Scan-Based Trading (SBT)

Tags: Glossary

A practice that uses point-of-sale scanner data to manage payment, promotion, and replenishment of products in a retail store. It is similar in nature to, and an enhanced version of, Vendor Managed/Owned Inventory where the retailer's POS data is used as the basis for transactions between the supplier and the retailer. It supplements the consumption/replenishment component of CPFR and ECR strategies.

What is Scan-Based Trading (SBT)?

Scan-Based Trading (SBT) is a practice that revolutionizes the way products are managed and replenished in retail stores. It utilizes point-of-sale scanner data to streamline payment, promotion, and replenishment processes. SBT is an enhanced version of Vendor Managed/Owned Inventory, where the retailer's point-of-sale (POS) data serves as the foundation for transactions between the supplier and the retailer.

In traditional retail models, the retailer purchases products from suppliers and assumes the responsibility of managing inventory levels. This often leads to challenges such as overstocking or understocking, resulting in lost sales or excess inventory. SBT eliminates these issues by shifting the responsibility of inventory management to the supplier.

The core principle of SBT lies in the utilization of real-time sales data captured by the retailer's POS system. As customers make purchases, the scanner records the transaction details, including the product, quantity, and price. This data is then shared with the supplier, allowing them to monitor sales and inventory levels accurately.

By leveraging this data, suppliers can proactively manage product replenishment. They can monitor stock levels in real-time and automatically initiate replenishment orders when inventory reaches predetermined thresholds. This ensures that products are always available on the shelves, minimizing the risk of stockouts and maximizing sales opportunities.

SBT also offers benefits in terms of payment and promotion management. With traditional inventory models, retailers purchase products upfront and assume the financial risk until the items are sold. In contrast, SBT allows suppliers to retain ownership of the products until they are scanned and sold at the point of sale. This means that retailers only pay for the products after they have been sold, reducing financial risk and improving cash flow.

Furthermore, SBT enables more efficient promotional strategies. Suppliers can analyze sales data to identify trends and patterns, allowing them to tailor promotions to specific products or regions. By aligning promotions with consumer demand, suppliers can optimize sales and increase customer satisfaction.

SBT complements other supply chain strategies such as Collaborative Planning, Forecasting, and Replenishment (CPFR) and Efficient Consumer Response (ECR). It focuses specifically on the consumption and replenishment component, ensuring that products are available when and where they are needed.

In conclusion, Scan-Based Trading is a game-changer in the world of retail logistics. By leveraging point-of-sale scanner data, SBT enables suppliers to take ownership of inventory management, leading to improved product availability, streamlined payment processes, and optimized promotions. This innovative approach enhances collaboration between suppliers and retailers, ultimately benefiting both parties and enhancing the overall customer experience.

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