Sponsored by Datasembly
It’s a challenge that frustrates brands, retailers and consumers alike.
Out of stocks (OOS) are one of the biggest hurdles in the food retail industry — and it’s been a dilemma for a long time.
OOS, of course, have gained even more attention in the pandemic environment, when consumers seeking high-demand products have instead faced empty shelves.
Complex Causes, Negative Impacts
The causes of OOS vary widely, including problems with forecasting, deliveries, staffing and shelf stocking — and more recently bottlenecks in global supply chains.
While the causes can be complex, the negative impacts are easy to understand. OOS in grocery stores result in bad experiences for consumers, who may switch brands, avoid a purchase or leave a store altogether to shop somewhere else. OOS can result in declining shopper satisfaction and loyalty, lost sales for brands and retailers and even contentious relationships between trading partners.
Much of the time CPGs aren’t directly at fault and struggle to fix these situations. The fault may lie with a distributor or retailer — or supply chain issues out of the CPG’s control.
More Visibility Needed
CPGs have long struggled to gain better real-time visibility into their out-of-stock levels in food stores. It’s hard to react quickly and effectively if you don’t know the full nature of the problem. Ideally CPGs would be able to collect OOS data by retailer according to state and metro areas — in addition to other geographic groupings of stores. The data might show, for example, that a CPG’s product was out of stock at a key retail chain 60% of the time — and at any one time it impacted 20% of the stores in that chain.
Robust data collection about out of stocks is available using Datasembly, which uses an advanced proprietary technology platform to gather hyper-local, real-time competitive intelligence about product availability at retailers. Datasembly collects over 2 billion observations daily — organized and provided via tools, dashboards, alerts, and visualizations. The company’s data covers not only assortment availability, but also pricing and promotions. This robust level and speed of information has not been available before.
Visibility Leads to Solutions
Gaining real-time knowledge about out of stocks enables CPGs to alleviate challenges before they get out of hand. Companies can identify problem-specific remedies, such as communicating stocking priorities to distribution teams and pressing for more retail space for frequently out-of-stock items. Some examples include the following:
- Using out of stock data to better prioritize the highest-volume products.
- Working with distributors — including on direct store deliveries — to improve efficiencies and stocking strategies — and then measuring ongoing results through data collection.
- Making food retailers aware of the need for increased in-store shelf space for top categories.
- Identifying competitor products that may have too many in-store shelf facings —based on high in-stock positions that indicate low turnover — and then using that information to negotiate more shelf space for your items.
Boosting Loyalty and Sales
It’s important for CPGs and their retail customers to make informed data-driven decisions about out of stocks before problems accelerate. Enhanced technology makes it possible to achieve success levels that result in improved customer loyalty, sales and trading partner relationships. These are welcome benefits regardless of the nature of the product availability challenges.