On Shelf Availability
On Shelf Availability
The retail shelf is the moment of truth when shoppers make their final purchase decision. Are they faced with a well-stocked displayed with an exciting promotion or is it just an empty shelf devoid of stock
Studies have consistently shown that out of stock rates are in the 4% to 8% range, resulting in lost opportunities and unhappy shoppers
Supply chains try to ensure that the correct level of inventory is in the retail system at all times. Gaining visibility and control on the whole process between the supplier, retailer distribution centres and stores represent a real challenge for the industry.
Why is improving On Shelf Availability so important to retailers and brands?
- Improving promotion compliance and product availability means greater sales in store
- Poor availability is a major point of customer dissatisfaction
- The problem is often not fully acknowledged because of differing on-shelf availability measurements used by the retailer and the manufacture and distribution centres
It is important to understand the root cause of “out of stocks”
These include:
- Store order and replenishment systems and shelf stocking practices
- Phantom inventory / ghost stock
- Poor forecasting for promotions, seasonal ranges and new product introductions
- Lack of planogram discipline
Resolving these issues requires a systematic and relentless approach.
- A Continuous measurement of on-shelf availability at store level from a consumers perspective
- Separation of problems into random one-off occurrences, systematic issues and persistent availability problems
- Working with the retailer and brand to resolve the issues
- Ensuring the relevant people have the correct information in time to take action
- Identify the role that each party has in improving on shelf availability: retail head offices, marketing, category management, store operations