In my experience, in-store stock-outs are much more than a perception problem. They are a real problem. I am constantly shocked by how many stores – even those of the biggest brands in retail – struggle to keep their stores adequately stocked. Empty shelves and empty BOPIS promises become stark reminders to shoppers as to why they prefer to shop online and save the time and hassle of visiting a store. We have to stop trying to “optimize” inventory if we can’t keep the shelves and pegs and racks full. Otherwise, all the progress we’ve made creating differentiating store experiences has been wasted.

As Andrew’s article points out, perceptions of out-of-stocks are driven by visual evidence. If a peg or shelf is empty, the item is out of stock as far as the customer is concerned. That’s why the “last mile” of getting goods onto fixtures is so important in terms of payroll planning — if a store’s inventory system says an item is in stock, it doesn’t count if it’s on a trailer awaiting unloading or sitting in a stockroom. It’s a cliche of brick-and-mortar retail — but just as true as ever — that the customer isn’t shopping in the stockroom.

The perception of stockouts is further complicated by omnichannel initiatives like “ship from store.” Retailers are using their physical locations as mini-warehouses, from which to ship e-commerce orders no matter where they originated. One result? The inventory planned to satisfy demand for customers actually walking into that location isn’t always there.

This is one on of those topics that is misguided by bad research. If you are on Amazon, as an example, there are lots of people selling the same item – easy to find what you want. So Amazon per se is not out of stock, just one of the many vendors on Amazon. That’s a totally different phenomenon from my Kroger having an out-of-stock on an item. Then I need to switch items or go to another Kroger store to get it. Brick-and-mortar is stuck with this problem and the best they can do is keep service levels high enough that shoppers don’t walk out or aren’t dissatisfied enough to stop coming.

It would be helpful to have some actual numbers to discuss. It’s fine to assert that, for example, “Research shows that online retailers have significantly lower service levels when compared to traditional retailers that operate warehouses and stores.” But what is the actual delta? Beyond that I think perception is the key, in the same way it is in pricing. And that’s the flaw in the argument. If a store is 99.5 percent in-stock, but what I’m looking for as a consumer falls into that 0.5 percent out-of-stock, my perception will be that the store has an out-of-stock problem. There’s also the frustration associated with the immediacy of physically reaching for something that is not there, again deepening the perception of poor service levels. As to the second question it is NEVER a strong argument to say, “Shop with me. I’m not as bad as he is.” Being better than a poor competitor is not the same thing as being good.

There’s another perception issue: Online stores can give the perception of an “infinite aisle.” Retail stores struggle more here. When I’m searching for a specific item, any given store may or may not carry it.

“Out of stock” in the customer mind isn’t narrowly tied to what should be in stock — but to what they need at that point in time.

Online may have to backorder the item — but the customer is interested in finding the product their way, ordering it, and having it arrive. They can do that easier online — unless they need it instantly.

Cheers to brick-and-mortar retailers that have made leaps and bounds in combating out-of-stocks. That said, the ability to curb out-of-stocks doesn’t necessarily translate into improved product availability for in-store shoppers. No matter how motivated store personnel are, execution problems like product not being visible to shoppers (i.e. below eye line, behind other products, in the wrong place), product left in the stockroom, or system problems like ticketing issues, inventory discrepancies, and more persist. As a result, shoppers perceive out-of-stocks as being more pervasive in brick-and-mortar than online.

Perceived out-of-stocks remain a persistent problem in the industry. Members of the Store Operations Council blame several factors, but over-busy store associates are a key factor. Until we can get more talent in the store we’ll have this problem.

The out-of-stock rate in supermarkets 20 years ago was 8 percent. Today, it’s still 8 percent, according to the latest research I’ve read. Maybe robots are the answer to full assortments.

Brick and mortar retailers must show their customers that they can resolve an out-of-stock problem quickly to hold onto the customers. Online, the customer can move quickly to another retailer, but this is not the case in the store. The customer has spent the time to come to the store and an alternative to that retailer is probably not next door. Whether it is free shipping to the customer’s house or creating a delivery from another store, the value of the relationship with the customer is more important than the cost to service them during a OOS situation.

Physical retailers should not highlight the challenges faced by digital-only competitors. The customers will not care; they only care about the service they get from each retailer. They will do the valuation of each retailer themselves.