Your inventory system says you have stock. Your shelves say otherwise. The culprit? Phantom inventory—the silent profit drain that’s hiding theft, decreasing sales, and costing retailers millions.
Phantom inventory refers to stock that appears in inventory records but isn’t available for sale due to theft, misplacement, supply chain errors, or a host of other potential causes. This inaccuracy not only masks the true cause of losses but also leads to missed sales opportunities and negative customer experiences.
Retailers lose millions annually due to inventory distortion and shrinkage, with phantom inventory being a major factor in those losses. But what if you could see, track, and act on phantom inventory in real time—before small issues turn into large ones?
The Retail Loss Prevention Challenge
Loss prevention teams have access to more data than ever before, yet many retailers struggle with outdated systems and processes that slow down efforts and limit visibility.
Reactive methods such as rotating cycle counts, searching for shelf holes during sales floor recovery, and relying on store incident reporting to track losses can only take a retailer so far in understanding when and where phantom inventory might be present. A more effective approach would be to pair these traditional methods with state-of-the-art technology, allowing the retailer to be more proactive and efficient at scale.
Introducing Workcloud Actionable Intelligence
Zebra’s Workcloud Actionable Intelligence is an advanced analytics solution that transforms inventory visibility from a guessing game into a real-time weapon against loss. Here’s how it works:
- AI-Driven Anomaly Detection: Automatically and continuously compares stock records with sales performance metrics and other data-driven indicators, flagging mismatches instantly.
- Automated Alerts: Notifies teams the moment a potential phantom inventory situation is identified, enabling immediate investigation.
- Smart Tasking: Directs the right person in the right place to verify high-risk items, saving time and reducing unnecessary labor.
- Closed-Loop Execution Monitoring: Captures task resolution details, allowing the retailer to ensure issues are being corrected properly while also enabling higher-level root cause analysis and value tracking.
- Employee Accountability: Tracks who adjusted inventory records and when, deterring internal theft.
See It in Action: Scenarios
Scenario 1: Catching Internal Theft
An employee engages in refund fraud for high-value products, artificially increasing the on-hand quantity for those products.
Workcloud Actionable Intelligence connects the employee’s register activity to the inventory records, establishing that the products showing up in the employee’s refunds are also exhibiting symptoms of phantom inventory. Actionable Intelligence then automatically alerts loss prevention, enabling them to stop the theft early before it becomes a months-long issue.
Scenario 2: Addressing Organized Retail Crime
An ORC crew repeatedly targets a specific SKU across multiple nearby store locations.
Workcloud Actionable Intelligence identifies the recurring inventory discrepancies and triggers an alert that contains the details of the activity across all of the affected stores, allowing loss prevention to partner with law enforcement and apprehend the group before inventory losses stack up.
Scenario 3: Avoiding Out-of-Stocks
A delivery error leads to a pallet of product being delivered to the wrong store; however, the retailer’s assumed receipt process has still credited the original store’s on-hand inventory. As a result, the retailer’s allocation and replenishment systems are seeing an inaccurate picture of the store’s inventory.
Workcloud Actionable Intelligence identifies that the product’s sales are not aligned with the on-hand inventory and sends an alert to the store team, directing them to perform a cycle count, correcting the inventory, and triggering replenishment to avoid missed sales.
Real-World Impact
The effectiveness of Workcloud Actionable Intelligence is evident in its real-world applications:
- A national retailer reduced phantom inventory by 65 percent within six months of deploying Workcloud Actionable Intelligence.
- A grocery chain cut shrinkage by 40 percent after implementing phantom inventory pattern detection and automated alerting.
Beyond Loss Prevention: Better Inventory Management via Operational Excellence
Within the loss prevention industry, we know that typically the stores with a high degree of operational excellence are also the stores that have the best shrink results. With Actionable Intelligence, retailers can turn off cumbersome reporting and move to managing inventory by exception, making operational excellence easier for stores to achieve. In this “push” versus “pull” environment, analysts and store teams spend less time digging through data and more time taking data-driven, properly prioritized actions that improve inventory accuracy and operational compliance. Sales performance, shrink, damages, and perishable waste are just a handful of areas where retailers see significant improvement by using Actionable Intelligence to help them better manage their inventory. This wide range of benefits means that retailers can effectively address both sides of the shrink equation: reducing losses while increasing sales.
Conclusion: Protecting Profit with Workcloud Actionable Intelligence
Phantom inventory thrives in the dark, but Zebra Technologies brings it into the light. With Workcloud Actionable Intelligence, retailers can eliminate blind spots, stop theft before it impacts profits, and avoid missed sales due to out-of-stocks. Ready to take control? Schedule a demo today and see how much you can save.
Visit Us at NRF Protect – Booth #617
Experience the transformative power of Workcloud Actionable Intelligence firsthand at NRF Protect. Join us at booth #617, where you can see our solution in action. Discover how Zebra’s advanced analytics can help you combat phantom inventory, enhance operational excellence, and protect your profits.
Zebra Technologies—smarter visibility, stronger results.
