More Musings on Out-of-Stocks

You may recall the FMI session given by JP Brackman of Procter and Gamble and Tom Gruen from the University of Colorado on out-of-stocks.

The fresh perspective these gentlemen brought to the long studied, expensive issue of out-of-stocks involved the amount of time the consumer spent looking for their products of choice and dealing with out-of-stock products.  Twenty-one percent of the consumer’s time in-store is spent pursuing this issue.

My focus in the last article (Vol. 47 July 2007) was on the impact this inconvenience undoubtedly had on the retailers’ very expensive “service” efforts.

In this newsletter I would like to turn my attention to the impact on the retailer from an employee/labor perspective rather than from lost sales and lost consumers.

It takes a consumer 21% of their in-store time to look for, double check, determine that the brand of their choice is out-of-stock and possibly choose a substitute item.

Why would we think it would take less than that 21% for the restock crew to deal with finding the “spots” where out-of-stock items should be restocked?  After all, there are no products on the shelf which to match.

• The cryptic shelf tag is of very little, if any, help.  (Assuming it is correct!  Gladson did a recent study where it found double digit errors in product placement on the shelf including size, mismatched tags to product, etc.)

• The “hole” on the shelf has probably been neatly faced over by store policy or not so neatly by some well meaning customer.

• Restocking occurs in a target environment:

  • Low light

  • A huge “put up” expectation and

  • Labor that can be tired or speak English (that pesky tag again) as a second language.

Ok, no reason NOT to believe that two of ten people on the restock crew spend their shift dealing with out-of-stocks.  A ten-person store crew in 100 stores, six days of delivery, 62,400 person days per year/100 store chain.  Yes, 31 years of wasted labor per year in those 100 stores.

Can Gladson cure this?  No!  But, we can drop 20 or so years in labor savings each year across 100 stores to your bottom line.  If you are interested, drop us a line at salesteam@gladson.com.

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