Index Small defined

Out-of-Stock Merchandise

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…to Stockout Merchandise Strategies

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This Stockout Merchandise Strategies index page aggregates links
to all post and photos of retail merchandising, display, and outfitting
as well as deep Background courtesy of Wikipedia.

BACKSTORY: A stockout, or out-of-stock (OOS) event is an event that causes inventory to be exhausted. While out-of-stocks can occur along the entire supply chain, the most visible kind are retail OOS in the fast-moving consumer goods industry (e.g., sweets, diapers, fruits). Stockouts are the opposite of overstocks, where too much inventory is retained.

Recent surveys on retail out-of-stocks suggest that instore operations are fundamental to reducing retail OOS.[3] Around 70-90% of stockouts are caused by defective shelf replenishment practices, as opposed to the 10-30% resulting from the upstream supply chain, such as a shortage of supply from a supplier.[4] This broad knowledge offers retailers the opportunity to improve on-shelf availability through internal measures. However, it requires a detailed understanding of the causes of OOSs.

A shortage of working capital may limit the value of orders that can be placed each month. This could be caused by poor cash flow management or other inventory issues such as too much cash tied up in high levels of excess.

Stockouts frustrate shoppers and force them to take a number of corrective actions that are beyond the retailer’s control. Understanding how consumers respond to stockouts is therefore the starting point for retailers who wish to improve on-shelf availability.[5] When shoppers are unable to find an item that they had intended to purchase, they might switch stores, purchase substitute items (brand switch, size switch, category switch), postpone their purchase or decide not to buy the item at all.[6] Although these responses differ in severity, each entails negative consequences for retailers. Stockouts cause lost sales, dissatisfy shoppers, diminish store loyalty, jeopardize marketing efforts, and obstruct sales planning, because substitution disguises true demand. Moreover, shopper surveys reveal stockouts to currently be the most prevalent annoyance to shoppers. Shoppers spend a considerable amount of time looking for and asking for OOS items.[7] Shopper response to stockouts has been investigated by researchers with respect to cognitive response (e.g. perceived availability), affective response (e.g. store satisfaction), behavioural response (e.g. brand switching) and aggregated response in terms of category sales effects.[8] Studies find shopper response to out-of stocks depends on brand-related antecedents (e.g. brand equity), product and category-related antecedents (hedonic level), store-related antecedents (e.g. service or price-oriented), shopper-related antecedents (e.g. shopper age) and situational antecedents (e.g. purchase urgency).[9]

Depending on the shopper response to an OOS, manufacturer and retailer incur various losses.[10] Both manufacturer and retailer face a direct loss of the potential sale when a consumer faces an OOS because the shopper purchases the item at another store or does not purchase it at all. Additionally, when a substitution is made, the retailer also loses an additional portion of the potential sale because the shopper tends to switch to smaller and/or cheaper substitutes.[3] In addition to the direct losses, both the retailer and the manufacturer incur additional indirect losses due to decreased customer satisfaction that results in less overall reliance on the particular retailers and brands. When an out-of-stock leads to purchase at another store, this provides the consumer an opportunity to try a different store. Consumer behavior theory argues that trial precedes adoption, and, thus, an out-of-stock sets the stage for possible permanent store switching. When an out-of-stock leads to purchase of a competing brand, the consumer trial can lead to possible permanent brand switching as well.[3] Research findings show that a typical retailer loses about 4 percent of sales due to having items out-of-stock. A loss of sales of 4 percent translates into an earnings per share loss of about $0.012 (1.2 cents) for the average firm in the grocery retailing sector, where the average earnings per share, already is about $0.25 (25 cents) per year.[3]

