Avoiding Out-of-Stocks: A Proactive Approach to On-Shelf Availability

Clients in the News: While grocery shopping, a consumer heads down the beverage aisle in search of a particular brand of soda for their summer get-together. But, alas, that brand is nowhere in sight—it is out of stock. As a result, the consumer will do one of three things: buy another brand at the same store; look for that brand in another store; or, simply, not buy anything. If you are the manufacturer of that product, you have just missed out on a sale. You have also provided an opportunity for competitors to gain your consumers’ business and loyalty.

Out-of-stocks (OOS) are all too common in the retail grocery industry. The recent FMI/GMA Trading Partner Alliance On-shelf Availability (OSA) Study revealed that the OOS rate is consistently hovering between 8 and 10 percent. This means that 1 in 13 items on a consumer’s shopping list is not available on the shelf. While there are many OSA solutions on the market to help manage OOS, the challenge is that the industry has an outmoded way of thinking—legacy OSA practices focus on fixing today’s problems by reactively responding to out-of-stocks. However, if you are focused on fixing today’s problems, you are already missing sales. Moreover, attempts at intervention are often unsuccessful, ineffective, and expensive.

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