In the bustling world of retail, shoppers continue to savor the in-store experience - be it a quick trip to snag essentials or a saunter through well-stocked aisles. Despite the considerable impact of the pandemic on brick-and-mortar stores, including grocery retailers, the appeal of tangible shopping prevails. However, as shopping patterns evolve and foot traffic continues its unpredictable dance, one crucial element remains non-negotiable - on-shelf availability.
Shoppers enter stores with a single, straightforward expectation: to find the desired products, ready and waiting on the shelves. It's an inherent aspect of the shopping experience - seamless, satisfying, and surprisingly crucial. When a shopper turns into an aisle only to be greeted by an empty shelf, it's more than a minor inconvenience. It disruptively hinders their shopping journey and significantly impacts their satisfaction. And when this occurs repeatedly? Research suggests that 31% of shoppers won't hesitate to switch stores, placing the stakes startlingly high. After all, out-of-stock doesn't just imply a temporary absence of a product - it risks the permanent loss of valuable customers.
Every stocked shelf tells a story, of a well-coordinated symphony playing behind the scenes. Yet, maintaining this rhythm is no walk in the park. It's a complex task that demands attention, precision, and a good dose of strategy.
Inventory and Availability Tracking are Tricky
Inventory and availability tracking is a labyrinth of complexities, from fluctuating demand patterns to unexpected supply chain disruptions, and human errors. Each of these factors brings a unique set of challenges, capable of stirring the calmest of waters. It's not just about ensuring that products are available for purchase, but also about accurately predicting when they will be needed, and in what quantities.
What's more, retailers have to constantly balance the fine line between having too much or too little inventory. While the former implies excess costs, potential waste, and inefficient use of storage space, the latter often translates into missed sales opportunities, customer dissatisfaction, and potential loss of market share.
Certainly, the ability to ensure optimal on-shelf availability - that perfect moment when the right product is available at the right place and time for a customer - sets successful retailers apart. But achieving this level of perfection consistently is far from simple. The key lies in leveraging the right tools and strategies to navigate the maze of inventory management effectively.
In this context, technologies like out-of-shelf tracking emerge as game-changers, introducing a new level of precision and control into the equation. They enable real-time monitoring, offering insights that can help anticipate problems before they escalate, optimize replenishment cycles, and ultimately, ensure that every customer encounter with a retail shelf tells a story of satisfaction.
Challenges: Loss of Sales, Loss of Loyalty, Loss of Execution
When a product goes out-of-stock, it sets off a ripple effect that goes beyond the immediate loss of a single sale. The challenges are manifold, as retailers and manufacturers must grapple with not only the loss of sales, but also dwindling loyalty and compromised execution.
The immediate casualty of an out-of-stock situation is, of course, the sale itself. Recent data puts this issue into stark perspective. In 2020, for instance, grocery products alone made up 45.5% of the global out-of-stock value in retail. The problem was even more pronounced for perishable foods, which accounted for 38.9% of the total value of out-of-stock items for that year.
However, the impact of such stock-outs extends far beyond the lost sale. In the era of online shopping, out-of-stock situations can prompt consumers to seek alternatives. According to a 2022 report, more than half of global e-shoppers admitted to switching platforms due to product unavailability. The figures are even more alarming for the United States, where almost 60% of online shoppers stated they would switch to a different website if their preferred product was not in stock.
Beyond the direct impact on sales, these out-of-stock instances also risk eroding customer loyalty. Shoppers value reliability and consistency; frequent stock-outs could undermine their trust in a retailer or brand, prompting them to shift their allegiance.
But the implications don't stop at the customer level. Out-of-stock situations can lead to a loss of execution. Inventory discrepancies can lead to internal inefficiencies and frustration among employees. Simultaneously, they can strain relationships with partners and suppliers who may bear the brunt of these inventory issues.
According to a report by NielsenIQ, monitoring out-of-stock rates is an essential part of the consumer goods data analytics toolkit. With timely and accurate information, manufacturers and retailers can prevent decreases in availability and respond swiftly to high out-of-stock rates. The goal is to ensure that the shelves are always adequately stocked, the customers are always satisfied, and the business operations always run smoothly.
How to Optimize On-Shelf Availability?
Effective strategies for optimizing on-shelf availability are crucial for retailers and manufacturers to keep pace with demand and retain customer loyalty. Proactive approaches involve demand forecasting and analytics to predict customer shopping behaviors and prepare the inventory accordingly. Real-time tracking and analytics can offer valuable insights to spot trends and patterns, enabling swift replenishment strategies. AI and machine learning can also enhance accuracy and efficiency in managing inventory and reducing out-of-shelf situations.
Get a Handle on the Out-Of-Stock Situation With Vispera
When it comes to overcoming the complex challenges of out-of-stock situations, Vispera presents a suite of advanced solutions harnessing the power of visual intelligence and AI-backed image recognition technology.
Vispera's Digital In-store Execution Monitoring Solution
Vispera's digital in-store execution monitoring solution empowers brands with granular control over their SKUs and all kinds of displays. Real-time, accurate data on out-of-stock situations by store, category, and product, along with on-the-spot call-to-actions and instant reports, enable businesses to act swiftly, addressing out-of-stock situations before they impact sales.
Space Planning & Category Management
Space planning and category management are also streamlined with Vispera's innovative solutions. By integrating Vispera technologies into monitoring and auditing processes, businesses gain access to real-time shelf-level insights and accurate data collection, free from human errors.
Benefits of Using AI-Backed Image Recognition Technology
With AI-backed image recognition technology, Vispera offers three key benefits:
- Enhanced Visibility and Collaboration: Vispera's solutions provide a bird's eye view across all channels and regions, enhancing visibility and collaboration across the supply chain and store operations.
- Increased Customer Satisfaction: By ensuring product availability and reducing out-of-stock situations, Vispera improves customer satisfaction, loyalty, and revenue.
- Optimized Store Execution: With Vispera, you can measure your success criteria, i.e., KPIs such as availability, visibility, compliance, effectively executing the perfect store while creating scorecards for each point of sale.
Curious about how Vispera can transform your retail experience? Reach out to us to request a demo or learn more about our solutions. With Vispera, you're one step closer to achieving the perfect store.
