Retail Interest

Retail Case: What are stock outs really costing you?

by Jimmy Ho on 10/05/2016

Using the latest retail audit technologies, it’s possible to get a complete picture of your stock situation from any location within hours – here are some surprising results from a recent nationwide Audit in Hong Kong.

(Nationwide OOS (Out Of Stock) audit program in Infant Milk category in Hong Kong, covering 1,200 chain supermarkets and personal care (Wellcome, ParknShop, Watsons & Mannings) stores. 20 SKUs audited from 5 major brands)

  • OOS rates may be higher than you think – across all brands and retail chains they ranged from just 2% to a massive 58% for major brand SKUs.
  • OOS rates vary significantly by retail chain – across all chains covered, the best performing chain recorded an average OOS rate across ALL products of 7%. The WORST performing chain recorded an average OOS level of 29%.
  • Worse performing chains perform poorly across ALL brands – they consistently recorded the highest OOS levels for all brands and individual product SKUs audited.
  • There is significant variation between brands within a particular chain;

a. In the worst performing chain, brand OOS ranged from 10.7% to 47.9%

b. In the best performing chain, brand OOS ranged from 3.38% to 11.28%

  • Problems persist without corrective action – by looking at brand level and SKU OOS rates at chain and individual store level, it is possible to identify consistently ‘poor performing’ chains and locations. These tend to persist as OOS hotspots without corrective action.

Through escalation and dialogue with retailers, it is quite possible to drive a broad based improvement in OOS performance over time – and with it, sales performance.

But you need to know if and where opportunities for improvement lie. New retail audit technologies enable the collection of OOS data from any location within hours, and from thousands of locations in just a few days. With instant access to data and store/ shelf imagery you have everything you need to understand strategic and tactical stocking issues and implement rapid fixes where required.

Red Ocean Solutions – Real time Retail Audit and Intelligence from any Location.

Find out more here.