Solving the out of stock problem in retail
Riding on the wave of the Melbourne Fashion Festival, today’s article will delve into out of stock problems faced by fashion retailers.
Fashion retailers are forever contending with the optimized inventory challenge. Customer preferences are clearly changing in today’s omni channel environment. They expect to have a full assortment of purchasing options across multiple channels. And they expect inventory is updated instantaneously across all the channels. Needless to say, real-time inventory management is commonly reported as one of the biggest concerns and challenges for retailers. And stock-outs – easily retailers’ worst nightmares.
“Stock-out” describes the disappointment a customer feels when they research online and the item is unavailable when they walk into store. You’re a consumer, I’m a consumer – we’ve probably all experienced it: We make the effort of physically going to the store only to discover the dreamy dress, shirt or shoes we want are not available in our size in that particular store.
This situation is problematic for both, customers and retailers for several reasons.
The consequences of Stock-outs
Not being able to provide what customers want, when they want it is a tremendous source of distress for retailers and consumers. That’s especially true during busy sale/promotional periods. Out of stock situations result in disappointment for the customer; cause a staff frustration and 60% of the time lead to a lost sale.
There are many negative effects of being out of stock but here are a few:
1. Lost sale
Customers often enter the store because it’s the fastest way to touch, feel and try products when required. Almost 76% of Australian consumers prefer bricks-and-mortar stores over online retailers because of that experience (according to a recent study by Mood Media).
- Stock-outs not only lead to the immediate loss of revenue but eventually to a loss of future sales. The statistics speak for themselves, 60% of in-store shoppers become lost sales when faced with a stock-out. When customers can’t find the precise dress, shirt or shoes in their size at that particular store, they will leave disappointed. And most likely, they’ll find an alternate vendor for an item and buy it at another store. Will they come back again? Maybe, BUT if it happens a few times they’ll be gone and you won’t even know why.
- If you have inconsistent sizing and they do buy from you online then your return rates are probably higher than average and that’s costing you lots more than you think.
- The time spent by your store staff on busy days searching your POS system for that item, calling other stores, interrupting the team in other stores, waiting for them to see if that item is actually still on the rack/shelf, etc. is better spent selling to other customers who walk in & then walk out because of lack of customer service because your ‘spare’ staff member is on the phone.
2. Disappointed customers express their frustration
Customers want their shopping experience to be as seamless as possible across all channels. Naturally, items or sizes being out of stock remain the most common source of frustration across Australia (56% according to a recent study by Mood Media). Negative purchasing experience, i.e. not being able to purchase the dress, shirt or shoes due to the stock-out will leave your customers disappointed.
- Moreover, in today’s complex retailing world, customers increasingly turn to social media to spread the word about their negative experience with particular companies and vent their dissatisfaction in this manner. And we all know it takes a lot of positive reviews to make up for a negative one.
3. Frustrated staff
Customers get annoyed finding out that the product is out of stock. Annoyed customers express their frustration by aiming their anger at staff members. Your staff deals with customers of all types. And they do not always have a strong sense of understanding. As a result, staff and management time are consumed dealing with unsatisfied customers leaving your staff frustrated and resentful.
A simple solution to prevent walkouts
Being out of stock may cause more damage than one would assume.
The great retail challenge is getting the right product, in front of the right customer, at the right time.
Your customers want to put their hands on that dreamy dress, shirt or shoes right now. They are too busy to wait. Thankfully, the many consequences of stock-outs may be prevented. While it’s impossible to attain zero stock-outs, retailers should be flipping the concept around and tell their customers where to go to find what they’re looking for.
Customers should have immediate and real-time access to product information. In order to really tackle this challenge, it is, therefore, essential for fashion retailers to empower customers to coast between their online and offline contact points.
Iconic women’s clothing brand, KOOKAÏ understands the importance of the real-time stock availability. Australian womenswear label positioned their online stores in a way so they complement physical stores. By implementing stockinstoreTM on their website, KOOKAÏ drives foot traffic into stores by showing online visitors which stores nearby have the item they are looking for. This type of interaction not only solves the out of stock problem but also creates an exceptional customer experiences.
stockinstore™ is making retail better by creating a world where every retailer can easily offer the customer location-based shopping.
Get in touch now to find out how stockinstore™ can help you solve your out of stock problem.
*Mood Media (2017), The State of Brick and Mortar: 2017.