How modern technology helps tackle out-of-shelf issue and how viable is universal merchandising model? 
According to The Wall Street Journal, retail networks lose $634 billion each year because of out-of-stock (OOS). One of the key solutions to this is merchandising. 

Merchandiser is «eyes» and «hands» of a manufacturer at a sales point. But this system has its limitations: travel time between sales points, battle for shelf space, specialist’s arrival before the goods are shipped. How to address these difficulties?

Automated retail

Battling the OOS will be the key trend for retail networks in the coming years. Magnit, Pyaterochka, Dixi and other retailers have already talked about that. Most Russian networks today are preoccupied with finding a technology to monitor stock balance and place follow-up orders automatically. In practice, it may be implemented in different ways: somewhere it would be a so-called alerting system notifying the sales point management of stock depletion, somewhere it would be a Telegram channel, some people even develop a proprietary mobile app. 
The market waits for a multifunctional solution bundling a working tool for merchandisers and stock control system. It would be good to integrate a photo recognition technology in it, which would be capable of comparing the situation on shelf with planogram in real time and showing which positions and brands are in short supply. The most advanced projects in this field are international Planorama and Trax, very costly and lacking versatility. That is why several local solutions emerged in Russia, which offer a decent level of recognition and client service as well as integration with various systems merchandisers use on a daily basis. 
But not retailers alone search for a technology to eliminate empty shelves at sales points. Manufacturers are interested just as much. Major brands still try to douse OOS issue with manpower — merchandisers at sales points. But such way has limitations of its own. 

Battle for shelf space

There is no complete and verifiable research to confirm proportional correlation between sales volume and amount of space occupied on shelf. But most manufacturers try to expand their on-shelf presence at competition’s expense nevertheless. Regardless of a planogram approved at yearly negotiations or a shelf share, every day merchandisers working for different manufacturers try to scale up their layout while narrowing the space for competition. And there may very well be several such iterations each day, depending on a number of merchandisers visiting a sales point. In the morning, brand A merchandiser conquers additional 5 centimeters from competition, and in the evening, brand B specialist mounts a comeback and even manages to snap up some extra space on both sides.
Situations like that sometimes may cause problems at sales points and sour the relations between suppliers. As a result, the so-called «shelf discipline» is low. This factor prevents a manufacturer from getting a coherent picture of brand’s on-shelf presence and often leads to absence of product on shelf. Moreover, this imposes additional obligations on merchandisers (frequently a company specialist has no other choice but to pack a shelf to capacity to ensure their brands have guaranteed presence and maximum space). Manufacturer, in turn, faces a necessity to pay the specialist for the time they spend working with other brands and travelling between sales points. 
European experience indicates that merchandising can be organized differently thanks to a number of factors. Among these are smaller territory, simpler logistics (which, in turn, influences shipment regularity), share of retail network’s own brands is higher, no explosive market growth. In such a way, in Scandinavian countries a manufacturer’s merchandiser visits a sales point 2-4 times a year: first, to sign a contract for the coming year, and 1-3 times to check whether the reached agreements are respected. For the remainder of a year a specialist may do something more purposeful than laying out products and fighting for extra centimeters on shelf. 
Major Russian retail network try to address the merchandisers’ war issue as well: many retailers work with internal specialists responsible either for a whole product category (groceries, home & personal care, strong spirits, etc.) or certain suppliers. Such employees are often forced to keep track of too many tasks and can’t focus on each brand. There are cases when internal employees neglect a whole category for several days. 

Universal soldier

In 2018, Magnit was testing an alternative merchandising model. From June to December, in 28 Moscow stores of the network universal merchandisers appeared, who were responsible for laying out different brands in several categories and, unlike classic specialists, were assigned to a certain store. Ten leading FMCG companies took part in this, their brands being laid out by a single merchandiser. The manufacturers could monitor the merchandiser’s work via mobile app and measure the time they spent in each category. 

All manufacturers got a coherent picture of where their brands stand inside a category on a given shelf, established a stronger contact with the retailer (a permanent merchandiser’s credibility was higher than that of a group of specialists which come and go) and saved 15% of budget thanks to elimination of expenses associated with transportation of personnel between sales points. 
According to Constantin Gurov, Director of Assortment Management Technology at Magnit retail network, the company actively utilizes new technologies and approaches. In six months, the pilot project yielded good results: total sales increased by 8%, for different experiment participants this figure varied between 5 and 17%. 
This year, universal merchandising practice will be extended to new stores. 

Pitfalls

The idea of a single merchandisers, despite the obvious advantages for both retailers and suppliers, still raises questions and fears. First of all, the model is new and for most large companies it is hard to bring themselves to implement such innovations. 
Secondly, not all manufacturers are prepared to bear additional expenses. Officially, the cost of a single merchandiser’s working hour is higher for them. That said, a universal merchandiser basically not only phases out a line employee tasked with laying out goods on shelves, but also relieves some workload from an in-house project manager thanks to a unified service partner and advanced software. 
As a result, the manufacturers get a chance to redistribute the resources that become available and focus on other sales points (due to the personnel transportation costs cut alone, a major manufacturer can open a several hundreds of new sales points). 

The idea of universal merchandisers seems to have a spark of potential: perhaps the new system will finally help the professional community find a reliable instrument to evaluate the performance of the specialists in this line of work. For many years already, investing millions of dollars in merchandising, manufacturers nonetheless can’t give definitive answers to the questions: how the availability of merchandising ramps up the sales, how much would a brand lose without a good looking shelf décor? The new round of pilot projects will allow to evaluate the cost-effectiveness from the reduction of visits as well as see the sales dynamics for the participating manufacturers.