retail news in context, analysis with attitude

by Randy Fields, Bruce Christiansen and Sage Horner

Out-of-stocks send empty-handed customers scrambling toward store exits. Of course, in the world of consumer products more can go wrong than running out –underestimating shrink or dealing with labor issues, for example. But when it comes to keeping customers happy and bottom lines fat, nothing is as potentially disastrous as an out-of-stock. According to the Grocery Manufacturers Association, out-of-stocks cost retailers and manufacturers more than $6 billion in retail sales each year. The Retail Feedback Group reports that when a shopper can’t find what they want, 50% will leave the store to purchase at a competitor, that’s up 64% from six years ago; 38% won’t purchase the item at all, a 30% increase in six years and only 12% will switch brands, that’s down 20% from six years ago.

Be careful not to overcorrect, though. Holding too much product means demand was overestimated and that means your forecasting engine is off. Proper inventory management increases product freshness, reduces overstocks, and ultimately reduces returns. The market is littered with companies that over-purchased the wrong products and under-purchased the right ones. Do excessive markdowns send the wrong message to your shoppers? The freshness of the product is a key part of the customer experience and is a differentiator that will bring them back again and again. Profitability is maximized for retailers and suppliers by eliminating the need for excessive returns or markdowns.

Park City Group provides robust, collaborative supply chain, merchandising and store level solutions for both retailers and suppliers that increase sales, improve operational efficiencies, such as shelf replenishment and merchandising, optimize inventory and reduce out-of-stocks. Our innovative, cloud-based solutions provide trading partners a common platform on which they can capture, manage, analyze and share critical data, bringing greater visibility throughout the supply chain, and giving them the power to make better and more informed decisions.

Next time we’ll talk about another thing that’s really keeping retail and supplier executives up at night – food safety. In the meantime, we’re interested in your feedback, so feel free to contact us today. We’ll listen to your challenges and then help you develop and execute a plan to Sell More, Stock Less and See Everything: Email us at, or call (435) 645-2205.
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