available, due to theft, poor process compliance or mis-scanned items. The discrepancies are “a major driver of inefficiencies, lost sales and falling margins” according to Retail Insight. The issue is “a perennial challenge for grocery retailers” the company added, with data from ECR Retail Loss suggesting 60% of all retail inventory records are incorrect.

“The ability to accurately identify phantom inventory across our estate is a huge advantage for our business, and goes a long way in enabling us to deliver a better in-store experience for our shoppers,” said Neil Fairclough, senior director of retail transformation at Asda.

“Given the impressive results we received at trial, we were excited to conduct a full rollout of the solution. We have not been disappointed by that decision with metrics that have exceeded our expectations,” he added.

Retail Insight has been supporting Asda’s in-store operations since 2009, using its tools to improve replenishment and availability.

“All retailers have a problem with phantom inventory, and the majority are looking to find a solution for dealing with it in an efficient and scalable way,” said Wesley Mellor, customer success manager at Retail Insight.

Retail Insight will continue to work with Asda to further refine the solution, including building automation enhancements into inventory record-keeping.