Microsoft is optimising retail execution for CPG companies

Microsoft is optimising retail execution for CPG companies

Firm and its partners are helping customers to display the right  products at the right time

Rebecca Gibson |

If a consumer packaged goods (CPG) company sells products across thousands of stores in multiple locations, how does it know whether all of its retail partners are displaying them on the right shelf at the right price at the right time? How can it track where products are selling well (or poorly) and understand what factors are influencing these sales rates? How can it identify the optimal level of inventory to prevent out-of-stock or overstock situations? How can it pinpoint which merchandising and marketing changes to make to boost future sales? 

According to Colin Wright, worldwide industry solutions director for retail and consumer goods at Microsoft, it’s vital for CPGs to be able to quickly and accurately answer these questions if they want to remain competitive and profitable in today’s fast-moving and ever-evolving retail industry. The answers, he says, lie locked away in a mountain of data. 

“Today, CPGs can use everything from internet of things sensors to cameras on shelves, image recognition applications on mobile devices, POS systems and even footage from security cameras to capture the myriad of information they need during a visit to a store,” says Wright. “However, the only way they can determine ideal placements for products in their planograms, set optimal pricing structures, develop effective merchandising tactics and accurately forecast inventory at a hyper-local level is to aggregate it and analyse it for actionable insights. To do this, they need technologies like artificial intelligence (AI), business intelligence reporting, data analytics and machine learning.”

This is where Microsoft and its extensive network of partners can help. China-based company Clobotics, for example, has developed a Cloud Image Recognition solution that uses AI, advanced computer vision and machine learning technologies to turn shelf images into actionable insights. All the CPG representative has to do is take a photo of the shelf with their smartphone and, within seconds, they will receive real-time insights about product placement, shelf optimisation, planogram compliance and competitive product tracking via Microsoft Power BI. 

Meanwhile, Australia-based partner Lakeba has combined the latest computer vision technologies with intelligent image capturing and Microsoft Azure cloud-based data analytics to optimise on-shelf stock management. Deployed via in-store cameras, Lakeba's Shelfie technology autonomously scans and audits retailers' shelves to identify potential gaps in shelf stock and incorrect ticket pricing. Shelfie integrates into store management systems, instantly notifying floor staff to resolve any issues and thereby avoid missed sales opportunities. Shelfie is optimised for high-frequency analysis and able to report on a change in on-shelf availability of individal products in minute intervals. Shelfie also provides real-time sales data via a dashboard built on Microsoft Power BI to help CPGs optimise merchandise layouts. 

“Our partners are experts at retail execution, so they understand exactly what data CPGs need to gather while they’re in stores and they’ve developed a variety of solutions to help them do it as quickly and efficiently as possible,” says Wright. 

Many partners have embedded Microsoft’s algorithms, data modelling and edge compute capabilities into their solutions. 

“Microsoft is using the Microsoft Azure stack to make significant advancements in edge computing to empower field staff to rapidly process vast volumes of data while they’re in the store, which saves time and empowers them to make real-time decisions that will drive sales,” says Wright. “For example, if a CPG representative thinks a product has been placed incorrectly and takes a photo to check compliance with the planogram, they typically have to wait a long time while every single pixel of the image is transferred to the cloud to be analysed offsite before they receive an answer. However, Microsoft’s intelligent platform processes all the necessary computations at the edge, delivering instant analytical insights so the representative can quickly reposition the product if necessary.” 

Wright adds that by combining these capabilities into their own platforms, Microsoft’s partners are creating neatly packaged end-to-end solutions that solve all the specific business challenges faced by CPGs on a daily basis. “Together, we’re creating intelligent technologies and solutions that will enable CPGs to gain better visibility into, and control over, every stage of the retail execution process. Thanks to the insights our solutions provide, CPGs are better positioned than ever before to answer all the questions that will help them to successfully grow their businesses.” 

This article was originally published in the Spring 2020 issue of The Record. Subscribe for FREE here to get the next issues delivered directly to your inbox.

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