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 In these days of economic downturn, when margins shrink and maintaining sales volume is a major success, it becomes more and more evident that retail is a Customer Centric business. Shoppers have become smarter: they are better informed, read more labels, ask more questions and demand better service and the chance to be heard, which is a new challenge for retailers who are trying to hold down payroll costs. The outlook seems to be distinctive in the sense of how consumers are foreseen to behave in the shortcoming future: they will spend less, visit more discount stores, use more coupons, buy more private-label products and will not be that willing to pay extra for premium brands as they did in the pastIn such a struggling competitive scenario, every single client “walk away” becomes a frustration for Retail management, since it triggers revenue losses and overloads operational costs. It is especially baffling when the reason is an Out-of-Stock The shelf may well be the most worthwhile asset in the retail value chain: in some categories, as much as 70 percent of all purchase decisions are made at the point of sale. Regardless of how many efforts were dedicated to product design& packaging, advertising, sales promotion or trade marketing, the shelf is the crunch where the consumer meets the retailer, the brand, and the product. Willy-nilly, on the shelf is where the last battle for consumer preference is fought  Out-of-Stocks (OOS) remains a global resit subject for retailers and manufacturers. The improvements achieved in supply chain management (ECR, Inventory tracking, order processing…), have not, by and large, rendered enough in terms of reducing the overall level of off-shelfs at store. A number of specific components have been deployed by leading retailers in order to excel in this area: CPFR, Category planning and shelf-space allocation, Automatic re-ordering systems, Physical Gap controls, increased Safety stocks… However, it seems that the problem remains yet unfixed Average world wide OOS rate is estimated in an 8.1%. Sales lost due to OOS represent some 3.8% of total sales. The impact in profitability is gorgeous and the opportunity quite substantial for profitability enhancement Root causes for OOS are multiple ( i.e.: shifts in consumer demand, promotional planning, ordering processes, supply chain disruptions, quality of inventory data, allocation of shelf space to case packs, planograms management, replenishment procedures,…) and mostly hover on in-store inventory handling and replenishment processes Leading Retailers need to move boldly to tackle this looming competitive challenge. The path to success is focus on key drivers and processes generating OOS (Read more). ATOSSM (Always there On-Shelf), a third generation Business Intelligence tool, provides valuable solutions to retailers when reducing OOS. Based on PoS, Inventory, Order process and Space allocation data, it consistently reduces OOS by a 40-50% (Read more) |
