According to a study from Nielsen, on average, 50 percent of consumers decide to switch stores or brands when they are not able to find the product on the shelf at the initial point of sale. A result of this decision is a direct loss of sales – for the retailers and supplying distributors or manufacturers.
In most cases, this could have been easily avoided through the use of solutions that provide indictors, such as On-Shelf Availability (OSA). OSA allows the point of sale to control the availability of products on the shelves according to their sales forecast, sales volume and history. For example, an alcoholic beverage, such as beer, may sell more on a weekend compared to a weekday and stock replenishment must be foreseen and adjusted accordingly.
With the adequate visibility, shortages can be identified, the so-called OSA problem. Indicators can inform the possible root causes of these shortages, which helps the retailer to act to solve the problem. The many reasons for shortages may be the product unavailability in the inventory, for example. In this case, the store can investigate when and why the problem occurred at this location.
The use of OSA indicators allows manufacturers to verify whether their products are properly replenished on the shelves and monitor if the person in charge of replenishment is performing properly. Managers at the point using this method are able to put in place preventive action to avoid shortages and customer and sales losses.
Using the right technology to guarantee OSA can have a positive impact on retailers and manufacturers alike. The right system working on top of existing systems at each location can help balance the inventory levels, manage the flow of goods and keep the shelves full continuously. This results in satisfied customers and a competitive brand.
Keep following our series about OSA on the blog!