Why do out-of-stock occur?

1. Incorrect forecasting
Some items go out of stock more quickly than initially anticipated, e.g. as a result of an advertising campaign. This also happens with seasonal products. These demand fluctuations are taken into account in analytics, but classical methods are not always sufficient. If there are forecasting errors, the occurrence of out-of-stock is also likely.

2. The shop's shortcomings

• Slow staff work. The goods have already arrived in the warehouse, but the staff have not yet put them on the shelves. This situation is possible if there is no clear and structured interaction between shop floor and warehouse staff.
• Accounting inaccuracies. Stock items in such cases are listed in the system, but are actually absent in the hall. Phantom inventory also causes accounting inaccuracies. The system shows there is an accounting unit but in reality there is none. Sometimes parts of an assortment are stolen and damaged, leading to similar consequences.

3. Supplier errors:

• Logistical problems. The retailer stipulates a delivery schedule when ordering, but the supplier fails to comply with the terms of their agreement. The retailer doesn't have the products on the designated date, so the shelves are empty.
• Slow production. The brand is actively developing, but the production capacity is insufficient to satisfy customer demand.

Possible negative consequences

• Reduced customer loyalty. Visitors don't find what they want, so they go to a competitor. According to statistics, about 40% of shoppers do this. The problem is especially common in areas with a large number of shops, where people have the opportunity to choose among different outlets.
• Loss of profit. This point logically comes out of the previous one. The flow of customers who can't find the right products decreases, which makes the revenue less.
• Difficulty of forecasting. Customers, not finding the product, often choose products or products of other brands. Subsequent forecasts can make mistakes, resulting in new financial losses.

To avoid unpleasant consequences, you need to minimise out-of-stock.

Ways to combat OOS

It is difficult to eradicate the phenomenon completely, but it is possible to improve the situation:

• in-depth monitoring of sales figures
• accurate inventory control
• inventory control
• optimising supplies
• introducing modern tracking systems such as smart shelf or video analytics.