What happens when the product you want is not on shelf?

It’s something you encounter on most shopping trips with varying degrees of frustration.  For some products the shopper is happy to substitute (another flavor, another color, another brand, another size) and continue without, perhaps, noticing a problem.  For some products they are willing to delay purchase, get it on the next trip or go to another store.  In the most extreme case, their want can go unfulfilled or, recognizing that they must now shop elsewhere anyway, they may even abandon their shopping cart.

Clearly, different shopper choices impact the retailer and supplier differently but research suggests that both retailer and supplier stand to lose, on average, some 30%-40% of the lost sale in net revenue.

So, if you can increase on-shelf availability from 92% to 95%, both retailer and supplier should gain about 1% incremental revenue, net of changes in product or store substitution and purchase delays.

This post is the fifth in a series on On-Shelf Availability