Tuesday 16th Oct 2018 - Logistics Manager Magazine

Stock-outs: dodgy data and frustrated shoppers

Back in the 1980s, I remember Jonathan Weeks telling me that the first thing he did when he became distribution director of Woolworths was to increase distribution costs – a shocking revelation at a time when “cost down” was an industry mantra.

However, he said, the problem that the retailer faced was not the cost of getting goods onto the shelves – it was lack of stock on the shelves. Stock-outs were all too common and the need was to improve availability. And he could point to an increase in sales as availability improved.

Malory Davies, Editor.

I was reminded of this by a couple of new surveys that highlight the fact that stock-outs are still all too common in retail.

According to a study by HSO, the enterprise solutions provider, some 75 per cent of consumers feel frustrated by a shortage of real-time stock availability – and 31 per cent say that stores they visit regularly run out of stock.

Separately, retail tech specialist Detego has produced a piece of analysis that suggests that the average retailer’s data is only 75 per cent accurate when it comes to knowing what inventory is actually in stock at any particular time.

And, it said, the problem is compounded by the fact that retailers are continually managing stock across multiple channels and are increasingly having to stay on top of consumer demands for up to the minute reliable information.

That ties in quite neatly with the HSO study which said that 42 per cent of consumers wish to be alerted at the exact moment when a selected item will be restocked or made available.

This survey also highlighted the frustration of online shoppers that had filled their basket only to get to the checkout page to find that some of the items were out of stock. There were comments about not being sure if an item would be in stock in-store, or if an item wasn’t in stock, when it would be coming in.

Detego has been monitoring its own chatbot service that allows consumers to engage with retailers via their smartphones, and it found the most common enquiries were about stock availability. It found data inaccuracies around inventory to be most of an issue in fashion retail where ever shorter product lifecycles, fast turnarounds of stock and multiple style, size and colour combinations can play havoc with the supply chain and in-store operations.

It’s no secret that retail has been going through a particularly tough time recently – highlighted by the number of CVAs across the sector – and there is pressure to reduce inventory right across the supply chain.

But, as these two pieces of analysis suggest, there is still a lot of room to improve both availability and visibility of stock.