5 Steps to Solving the Out-of-Stock Problem
Out-of-stock inventory continues to be a huge problem for retailers and suppliers alike. There’s nothing more frustrating for consumers than an empty shelf, and even just one instance of an out-of-stock item can have lasting consequences in terms of customer loyalty and lifetime value.
Consider some recent findings from the Trading Partner Alliance consisting of FMI and GMA. According to the report, shoppers identified product availability among the top three factors in deciding where they shop. However, on average, every time a shopper enters a grocery store, one in 12 items on their list is out of stock, and one in 10 items on promotion are not on the shelf. The obvious consequence is lost revenue for both the supermarket and the supplier. In the long run, consistent out-of-stock items can put a major dent in loyalty and deter repeat customers.
The historical challenges surrounding on-shelf availability can be attributed to the fact that grocery retail tends to be a “data rich, insights poor” industry. In other words, both grocery stores and suppliers are generating a large amount of data and information, but lack the proper tools to effectively collaborate and analyze that data in a way that drives real insights and value.