Stockouts are every retailer’s worst nightmare. Particularly with popular, fast-selling products, stockouts can leave customers feeling disappointed – even betrayed.
Running out of inventory, especially during a sales event or promotion, can damage customer relationships and stress out retailers. Customer service fixes can be helpful, but there’s a cost to those, especially when you need to placate a customer with something special.
Following are 4 totally preventable causes of stockouts (and how to prevent them).
- Not holding back a buffer.
A buffer is what smart retailers create to avoid running out of a wildly popular item. Creating a buffer for those happy moments when your stock is ticking down, means customers don’t know it’s there, because it’s in the stockroom – not on the floor.
The buffer can serve as a welcome surprise for preferred customers, offering them another layer of personalization, with a “just because you’re you” edge.
- Manual entry errors.
The days of manual inventory tracking are over. It’s time-consuming and prone to errors. A much better solution is software that helps you keep accurate records.
Point of Sale software that’s synchronized to an inventory management tool is one of the most effective ways to keep track of what you’ve got in the stockroom. Keeping tabs on what these electronic tools are telling you is the best way to avoid stockouts.
- Missing the boat.
Many retailers know this one well. Because they didn’t anticipate OOS (out of stock) scenarios, they experienced the dreaded stockout.
OOS trends can be tracked using your inventory management software. This will alert you to days of the week you’re most likely to face a stockout and other patterns that can help you avoid it happening. With access to this information, you can order new stock to arrive before stockouts have a chance to happen.
When you’re regularly auditing your inventory and understanding trends, you’ll never miss the boat again.
- Inadequate training.
Investing in effective staff training is the last of our 4 totally preventable causes of stockout. When employees aren’t adequately trained in inventory management procedures, they’re bound to make costly mistakes.
Your staff is one of your business’s most potent resources. They’re where your customers have their experiences of your outlet in the face-to-face interactions which distinguish retail from online purchasing. That means they represent a resource that’s well worth the investment in time and money.
Your stockroom may be adequately stocked and your software working perfectly. Those factors don’t compensate for staff who don’t restock shelves when they’re empty, or know how to read data. Training your staff about the importance of managing inventory to avoid stockouts is crucial.
Part of that training is impressing on sales floor staff the high cost of stockouts and how they impact your relationships with customers. You’re offering them an education in retail marketing which is deeply valuable and one which will stand them in good stead for the future.
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