Supply Chain Management

Out Of Stock Problems: What is OOS and How to Prevent Stock Loss

The field rep searches the aisles, a clear memory of his company’s beautifully arranged beverages in his mind. “It should be here somewhere,” he thinks, making lap after lap around the beverage section of the store.

After the rep checks his records and speaks to a store employee, he realizes the product has already been out of stock for a couple of weeks. With a sense of dread in his heart, he picks up his phone to dial his manager and report the out of stock (OOS) problem.

For beverage products, out of stock instances can be a costly issue. With so many competitors in the food and beverage industry, it is easy for a consumer to see that her desired brand is out of stock and grab another brand. A study funded by Procter & Gamble reports that out of stock instances have significant strategic impacts. They result in a direct loss of brand loyalty and equity and encourage the trial of competitors’ brands, which can lead to a permanent consumer switch.

As an emerging beverage business, it is vital to retain as many customers as possible and to build strong customer relationships with them. If your product is not available to customers when they want it, the customer loyalty they feel towards your brand will begin to deteriorate. Consequently, OOS results in a loss of sales for both the beverage brand and the retailer - according to Harvard Business Review, over 40% of customers will go to a different retailer in order to buy their preferred product.

The Solution

The first step to solving your out of stock problems is figuring out the cause. Does the retailer contact you when they think the product will sell out? Are your reps visiting the retailer often enough? Once you find the cause, you can adjust accordingly. You can also easily remedy OOS by using Mobile CRM software to perform regular retail audits. This way, field reps can prove the beverages’ availability on the shelf through photographic evidence. Reps can also check the beverages’ price and promotion.

To truly demonstrate how much fixing out of stock problems can save you, this case study of a beverage supplier forecast that a 5% cut in their OOS would equate to $1.5 million in added revenue. By fixing your out of stock problems, you can avoid a loss in sales and ensure that your customers can always find your beverage whenever they want it. Feel free to share any OOS mishaps you have encountered in the comments section.

 

 

Nancy Chen

Nancy Chen is a Content Marketing Intern at Repsly, Inc. and is currently completing a Marketing degree at Northeastern University. A contributor to the national online publication Spoon University, she is experienced in delivering knowledgable, quality material to readers.

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