Identification of stock levels can reduce out-of-stocks.[11] The traditional method is to perform a manual audit of the store and manually look for “gaps” on the shelves. Due to differing sales velocities and replenishment schedules, the effectiveness of manual stockout audits depends heavily on their frequency and timing, and on avoiding human counting errors.[3] A second method makes use of point-of-sale data or, more specifically, scanner data. Based upon historical sales data, the latency period between sales is taken as a gauge of whether an item is on the shelf. It is a preferred method for investigating fast-selling retail items, such as soda cans.[12] OOS may also be identified by using inventory data, depending on its accuracy.[13] Finally, various types of technology, such as RFID, shelf stoppers and weight or light sensors, can be used. However, these technologies are so far not equipped to monitor the condition of the retail items (e.g. undamaged labels). (SOURCE: Wikipedia)

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For Stockout Merchandise Strategies by Title see…

Original Gourmet Lollipops Sellout Countertop Display Tree Naked
Mercedes-Benz Financing Literature Sellout Proves Popularity
Perfect Sink Coming Soon Restocking Promise by Wren
iRobot Vacuum Out-of-Stock Notice
Pardon Our Out-of-Stocks Sign
Just-Add-Ice Orchid Display Sellout  ”
Automat Toy Out-of-Stock Notice
Fresh Out Out-Of-Stock Notice
TagWorks Out-of-Stock Back-Tag Details
Wallet-Card Open-Wire Waterfall Display
Costco Out-of-Stock Sidewalk Sign Easel
iPad Just-Ran-Out Stock-Out Message
Back Tagging Patterned Perimeter Slatwall
CoronaVirus Store-Entry Out-of-Stock Notice
CoronaVirus Disinfectant Limit Physically Revoked
CoronaVirus Disinfectant Sanitizer Out-of-Stock
” Valentine Hugs and Kisses Sold Out
” See Sales Staff for Stock On Hang Tag
” Clear Acrylic Tray Out-of-Stock Inserts
” Digital Price Ticket For Out-Of-Stock Items
” I’ve Got A New Home Sold Tag
” Time-To-Reorder Back Tag For Ideal Wipes
Garnier Micellar Water Refill Instructions
Zip Tie Prevents Stockout
Temporary Out-of-Stock Message Is Permanent
QR Code Resolves Product Stockouts Instantly
Can’t Find Your Size Hang Tag at Karen Millen
Magnetic Help Signs Line The Shelf Edge
Hairbrush Shelf Paper Indicates Out-of-Stock
Target® Christmas Catalog Out-of-Stock Message
Oversize Out-Of-Stock
Definitive Out-of-Stock Message
High Cost of Overstocks and Out-Of-Stocks
Tile Stand as Out-of-Stock Sign Holder
Praise-Worthy Out-of-Stock
Stockout Wrongly Signed
JoAnn’s Purell® Mini Cart Wipe
Help Find Instructions on Hook
Help, Security, or Stockout Ploy?
Mucinex® BackStock Tent Sign
Whoops Back Tag for Gift Cards
QR Code for Out-of-Stocks
Prevacid® Tent as Pick Card
Out-of-Stock Back Tag
Pusher Paddle Message Rant
Retail ‘Pet Peeve’ in Spanish
Raincheck Better Than Nothing

For Hints on Finding Your Item see…

How To Find Your Item In-Store Or Out
Corrugated Scan Hook Out-of-Stock Hang-Tag
Item Available Elsewhere Tag

Follow Ulta Beauty Out-Of-Stock strategies at…

Ulta Limited-Stock Two-Per-Customer Offer
Ulta These-Flew-Away-Fast Out-of-Stock Notice

Compare Wegman’s Stock-out Strategies at…

Sutter Home Sorry For Missing Wine
Wegman’s Wine Out-Of-Stock Upright Sign
CoronaVirus Sanitizer Auto-Feed Stock-Out
CoronaVirus Hand-Sanitizer Limit Exceeded
CoronaVirus Limited-Supply High-Demand Stock-Out

For all Stockout Merchandise Strategies Resources see…

“ Out-of-Stock Merchandise Strategies Pinterest Board 
Out-of-Stock Merchandise Strategies Index Page

Out-of-Stock on FixturesCloseUp Pinterest

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