It's been pretty well established over the years that you can't sell something you don't have on the shelf. That fundamental principle is reinforced by new research from IHL Group, which found that out-of-stocks are cutting the average ring in retail channels from consumer electronics to supermarkets.
According to the study's findings, as many as 20 percent of all shoppers at retail come into stores and find that at least one item they were going to purchase was out-of-stock.
The worst offender is consumer electronics stores, where shoppers said they left stores without buying an item 21.2 percent of the time. In dollars, that means consumer electronics stores are losing $1.35 to out-of-stocks on every customer who comes through their doors.
Warehouse clubs (losing $1.78 per customer) and supermarkets (68 cents) are also losing significant dollars as a result of out-of-stocks.
"Retailers remain in denial when it comes to consumers' perceptions of out-of-stocks," said Greg Buzek, president of IHL Group, in a press release. "Consumers don't care why the product is not available. They come in with money to spend at the stores and have to leave either because the shelves are empty, there is no one to help get a locked item, or the staff simply cannot find the merchandise even though the computer system says they have it. Nine percent of all consumers in our study have simply stopped shopping at one or more retailers in the last 12 months due to the problem."
Discussion Question: Why do out-of-stocks continue to be such an issue at retail? Are retailers doing a better or worse job of managing inventory today than in the past?