The rule of thumb states that demand and supply must go hand-in-hand. However, slow production, delayed transportation, or poor inventory control sometimes cause supply shortages. If such a situation occurs once in a while, customers understand. However, customers are likely to complain about “out-of-stock” if that happens more than usual.
Understand that ensuring product availability is one of the essential parts of providing quality customer service. The unavailability of products affects the customer’s shopping experience and elevates the chances of brand switching.
In fact, studies have shown that with low-shelf availability:
- 50% of the customers will choose a substitute product,
- 10% will switch to a competitor, and
- 40% will leave empty-handed.
Obviously, you don’t want to lose your customers. That’s why paying attention to on-shelf availability is crucial.
How To Improve On-Shelf Availability (OSA)?
To improve the OSA, you need to understand the cause of out-of-stock (OOS). Bear in mind that OSA is not entirely the problem of retail outlets. Manufacturing, forecasting, and mismanagement, also lead to OSS issues. So, you have to learn about the prime reason and take the measure accordingly.
Below are the significant reasons for OSS:
Poor Retail Execution
Inability to recognize the OSS situation and other tasks associated such as price management and shelf labeling often causes trouble during the high demand. Likewise, poor product placement affects shoppers’ engagement with the store. Such circumstances significantly affect customers’ experience and sales.
To avoid such situations, you should focus on store automation. You can make use of Digital Price tags and improve product placement. Automation will make it easier for you to manage the store and elevate customer satisfaction.
Use Of Manual Methods For Store Management
Stating the obvious, manual store management methods are time-consuming and not very effective in the modern age. It affects shopper engagement, inventory management, and sales. According to the experts at SES-Imagotag, retailers should adopt IoT solutions for digitizing the stores.
Cloud-based applications such as Digital Price Tags ensure accurate information, more security, automated shelf monitoring, and stock-out detection. To put it simply, it will help make your store more efficient, bringing in more customers.
Another prime reason for OSS is inaccurate forecasting, i.e., when retailers’ anticipation for demand causes insufficient supply. In some cases, the SKUs (stock-keeping units) run out of the shelves before the product arrives.
Such circumstances often happen when the demand suddenly rises in the off-season and market trends change. It is also noteworthy that this situation can possibly cause retailers and manufacturers to lose approximately 4% sales.
Therefore, it is essential to pay attention to the market and industry trends. Try to forecast as accurately as possible. You can also connect with more than one manufacturer to ensure a regular supply of products. Keep a backup of products so that the customer does not have to leave empty-handed.
These are some of the major issues causing OSS. Improving your store’s layout, using advanced technology like digital price tags, and effective communication with manufacturers and suppliers can help you resolve this issue.
Nevertheless, for the success of your retail store, you must keep an eye on the latest technology and implement store automation.