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Merchandising

What's Worse than an Out of Stock / Stock Out? A: Product Voids

For many business owners, nothing is worse than an out of stock incidence. Lost profits, as well as potentially lost customer loyalty, hurt a business. So what could possibly be worse than a stockout? Here is an introduction to the stockout’s sister problem, product (distribution) voids. Product voids are often overshadowed by the overwhelming concerns about stockouts. We should be concerned about these voids: A case study of Brand KeepWell has demonstrated that out of all the retail locations, only 19% of opportunities (stockouts plus voids) were stockouts- the other 81% were voids. With a product void, not only is the product out of stock, but its placement completely vanishes from the shelf altogether.

How does this happen?

Retail shelves are notorious for being hard to manage. Customers pick through products all the time, typically not placing a product back where it belongs if they decide they no longer want it. Children run up and down the aisles, brushing against shelves and knocking shelf tags off. The shelf tag will lie on the floor, kicked out of sight by the passage of many shoes, and go unnoticed by the retail employees and probably your field rep as well.

With some retailers, it’s also an accepted practice to remove shelf tags if no products can be found, thus hiding holes and making their shelves look better (Gruen & Corsten). Then when your field rep goes to check the shelves, they don’t know that product was even distributed to that location because they don’t see it on the shelf and don’t see a tag to scan, so they don’t reorder it. This results in your product virtually disappearing; it not only goes out of stock but out of distribution as well. This is an issue because it is could potentially be your most popular product, since it sold out so quickly.

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How do we fix this?

The simple answer: Field Activity Management (FAM) software. Since this issue is hard to catch without historical data, Field Activity Management software works because it can provide you with a list of all the products that should be on the shelf as well as the products that were placed in the last order. 

Like in out of stock prevention, data collection and regular audits are key factors in preventing distribution voids. You can pinpoint voids by integrating point of sale and retailer ranging data, according to IRI Worldwide. In addition, you can also determine which stores should be carrying which products by looking at retailer agreements, and target the stores that are list products but do not carry them. Ensure that your field reps conduct more audits at these stores, but also be sure to conduct regular audits at all your stores, as regular merchandising can reduce lost sales from voids by over 50%.

All of this data needs to be stored somewhere- it wouldn’t make sense for your rep to flip through papers during their visit or call the home office for data. Field Activity Managementmakes the data easily accessible to all of your reps by storing everything in the cloud. This way, they can quickly pull up past orders to cross-reference and double check their list with. Although product voids in distribution can be hard to track and manage, if you collect thorough data and make use of that data through integration of Field Activity Management software, you can be sure that your product will no longer be a disappearing act. Your products will remain in the distribution cycle where they belong and continue earning profits for your business now and in the future.

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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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