The Problem with Out-of-Stocks
When out-of-stocks occur, everybody loses.
- Customers are dissatisfied and either delay their purchases or take their business elsewhere
- Retailers lose sales, profits and customers
- Vendors and manufactures lose sales and risk in-roads from competitive brands
This is not a new problem. Out-of-stock problems have historically plagued the entire retail value chain and have remained at roughly 10% for the last 20 years, according to GMA/FMI/CIES/VICS. These figures are even worse for promoted items, which inflicts a double penalty when one considers both the cost of the promotion and the missed sale.
The net result is that out-of-stocks result in billions of dollars in lost sales every year.
Despite the fact that the frequency of out-of-stocks has not changed in the past 20 years, retailers, CPG companies and manufacturers have a much better understanding of the root causes. The issue is that stakeholders have traditionally lacked the timely and accurate information that would enable them to correct execution errors before they impact the customer. Examples of actionable information include real time data on:
Inventory reporting inaccuracies - When there is a delay in demand reporting or forecasting, or a mismatch between reported and actual inventories, out-of-stocks are likely to occur.
Promotion compliance - Promotions that are not executed according to schedule directly impact customer sales, satisfaction, and loyalty and have rippling effects on labor and inventory.
Planogram Compliance - Planograms are a critical element of the retail sales plan and if not executed, result in missed opportunity and losses, which can have the same impact as an out-of-stock.
Reducing Out of Stocks
SCOPIX has developed a Retail Video Analytics solution that addresses the out-of-stocks issue from the customer's point of view.
Using the latest innovations in video analytics, SCOPIX provides both retailers and manufacturers with a cloud-based service that provides a shopper-focused perspective, which maximizes actionability where it matters most; in the store.
Once collected, the in-store video data is processed through software that analyses the situation based on pre-defined metrics and delivers results to anyone needing access through web-based dashboards. Using this timely and actionable information, store personnel, retail managers and product managers can instantly address and eliminate the execution errors that have traditionally resulted in out-of-stocks and non-compliance with promotions and planograms.
The result is maximized sales, increased revenue, and higher customer satisfaction and loyalty.
To learn how you can leverage Retail Video Analytics to reduce out-of-stocks and ensure merchandising compliance, contact us at 1-650-295-0450 or send us an email at JLIB_HTML_CLOAKING .
