Musings on Out-of-Stocks
I have been involved in the study of out-of-stocks since the earliest white paper in 1991. I had the opportunity recently to hear Dr. Thomas Gruen from the University of Colorado and JP Brackman of P&G present on out-of-stocks at the FMI conference.
These gentlemen explored the facts uncovered in at least 50 studies done since the early ‘90s. There was some insightful lamenting of the fact that little has changed over the years. This fact is true despite the billions of dollars spent on systems and consultation, process improvement and development which have left the plight of the shelf largely unaffected.
It is true that many an effort has been undertaken in pilot. Most have produced spectacular sales results in excess of the 4% estimates reported in the 1991 Coca-Cola Research Council study. However, those results came at a cost that was not scalable or a process that was not sustainable.
One new statistic not considered before is that consumers spend about 20% of their shopping trip looking for products or substitutes of products that are Out-of-Stock. Wow! 20% of the task time consumed in a frustrating, confusing, temper-tempting effort that, at best, leads to a less than optimal result, and at worst . . .
Think of how many retailers are trying to “up” service levels to add to customer convenience as a way to combat low-price leaders and as a way of differentiating themselves from the “pack”. Then think of the consumer, greeted warmly at the entrance, enchanted by attentive butchers, produce managers, seafood gourmets, wine sommeliers and helpful aisle clerks, dazzled by offers “just for him/her”, and aided by carts, handhelds and PDA’s purporting to know just where products should be. All this is thwarted by the infuriating arrival at an empty shelf which initiates the ever less attractive “substitution dance”. Convenient my P-OOS-terior!
What can Gladson do to help?
- The failure of most algorithms, forecasts and systems today is based on the lack of accurate product data, especially dimensions. Gladson has the most accurate space management database in existence.
- Much of the shelf space in grocery today is allocated based on the brokers who do much of the work for the grocer in planning those shelves. A variety of perspectives are used to determine primary shelf location. Gladson maintains a domestic staff of shelf/space professionals who can lend an unbiased view of the set effectiveness from a consumer perspective.
- Seventy plus percent of all out-of-stocks begin in the store with faceovers, missed holes, bad tags, inexperienced labor and a plethora of other challenges. Gladson’s Image Shelf Solutions are a proven solution to lost sales due to out-of-stocks.
Want to fix your out-of-stock issues and give that consumer back the 20% of their shopping time for more profitable pursuits? Contact Us, at salesteam@gladson.com.
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