Easter and high demand: technology as an ally to avoid stockouts in supermarkets

By Luiz Carlos Pereira de Padua

Easter is always a busy date for retailers, as there is a significant increase in consumption, especially of chocolates. Data from the Brazilian Association of the Chocolate, Peanut and Candy Industry (Abicab) indicate that the Easter period of 2022 registered a 13% growth in sales of chocolate eggs, compared to 2021. And for this year, the sector's expectation is that this percentage continues to grow.

However, such demand can also have negative impacts on business, such as stock outs. This is a recurring problem that affects the profitability of many chains, and can occur in different ways, whether due to lack of inventory control, a damaged product, theft/theft and also expired products.

The consequence of an affected profitability leads to the dilemma of which came first: the chicken or the egg? In other words, is it necessary to invest in improvements to make more profit or more profit to invest in improvements? To help resolve this dilemma, the study “Beyond the hype: Separating ambition from reality in enterprise AI” by the consultancy McKinsey & Company, carried out in 2019, shows that supermarkets that invest in advanced technologies can obtain a significant competitive advantage, potentially increasing their profit margins of up to 30%.

In this sense, there are some technologies that are already adopted by supermarkets today, such as ERPs, which with a little optimization, can result in greater operational efficiency and increased profit margin.

ERP integrated with other existing systems  

As mentioned above, most retailers already have an ERP (Integrated Management System), where they carry out all management related to loss prevention and stock-out control. Managing all stages of stock movements, such as purchases, goods receipts, inventories, real-time write-offs in front of the cashier, automatic replenishments, emergency replenishments, among other day-to-day operations. In addition, the ERP, by its very nature, already has the native integration of some systems such as commercial, accounting, tax, finance and property.  

However, outside of ERP, most retailers have POS systems (front of checkout), WMS (warehouse management system), CRM (customer relationship management system), HR (payroll system and people ), e-commerce, delivery services and others. In this case, integration platforms are necessary and important to optimize and ensure more assertiveness and speed in processes, in an automated and secure way.

Migration to the cloud: flexibility, agility and much more security 

It is characteristic of the retail sector to keep its ERPs and systems on local servers, however, to support periods of seasonality and high demand, such as Easter, either the infrastructure needs to be designed anticipating the peak (which means high waste outside this period) or only day-to-day infrastructure is used, causing disruption and major losses, at times when profitability could be greater. 

Therefore, the safest and most accessible solution for retailers, who have IT as an ally to the business, is the public cloud, as this adhesion makes the environment scalable, based on the adjustment of parameters that accompany the growth of the business, as well as with the proper layers of security to the ERP and peripheral systems. But be careful: you need to know the cloud so that it doesn't become a villain of your costs!

Investment in a good IT infrastructure in the retail sector avoids the need to chase losses only on high demand dates, when there is greater consumption and demands more from the environment. In this way, by investing in the long term and adhering to cutting-edge technologies, the supermarket segment will become increasingly scalable, competitive and secure.

Luiz Carlos Pereira de Pádua is Commercial Head for Retail at Skyone , a provider of technological platforms that simplify business and improve customer experience, seeking to evolve the way companies consume technology.

Check out the article published in Novo Varejo.

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