25 January 2017
It’s one of life’s great frustrations: to head to a shop, or
visit an online retailer, only to find that the product you were after is out
Without effective warehouse and inventory management having
items out of stock is a growing issue and statistics show that this could be
damaging to your business.
The Harvard Business
Review surveyed almost 71,000 consumers and found that when someone finds a
product to be out of stock they do one of five things: substitute the item for
one in the same brand, substitute the item for one in an alternate brand (but
with the same retailer), delay their purchase until the item is back in stock,
don’t buy the item at all or head off and purchase it from someone else.
The study went on to show that retailers lose nearly of all
purchases when a customer finds an item to be out of stock – estimated at a
loss of around 4% of annual sales for each retailer.
Never coming back
The worst of these consequences is that the customer goes
and shops somewhere else. A survey
conducted by YouGov of 5,000 adults based in the UK, United States, Germany
and France found that 30% of those questioned had found an item they want to be
out of stock often or very often during the previous 12 months. Almost 3,000 respondents
said that they are left disappointed if they find an item out of stock and
blame the retailer or manufacturer.
Items becoming out of stock during times like the Christmas
shopping period can actually go on to become headline news. In 2015, the board
game ‘Pie Face’ proved to be so popular it sold out in most retailers a few
weeks before Christmas. Such was the publicity around this stock shortage, even
if the item was re-stocked, many customers may have chosen not to try to buy
the item having been told it was unavailable.
Is out of stock ever a good thing?
Sometimes, being out of stock can be a positive thing. In
early January, the new Nokia 6 phone was put on flash sale in China, and all
stock sold out within just one minute. In this instance, stock levels running
out so quickly adds to the buzz about the new product and can help future
sales. However, this is only true for a few products each year.
How to stay on top of your stock management
It’s vital that you connect your customer demand to your
stock inventory and make sure that the products in demand are available. Our
warehouse management devices are integrated with a specialised warehouse
management software, allowing you to track the receipt of goods into your
warehouse, keep a log of where the item is stocked within the warehouse,
utilise a scanning function for when the item is picked for despatch and log
If you think our systems could be of help to you then please
call us on 01274 741860.