Sunday, September 11, 2011

Interesting Facts about Out of Stock

An Out of Stock situation commonly known as OOS in Retail can be a frustrating experience for a customer and painful for a Retailer. I have tried to compile some interesting facts about an Out of Stock situation. Here it is

1. Worldwide average Out of Stock percentage for all retail formats is 8-10%
2. Retailers loose approximately 4% of sales due to an Out of Stock situation
3. When a customer is faced with an Out of stock 
          - 31% customers buy the same item in a different store 
          - 26% customers substitute the same item with a different brand
          - 19% customers substitute the same item with a same brand but of a different size
          - 15% customers delay their purchase
          - 9% customers do not buy the product at all
4.Out of Stock can be a permanent situation or a partial OOS situation.
A - Complete OOS = Zero Sales
B - Partial OOS =Low sales below normal average daily sale.
Partial OOS may occur because there are not many facings allocated on the shelf, making it difficult to access or less attractive to buy. Facing visibility in shelf for FMCG items must be atleast a minimum of 8inch per item. Private labels should be at eye level surrounded by Market leaders.
5.Reasons for mistakes in Store Audit for OOS can be
a - Item may be available at 2pm but out of stock at 5pm
b - If shelf is empty for a particular item the Store manager will add some other product which the auditor might not recognize.

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