In today’s retail climate, consumers have come to expect immediacy and availability, and when a retailer fails to deliver, customers are quick to turn to the next-best option.
The pandemic of 2020-2021 walloped the retail supply chain and three years later it’s still nowhere back to pre-pandemic stability.
That’s not good for retailers striving to keep products in stock and customers happy. As studies and research have revealed today’s consumer will jump quick if an online item is out of stock or not available when they go to checkout. They are also not too fond of empty shelves where their favorite product was once within quick reach. In fact, 24% of U.S. consumers would abandon their shopping missions and leave the store without buying other items in their baskets if they experienced a gap on shelves.
According to recent data from Retail Insight, 78% of U.S. shoppers have experienced out-of-stock products in-store in the past 12 months. Not only that, but 68% of shoppers have experienced the same out-of-stock issue online.
Add to the mix inflation and cost-of-living issues and retailers are still challenged as much as they were two years ago.
But there are solutions within reach for retailers if they can leverage real-time data to create a consistent view of inventory levels and be nimble and efficient when it comes to restocking shelves which all plays into customer loyalty and satisfaction.
RetailCustomerExperience reached out in an email interview to Paul Boyle, CEO of Retail Insight, to learn more about what retailers can do and what the current supply chain challenges are facing brands given research from Retail Insight.
Q. How would you describe the retail out-of-stock situation, overall, at this point?
A. There is no doubt that the out-of-stock situation in retail remains a significant challenge, one many consumers believe has escalated since the pandemic. So much so that Retail Insight research shows that 75% of shoppers now feel product availability has degraded further than during COVID-19.
While the pandemic cast a long shadow over the retail supply chain, more recent factors, particularly the macroeconomic landscape and associated labor challenges, have emerged as the primary drivers exacerbating the current out-of-stock issue for retailers.
These issues are not as acute as some of the problems the pandemic created, but they are more systemic and demand that retailers more effectively execute key parts of their in-store operations to maximize product availability and ultimately better serve their customers.
Q. How would you describe the consumer view of out-of-stock items? Is it so strong that it is prompting consumers to turn to different brands, or are consumers not as fickle?
A. Retail Insight data suggests three in 10 (30%) U.S. consumers would question their loyalty to a grocer if out-of-stocks became a regular occurrence. Additionally, if they experience a gap on shelves, a further 24% would abandon their shopping missions altogether and leave the store without buying other items, increasing the chance of switching to a competitor. In today’s retail climate, consumers have come to expect immediacy and availability, and when a retailer fails to deliver, customers are quick to turn to the next best option.
Q. As the holiday season hits, what should retailers being doing about the stock inventory strategy — should they do everything possible to avoid giving consumers that experience or are they looking to compensate consumers dealing with the experience?
A. In a Retail Insight survey, 56% of shoppers said out-of-stocks were more pronounced in the run-up to Christmas. So, it’s clear that product availability around the holiday period is something that customers focus on. To prevent out-of-stocks from disrupting the busy and food-centric holiday season, retailers need an accurate picture of what products are on the shelf for customers to buy. Many retailers turn to gap scans, but this is highly manual, takes up precious time and presents a limited picture of availability at that point in time. Instead, a data-driven approach to product availability monitoring allows retailers to get a full grasp on the issue, leading to increased operational efficiency and sales. Using this information, retailers gain a full, real-time picture of what availability challenges they’re facing. Using this information, retailers can direct store associates to where out-of-stocks are present, removing the guessing game and increasing labor productivity. It can also be used to unlock automated insights which free up associate time to serve and sell to customers – this being so crucial during the ‘golden quarter’ of retail in the holiday period.
Q. Where and how does real-time data come in to help solve the challenge of out-of-stock situations and do most retailers realize that data is invaluable in solving the issue?
A. Real-time data is crucial when it comes to ensuring customers can always buy what they want when they want. From the moment an item enters a retailer’s distribution center to when they are purchased by the customer in-store, there are endless different data points that — when leveraged effectively — can provide an accurate, always-on availability monitoring tool. To fully take advantage of this data is no easy feat, however. Retailers need to adopt advanced, cognitive technology — a unique blend of subject matter expertise and AI — to be able to effectively analyze, leverage and action the insights that come from real-time data. As the awareness of the importance of real-time data continues to grow, more retailers are likely to embrace advanced analytics solutions to stay competitive and provide a seamless shopping experience for their customers.
Judy Mottl is editor of Retail Customer Experience and Rewards That Matter. She has decades of experience as a reporter, writer and editor covering technology and business for top media including AOL, InformationWeek, InternetNews and Food Truck Operator.