What to take into account for a successful holiday hiring season
The retail supply chain was hit hard by the pandemic of 2020-2021, and three years later, it has yet to return to the stability seen before the pandemic.
This is not beneficial for retailers who are trying to maintain product availability and ensure customer satisfaction. Research has shown that today’s consumer will quickly move on if an online product is out of stock or unavailable at checkout. They are also not particularly fond of empty shelves where their favorite product used to be easily accessible. Indeed, 24% of U.S. consumers would forsake their shopping missions and exit the store without purchasing the other items in their baskets if they encountered empty shelves.
Recent data from Retail Insight indicates that 78% of U.S. shoppers have encountered out-of-stock products in stores over the past year. Moreover, 68% of consumers have encountered the same problem of items being unavailable online.
When inflation and cost-of-living problems are factored in, retailers still face challenges comparable to those of two years ago.
However, retailers can tap into solutions that are within reach by utilizing real-time data to establish a consistent perspective on inventory levels and being agile and efficient in restocking shelves—factors that contribute to customer satisfaction and loyalty.
In an email interview, Retail Customer Experience contacted Paul Boyle, CEO of Retail Insight, to gain insights into what retailers can do and the current supply chain challenges brands face based on research from Retail Insight.
Q. How would you characterize the retail out-of-stock situation overall at this moment?
Undoubtedly, the issue of being out of stock in retail is a major challenge, and many consumers think it has worsened since the pandemic. This phenomenon is so pronounced that research from Retail Insight indicates that 75% of shoppers currently believe that product availability has worsened even beyond the deterioration experienced during the COVID-19 pandemic.
The pandemic had a significant impact on the retail supply chain, but more recent factors—especially the macroeconomic environment and related labor difficulties—have become the main contributors to the current out-of-stock problem faced by retailers.
Although these issues are not as urgent as some of the problems caused by the pandemic, they are more systemic in nature. They require retailers to execute key aspects of their in-store operations more effectively in order to maximize product availability and ultimately provide better service to their customers.
Q. What is the consumer perspective on items that are out of stock? Does its strength drive consumers to seek out other brands, or are they not as capricious?
According to A Retail Insight data, 30% of U.S. consumers would reconsider their loyalty to a grocery store if out-of-stock situations became commonplace. Moreover, if they notice an empty space on the shelves, 24% more of them would give up their shopping mission entirely and exit the store without making additional purchases, thus raising the likelihood of switching to a rival. With the current state of retail, shoppers have developed a habit of expecting instant access and availability. When a retailer does not meet these expectations, customers readily seek alternatives.
Q. With the holiday season approaching, what actions should retailers take regarding their stock inventory strategy—should they strive to prevent consumers from having that experience at all costs, or should they aim to compensate those who do have it?
A. According to a Retail Insight survey, 56% of shoppers indicated that out-of-stock items were more noticeable in the lead-up to Christmas. Thus, it is evident that customers pay attention to whether products are available during the holiday period. In order to avoid the disruption of out-of-stocks during the bustling, food-focused holiday season, retailers must have an accurate understanding of which products are available on their shelves for customers. Although many retailers resort to gap scans, this method is very labor-intensive, consumes valuable time, and only provides a snapshot of availability at that moment. However, by employing a data-driven strategy for tracking product availability, retailers can fully understand the problem, resulting in enhanced operational efficiency and higher sales. With this data, retailers obtain a comprehensive, real-time view of the availability challenges they are encountering. With this information, retailers can guide store associates to the locations of out-of-stock items, eliminating uncertainty and boosting labor efficiency. Additionally, it can facilitate the generation of automated insights that allow associates to dedicate more time to serving and selling to customers—an essential task during the holiday season’s ‘golden quarter.’
Q. Where and in what way does real-time data assist in addressing the problem of out-of-stock situations, and do the majority of retailers understand that this data is essential for resolving the issue?
A. To guarantee that customers can always purchase what they want at the desired time, real-time data is essential. Once an item enters a retailer’s distribution center until it is bought by the customer in-store, there are countless data points that can serve as an accurate, continuous availability monitoring tool when used effectively. However, it is not easy to fully leverage this data. To analyze, leverage, and act on insights derived from real-time data effectively, retailers must embrace advanced cognitive technology—a distinctive combination of artificial intelligence and specialized knowledge. With the increasing recognition of the significance of real-time data, it is probable that a greater number of retailers will adopt advanced analytics solutions in order to remain competitive and deliver a seamless shopping experience for their customers.