Growth of SBT
Scan-Based Trading (SBT) is experiencing significant growth across the retail sector. This expansion is driven by persistent labor shortages, increasing SKU counts, and elevated interest rates that constrain working capital. Retailers and suppliers are adopting SBT to improve inventory accuracy and reduce operational inefficiencies. Today, the retailer assumes full responsibility for shrink within their stores. However, under an SBT arrangement, shrink is no longer solely a retailer liability. Instead, a portion of the shrink is contractually shared with the vendor, effectively making it a vendor expense as well.
Key Operational Challenges
1. Reduced In-Store Labor and Receiving Accuracy
Retailers are facing declining availability of store-level labor, which has led to challenges in accurate and timely receiving. Manual receiving processes are increasingly unsustainable. SBT shifts inventory accountability to the point of sale, reducing reliance on manual receiving and improving accuracy.
2. SKU Proliferation and Capital Constraints
The number of SKUs continues to grow, increasing complexity in inventory management. At the same time, high interest rates are making it more expensive to hold inventory. SBT allows suppliers to retain ownership until the point of sale, reducing the financial burden on retailers and enabling more flexible product testing.
3. Increasing Complexity in Inventory Systems
Inventory systems are becoming more sophisticated and harder to manage manually. Without real-time visibility, retailers risk both stockouts and overstocking. SBT provides transactional data that supports more accurate forecasting and replenishment, improving inventory control and reducing waste.
Evolution of SBT
We’ve seen measurable performance differences when vendors are actively engaged through SBT. In recent cases where we’ve focused suppliers on inventory accuracy and out-of-stock management—both core components of our SBT model—we’ve observed a significant sales lift. Specifically, vendors participating in SBT have delivered up to 7% higher sales compared to the same products sold in the same retail areas by vendors not managed under SBT.
Scan-Based Trading represents a more collaborative and data-driven approach to inventory management, offering measurable benefits: 3–10% increases in sales, 2–4% reductions in out-of-stocks, and up to 60% lower reconciliation costs.
Vendors are increasingly supportive of this model due to its transparency and efficiency. ReposiTrak enables scalable, automated SBT programs that benefit both retailers and suppliers by reducing friction and improving data accuracy.
SBT is transitioning from an optional strategy to a necessary component of modern retail operations. Organizations that adopt SBT early are better positioned to manage labor constraints, financial pressures, and inventory complexity with greater precision and agility.