Retailers and the entire DSD supply chain enjoy the perks of Scan-based trading (SBT). If you’re a retail store owner, your store benefits from saving inventory costs, eliminating or reducing shrink, less merchandising process time, and enhanced operational time. All of this leads towards the primary objective, i.e., boosting sales. Implementation of a Scan-based trading program is not a new concept. However, it has been gaining immense traction in the last few years.
In the SBT retail program, retailers remit the payment to the suppliers/distributors once the item sells. Thus, the upfront inventory cost is forgone while giving suppliers more control over the inventory. They can quickly accelerate sales with access to retailer POS data. No more messy spreadsheets! SBT system automates the whole process of managing in-store inventory, enhanced retail merchandising, and forecasting demand.
As a business model, SBT retail is a form of consignment trading where the goods are kept with a third party. Retailers pay per scan and receive a portion of the whole amount as profit. Retail merchandisers with an authentic SBT management process ensure that the inventory reaches the sales floor on time, a neat and effective planogram is created, and the items are priced correctly.
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Benefits of Scan-Based Trading for Retailers, Suppliers, and Distributors
1. Reduced Inventory Cost
Conventional delivery methods involve payment of items as soon as they are received. In the SBT retail program, retailers pay the manufacturers, suppliers, or distributors when the items are scanned and sold. SBT saves the upfront inventory costs that retailers typically incur, hoping that the inventory projections meet the demands. Here, the retailers pay based on the customers’ interests.
2. Fosters a Healthy Buyer-Seller Relationship
The buyer-seller relationship changes drastically because of factors such as inventory costs eliminated and shrink liability negotiated. In an SBT program, retailers entail low risks specific to inventory and shrink. Therefore, they are much more willing to experiment with the products by allowing suppliers to roll out fresh products in the retail outlets and distribute them to a broader location. The experimentation might appear as a threat to distributors, but it’s a profitable deal.
3. Get Clear Visibility into Performance
Scan-based trading produces organized POS data which keeps a check on the sales of products in real-time. Suppliers can access this data and gain clear visibility using this data and analyze their promotional performance. Data analysis creates a better shopping experience for customers by increasing responsiveness, more thoughtful product placements, and strategies that increase sales and maximize profits for retailers and suppliers.
Integrated inventory management fosters an efficient scan-based trading program wherein retailers and suppliers can access transactional and inventory data on a shared platform.
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4. Become a Preferred Vendor
SBT benefits suppliers and distributors by making them preferred vendors. The supplier/distributor-retailer relationship builds up as a result of this. They become collaborative business partners to achieve the same goals as they hold shared objectives. At the onset of the scan-based trading relationship, partners agree upon specifics like price, promotion, shrink, etc. Thus, reducing discrepancies in trade.
5. Gain Helpful Insights
Data analysis becomes easy with the SBT retail program. Suppliers can derive insights from the data collected by scanning the products at the POS. They can spot errors, manage inventory, and identify shrinkage issues to derive an efficient solution.
6. Operate More Efficiently
Scan-based trading has a significant impact on multiple areas of the supply chain. Unlike the other trading methods, SBT does not need suppliers and distributors to check-in meticulously at every retail store. Fast-paced deliveries and reduced transportation cost increase the overall operational efficiency and save cost.
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Conclusion
Scan-based trading (SBT) is transforming the retail ecosystem by bringing transparency, efficiency, and profitability to both retailers and suppliers. It minimizes inventory risks, enhances collaboration, and ensures that products reach consumers more efficiently. As technology continues to evolve, adopting SBT can be a strategic move for businesses aiming to optimize their supply chain, improve sales performance, and strengthen buyer-seller partnerships. In the competitive retail space, SBT is more than just a trading model, it’s a smarter way to do business.
Frequently Asked Questions (FAQs)
1. How does scan-based trading work?
Scan-based trading is a distribution system wherein the supplier continues to hold ownership of the products/inventory until customers purchase them from the retail store. After the product is scanned and a transaction happens at the cash register, the retailer pays the supplier. The retailer earns a part of the profits.
2. What does scan mean in retail?
When a customer purchases at a retail store, the product is scanned before checkout. In the SBT retail program, the retailer pays per scan. The supplier maintains ownership of the items until the scan takes place.
3. What are scan sales?
Scan sales mean that unless an item is purchased and scanned at the Point of Purchase (POP) in a retail store, it is not considered sold by the supplier. Only when the product is scanned can the supplier make a profit. Scan sale is beneficial for both retailers as well as suppliers/distributors.
4. What is a case stack deal?
A case stack deal is a program available for manufacturers of non-perishable, shelf-stable products that can last for a longer time. Retailers can make profits by getting huge discounts when purchasing larger quantities of products. These deals are often listed among distributor catalogs, monthly newsletters, and special bulletins.
