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What are the challenges of On-Shelf Availability and how they are solved?

What are the challenges of On-Shelf Availability and how they are solved

Many consumers still prefer to see before buying any product. However if on-shelf availability (OSA) continues to be low and out-of-stock events continue to be high, stores may have to rethink their shopping experience. Automated shelf-space monitoring is far more effective than traditional methods of managing OSA.

In digital age even with all advantages of online shopping, nothing beats experience of shopping at an actual store. Many consumers today are going online to shop. Most consumers go into stores to look for products they want. If they don’t find what they want, some shoppers may leave without buying anything. Of those unable to find specific product they wanted in-store, 49 percent will buy a substitute product, and 39 percent will give up and leave. Twelve percent will go to a competitor to find what they want.

Global Market Insights says In 2020, the AI in Retail market exceeded USD 2 billion and will grow at a rate of more than 30% between 2021 and 2027.

Source : Global Market Insights

What are the reasons for on-shelf availability problems?

OSA is an essential tool for helping retailers create an enjoyable in-store experience.

The number of products available for purchase by customers in a saleable condition is OSA. Reliable OSA helps retailers maintain trust of their customers, and that’s a significant competitive advantage. Both retailers and manufacturers benefit from using OSA, which can help promote sales. Although it remains an important issue for both retailers and CPGs.

Several factors can contribute to poor OSA including:

Lack of planning and management

One-fifth of OOS cases stem from poor communication between manufacturers and retailers. Discontinued products may sometimes appear on shelves. Your store’s shipped inventory and how it is placed on a shelf may not be enough to cover all your assigned shelf space and meet planogram compliance.

Inaccurate forecasting

Retailers estimate demand for merchandise and place orders in advance. However an inaccurate forecast can lead to inadequate supply. For instance during promotions demand sometimes exceeds supply.

Store ordering issues

If retailers don’t order enough or place their orders too late products won’t show up in time for shoppers to buy them.

Poor planning and lack of preparation

OOS issues are often due to a failure in-store execution and replenishment where a product is stocked. But product is not on shelf when a consumer comes to buy it. OSA is hindered when inaccurate labeling or tagged products with wrong UPC code cause problems.

Up to 60 percent of out-of-stock (OOS) instances are caused by flaws in-store practices rather than problems with upstream processes at a distribution center or headquarters. And manufacturers could lose up to 3.9 percent of their sales if they don’t address issues of poor OSA. This makes it a necessity for manufacturers and retailers to work closely together and in both their interests.

Why do current methods of measurement need improvement?

Many of us don’t know what happens on a shelf when issues occur. Current measurement methods can’t provide real-time and integrated data to aid in better decisions and corrective action around OSA.

POS Data

For SKUs that sell slowly OOS rates are estimated using data about similar items with different sales patterns. Using a method like this is as accurate as doing a manual audit, but that’s still relatively low. POS data is usually available at an aggregated level for brands which means they can’t access granular insights.

Perpetual inventory systems

With this, you can keep track of your inventory and know immediately when an item solds. The zero sales are out of stock. They’re not always accurate, and one study found a variance of 32 to 45 percent inaccuracy.

Manual audits

It has been go-to method for reaching consumers for many years, but scaling it is difficult and expensive. Manual store audits are easily flawed, and they don’t measure loss of sales.

Solution

Innovative technology lets you monitor activity in your store.

Visionify Out of shelf availability / Out-of-Stock solutions Image recognition (IR) offers insight into a store’s merchandise by allowing you to see images of individual items on their shelves. When you use an IR solution to capture images of retail shelves, solution extracts pertinent data about product availability (product positioning, stock movements, and planogram compliance). From those images and flags, any out-of-stock products.

This method gives you instantaneous access to data about every product in-store.

Over to you

Do your store facing out-of-shelf availability issues? How are you going to solve it? Our out of stock solutions will let you know if an out-of-stock or out-of-shelf availability situation is developing in your store. Or if your item displays a risk of not being in compliance with planogram.

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