As we look ahead to the retail challenges and opportunities in the second half of 2025, one priority will be central: in-stock visibility. The ability to see — accurately, in real time — what is and is not on store shelves has moved beyond a routine operational consideration and become a strategic imperative.
Advances in augmented reality (AR), artificial intelligence (AI) and leveraging data insights are enabling retailers and consumer packaged goods (CPG) companies to become more proactive in inventory and merchandising management. Using these tools allows companies to improve sales, optimize labor efficiency, ensure trade compliance and ultimately deliver a better experience for the consumer.
Out-of-Stocks: A Persistent Challenge
According to NielsenIQ, every 2% decrease in out-of-stocks results in a 1% increase in sales. For large retailers, that represents millions of dollars in revenue. Yet historically, understanding what was actually in stock — especially at the shelf level — has been operationally challenging and difficult to quantify with meaningful data.
Traditional methods of auditing shelf stocks have been manual, labor-intensive and inconsistent. Store employees or field representatives walk the aisles, clipboard in hand, noting where products appear to be missing, then check the stockroom for replenishment. Not only is this approach slow, inefficient and cumbersome, but the insights gathered also frequently fail to reach corporate decision-makers.
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Technology has transformed this process. By scanning shelves with a mobile device enabled with image recognition software, field teams can now capture real-time visual data. These tools do more than simply recognize that a shelf is empty; they identify which product is missing and give field teams insight they can act on in real time. This improves on-shelf availability in the short term and allows corporate decision-makers to identify long-term trends and performance issues.
Real-Time Data = Responsiveness at Retail
In today’s climate of ongoing economic uncertainty, unpredictable supply chains and evolving consumer behavior, the ability to make data-driven decisions in real time is essential. AI-driven shelf intelligence systems provide immediate insight into execution across stores, allowing organizations to act quickly when stock issues or merchandising problems arise.
Moreover, this real-time data supports mobile task management tools that assign, track and verify in-store actions. For example, a system might detect five missing items during a scan, confirm that three are available in the stockroom, and automatically create a replenishment task. This enables teams to act with both clarity and efficiency.
But as we all know, shelf visibility is not simply about stock levels. Retailers and CPG brands invest significant time and resources in developing planograms, and executing against those plans ensures promotional success and fair representation for suppliers. AR-enabled software now enables real-time planogram compliance auditing at scale.
By comparing real-time shelf images against planograms, organizations can detect things like incorrect placements and specific out-of-stock items. This is particularly valuable for monitoring high-value display areas such as endcaps — and ensuring that those products are in stock and on the shelves — where compliance is often tied to trade agreements.
In-stock visibility data also has value beyond real-time responsiveness. If a promotion underperforms, for example, POS data alone cannot always explain why. Shelf intelligence might reveal that a display was set incorrectly, that a product was out of stock for high-traffic days or that visibility was compromised due to poor placement. This added layer of understanding allows companies — both retail and CPG brands — to optimize future campaigns and prevent recurring stock and shelving issues.
The Evolving Value of Real-Time Shelf Data
One of the biggest, and continuing, challenges for retailers is labor. Some leading retailers are working with third-party teams to perform weekly shelf scans across thousands of stores, which generates consistent data without drawing from store labor budgets. These third-party audits help retailers maintain high operational standards and help prevent internal bias. On top of that, third-party data ensures fairness and accuracy in out-of-stock measurement when store performance is tied to employee bonus structures.
The financial implications of shelf visibility extend beyond operational efficiency and labor concerns. Trade agreements between retailers and CPG brands often include requirements around shelf placement, promotional displays and share-of-shelf commitments. With accurate shelf data, retailers can ensure that contractual obligations are met, and CPG brands can measure ROI on high-value displays. In fact, retailers are now exploring ways to monetize this data — offering brands access to insights into on-shelf availability, display execution and brand representation.
For mid-size brands in particular — many of which lack dedicated field teams — this data offers an affordable and scalable way to monitor performance across retail partners. And as we move into the second half of 2025, both retailers and CPG brands that invest in real-time shelf intelligence will be best positioned to adapt, compete and thrive. Those that do not risk leaving revenue, loyalty and insight on the shelf.
Ali Moosani is the CEO of FORM, a leading provider of AI-powered field execution solutions.
