Shoppers still love to come to the store to quickly grab the products they need or to stroll along the fully stocked shelves. The pandemic had a major impact on brick and mortar stores, including grocery stores. After two years of the pandemic, the damage can still be seen in the on-shelf availability, foot traffic, and shopping patterns.
In this article, we are going to focus on the issues of on-stock availability. Discover:
- Why is it important to always have a fully stocked shelf?
- How can out-of-stock impact sales and customer satisfaction?
- How to improve on-shelf availability?
What does on-shelf availability mean?
On-shelf availability (OSA) refers to the number of products that are available for purchase at a given place and time. To put it in other words, OSA means the products that your customers can purchase from your store at a certain time.
Of course, customers want to find shelves filled with their favorite products, at any given time they enter your store. From time to time this doesn’t happen and the Pandemic also impacted OSA. In the last two years, it seems that on-shelf availability is decreasing which is impacting both customer satisfaction and sales.
Why and how is OSA impacted?
On-shelf availability is an essential element in optimizing the experience of your customers in-store. Poor OSA is a nightmare for both retailers and it happens more often than expected. Some of the most common reasons for poor on-shelf availability include:
Poor inventory management
One of the biggest issues for retailers is inventory management. When it’s not done properly on-shelf availability is affected. Also, POS inventory management is not the most reliable method because some SKUs might still appear in stock while the products are spoiled, damaged, or were stolen.
Retailers rely on their intuition and previous sales to forecast the quantity of products they need in the future. When they place an order, the forecast might be inaccurate, especially due to in-store promotions when the demand for products tends to exceed the supply.
Placing an order too late or understanding the demand can also impact on-shelf availability. Products will arrive after the retailers run out of those SKUs.
Poor execution and replenishment
In some cases, the retailers had an accurate forecast, they placed their orders in time, and the products are in storage. However, poor execution and replenishment can impact OSA. Sometimes, products don’t end up on the right shelves or they are not replenished in time.
The impact of out-of-stock
As you might expect, stockout is not something customers appreciate. It’s frustrating for shoppers to come to the store only to discover that 3 out of 10 products are out of stock. As mentioned, the pandemic took its toll on OSA and 65% of shoppers believe that grocery inventory availability is worse than it was before the pandemic.
Shoppers come to the store to purchase products and they expect this to be a frictionless and entertaining experience. When they go to an aisle and see that the product they were looking for is not there, customer satisfaction is affected. If this happens more than once, studies show that 31% of shoppers will switch stores.
Of course, when shoppers are not finding the product they want, the sales will also decrease. You can’t buy something that’s not there. Some shoppers are loyal to certain brands and products and they won’t replace the product they wanted with another.
Improve OSA and increase customer satisfaction
Relying on POS data and manual audits is no longer a good strategy to improve OSA. In order to increase on-shelf availability, retailers should choose an image recognition system. This type of technology offers dedicated shelf data. IR solutions process and analyze images of the shelves. Then, the insights are collected and used to improve on-shelf availability, product placement, and planogram compliance.