Innovation is crucial in grocery operations when it comes to meeting consumer demands and driving operational efficiencies. One area where meaningful progress is being made is inventory management, particularly by closing the data gap between retailers and suppliers that leads to overstocks and shortages through operational collaboration. The result is a more agile operation that benefits both retailers and suppliers — and ultimately, the customer.
An Opportunity for Efficiency Through an Open-Data Relationship
Traditionally, the flow of point-of-sale (POS) and direct store delivery (DSD) data between trading partners moves slowly. The lapse in data availability creates a trickle-down effect that leaves grocers guessing at forecasting to meet inventory demands, often leading to out-of-stocks or overstocks.
Grocery retailers and suppliers have an opportunity to optimize supply chain performance by shifting to an open-data relationship. This creates a reactionary approach, using shared data visibility to monitor SKU and location performance and base replenishment on quantifiable demand. Trading partners can mutually coordinate instead of working from silos.
POS data is shared with the supplier, providing near real-time visibility into product movement. By comparing the POS data with DSD data, suppliers gain more precise forecasting to prevent out-of-stocks and overstocks.
Fintech has a portal that houses this data exchange for trading partners, creating one source of truth to inform decision-making.
Benefits for Grocery Stores
Grocers engaging in this type of collaborative relationship see several operational advantages, especially when supported by Fintech’s automation capabilities, an in-house team of pay-by-scan experts, and an online portal with data visibility for everyone:
- Reduced Inventory Costs: Since ownership of products remains with the supplier until they are scanned at the point of sale, retailers eliminate expensive upfront inventory costs and reduce carrying costs. This frees up capital that can be invested elsewhere.
- Shared shrink accountability: In this type of relationship, shrink is no longer the retailer’s sole burden. Unified POS and DSD data helps identify the source of shrink and Fintech’s experts provide actionable solutions to reduce it.
- Soft-cost savings: Manual tasks like inventory counts are eliminated since the supplier DSD data provides accurate inventory information. Retailers are invoiced only for items sold, and Fintech automates invoice processing to reduce operational overhead.
- Aligning production with demand: With access to POS sales data, supply chain partners can align production and replenishment with consumer demand to stock shelves with high-performing items.
Applying This Relationship Model to Certain Categories
This type of collaborative relationship has long been successful in direct store delivery (DSD) categories — bread, dairy, ice, propane — but its potential reaches further.
Think boutique supplier offerings, including small local businesses, as this collaborative model makes it easier for them to gain shelf space with lower financial risk for grocers. It can also expand to center store categories like snacks, household items, cosmetics, and more. The more categories involved in this type of collaborative relationship, the more opportunities there are to refine selections to prioritize the right SKUs at certain locations.
In a recent conversation on OmniTalk’spodcast for their ‘Must See’ Tech feature at Groceryshop 2025, Fintech’s Russ Fant discussed a new frontier at the warehouse level, or what he calls “pay-on-ship.”
“There’s another emerging area that we are just starting conversations around and we’re calling it ‘pay-on-ship.’ That is where you take the ownership in the distribution center or warehouse and move that to the supplier. So, it’s like [the supplier] moves their warehouse into the retailer’s warehouse, and then they get paid once it ships into the store,” Fant explained.
You can watch the whole podcast interview here.
This model allows retailers to hold inventory in the warehouse without assuming financial risk until the product moves to the store. It’s especially valuable for smaller brands or secondary players in crowded categories, giving them a way to stay on shelves without overextending. For retailers, it means more efficient use of shelf space and better alignment with store-level demand.
Fintech’s Role in Grocery Operations
Fintech has supported these collaborative programs for more than two decades. Today, two-thirds of all third-party managed inventory programs in North America run through Fintech.
We serve as a central connection point between retailers and suppliers, managing everything from price changes and POS data to invoice payments and reporting. Our platform integrates with all necessary retailer departments — price book, accounts payable, and more — to establish clean data flows and ensure supplier needs are met.
For grocery stores, this delivers immediate ROI in DSD categories and opens the door to broader implementation across dry goods, CPG, and other areas. As inventory costs continue to fluctuate, this model offers a practical way to manage financial exposure while improving operational control.
“Look at this as a way to improve the economics around your store,” Fant said. “Take that valuable inventory off your books as you’re competing against the economy, against online sales, against everybody else out there. It is a great way to reduce inventory and take that cost off the balance sheet, and we’re here to help with that.”
Fintech provides a means for sharing these vital datasets between trading partners. This creates a more agile partnership in which both sides benefit.
Let’s Talk
To learn more about how Fintech can support grocery operations, reach out to sales@sbt.fintech.com or fill out a form to get in touch with a Fintech expert.
