You may have probably heard of the words “out of stock” when shopping. How does it feel when you want to buy something only to find an empty shelf? You will buy from another brand or look for the same product from another supermarket. This is an example of customer experience with low on-shelf availability. According to statistics, businesses make substantial sale losses from customer walkouts due to stockouts. In this article, we will discuss the reasons for low on-shelf availability.
What is On-Shelf Availability (OSA)?
Every brand must ensure it has a specific product that should never go out of stock. It gives the customers an alternative to something else it produces. This ensures that the product will never go out of stock in stores where customers expect it to be. However, there is a slight difference between On-Shelf Availability and OOS. OSA means the product is only not available on the shelves. On the other hand, OOS means the product is unavailable both on the shelves and in the store.
Causes of Low On-Shelf Availability
The problem with low on-shelf availability is that it affects both the brand and the retailer. If customers cannot find a product where they expect it to be, they switch to another product or may not even return to the store. So, what causes this problem?
Bad Execution by Retailer
Some stores don’t have procedures to help them recognize when an item is unavailable on the shelves. In most cases, the item is usually available in the store but not on the shelf. Therefore, the main culprit of on-shelf availability is out-of-stock and poor placement of products. The best way a retail store can curb this problem is by using electronic shelf labels like SES-imagotag.com/. They alert the store when a product is about to run out on the shelves.
Mismanagement
The main reason products go out of stock is poor management methods. The store manager needs to oversee inventory shipment to ensure there will be no empty spaces on the shelves. Therefore, if there is poor management, both the store and the brand suffer from on-shelf availability.
Poor Ordering or Incorrect Forecasting
Sometimes a store can anticipate demand incorrectly, which means poor supply. For instance, if the product is forecasted to have a low demand at a particular time, it may fail to order the product, which means low on-shelf availability if the demand does not change. In other cases, the store may be too late to order a product before it runs out on the shelf. Therefore, customers have to look for alternatives before the products arrive. This problem may worsen during a promotion because the demand is way higher than the supply. Therefore, there is a need for accurate forecasting. The store needs to keep its stock in check to avoid sales losses.
Conclusion
Manual audits no longer provide reliable data for improving OSA. Therefore, the best way to increase OSA is for the retailer to choose a digital system that provides up-to-date data in real-time. An electronic shelf labels helps the store recognize when a product is running out on the shelves, ensuring there will be no low on-shelf availability.
