Product Availability: The Key to Sales Growth

Product Availability: How to Ensure Your Customers Always Find What They Need?

The frustration of going to a store to purchase a specific item and not finding it in the aisle is a feeling almost everyone has encountered at some point. For retailers, such product availability issues can have significant consequences. The problem is not only that it makes them miss out on sales. It also directly impacts customer satisfaction and loyalty in the long run. And yet, maintaining enough stock to meet demand without immobilizing capital in an inventory that just won’t shift is a delicate balance to keep. This is where stock optimization comes into play. Let’s explore the best strategies at your disposal and delve deeper into how Digital Price Tags can help you maximize product availability in your store.

What Is Product Availability?

Product availability refers to the customers’ ability to find the item they are looking for on the shelves. From the retailer’s perspective, the concept isn’t as straightforward. It translates into ordering and storing inventory to make sure shoppers always find what they need without ending up with unsold stock sitting there indefinitely. In the ever-changing environment of the retail landscape, inventory management often means contending with unforeseen changes in supply and demand, making the task of ensuring optimal product availability particularly challenging.

How Does Product Availability Impact Customer Satisfaction & Loyalty?

The link between product availability and customer satisfaction is evident: If shoppers find everything they are looking for anytime they visit your store, they’re happy and will likely come back. On the other hand, if something always seems to be missing and they have to go to a different store to purchase the items in question, there’s a higher chance that next time, they will simply go straight there. Ideally, you want to be that other store—the one people go to when they want to be certain that their expectations will be met.

Challenges in Managing Product Availability

Achieving the perfect balance in product availability is challenging because it implies you must have control over various processes and metrics, including:

•   Stock Levels – You need access to real-time data about your stock levels, providing constant visibility into product availability in the aisles and your inventory.
•   Inventory Turnover Ratio – This gives you a clear idea of how desirable each product is so you can adjust your strategy to meet the demand forecast.
•   Low Stock – Low-stock alerts should be raised early to prevent stockout.
•   Carrying Costs – Inventory carrying costs (including transportation, labor, storage, handling, taxes, insurance, depreciation, shrinkage, damage, expired items, etc.) and how they translate into your total inventory value.
•   Meeting the Demand – Customer expectations, when not met, encourage shoppers to seek out a more reliable option. Providing customers with enough visibility into your stocks can help curb disappointment. It may even spur buying decisions, capitalizing on FOMO when the stock is just low enough, but availability is still guaranteed for those who act quickly.

Strategies for Ensuring Product Availability

Managing product availability is not a game of chance! With the right tools and strategies at your disposal, you can optimize your supply chain and inventory management to boost your performance and customer satisfaction.

Inventory Management

Inventory management is the key to ensuring all-time product availability in your store. While manual inventory management is a tedious and error-prone process, investing in an automated inventory management system will provide you with real-time data about stock levels. Advanced solutions can even analyze the information in light of past and predicted supply chain trends to give you insights into customer behavior.

Demand-Based Forecasting

Your inventory management system can come equipped with forecasting software, allowing you to predict stock movements based on sales forecasts, seasonality, and historical demand. This is computer-assisted stock management at its best, helping retailers remain within that perfect status between overstocking and stockout.

Automated Reordering

By the time your staff has identified upcoming stockouts and placed orders with your suppliers, it may already be too late to guarantee product availability on the shelf, particularly if they need to manage inventory for multiple locations. Setting automatic inventory reorder points ensures the system will send the order through the minute the threshold has been reached. Better yet, reorder points can be calculated and adjusted in real time ahead of demand fluctuations.

Regular Auditing

In addition to keeping your inventory up-to-date through automation, don’t neglect to perform physical audits regularly. This will ensure any inconsistencies will be identified early on while allowing you to assess the need and feasibility of increasing your storage capacity, moving certain items to a more suitable location, and correcting other potential inefficiencies.

Relationships With Suppliers

Keep your suppliers in the loop! Sharing information about your strategies and collaborating with your suppliers efficiently will help everyone involved work toward optimal product availability.

The Role of Technology in Product Availability

The VusionGroup ecosystem is designed to help you leverage the full potential of connected technology to optimize product availability in your stores. From inventory management to real-time shelf monitoring and strategy enhancement, VusionGroup’s solutions give you access to advanced in-store IoT technology to refine every aspect of your store management through a connected network of digital price tags.

Going even further, the Captana Cameras Shelf use AI and Computer Vision to drive every aspect of your store. Thanks to GDPR-compliant mini wireless cameras paired with IoT asset management and retail task management capabilities, it delivers real-time shelf monitoring data and analyzes shelf movement to help run stores more efficiently without monitoring individuals. This helps increase top-line revenue and maximize gross profit margins through AI-enabled retail forecasting.

VusionGroup’s systems easily connect with your existing applications and products, ensuring smooth integration and a streamlined experience. Hardware and software come together seamlessly to improve shelf performance through automation.

Key Performance Indicators (KPIs) for Monitoring Product Availability

Summing up, product availability poses several issues, ranging from inventory management to supply chain bottlenecks, mismanaged orders, disrupted processes, and unhappy customers. Maintaining product availability requires constant monitoring of inventory movements and an understanding of how they are affected by situational factors such as customer behavior, seasonality, trends, supply, and demand. To this end, certain KPIs are worth including in your analyses.

• Average stock indicates the average volume of products your inventory contains over a given period of time.
• Optimal stock refers to the specific number of products you need to have in store to meet demand without running out or overstocking.
• Average stock loss points out any stock sitting in your inventory, unmoving for a given period, or unaccounted for. This could be due to obsolescence, spoilage, administrative errors, theft, etc.
•  Stock shrinkage corresponds to the difference between the stock your inventory management software lists and the real stock available. Regular audits will help keep this metric in check.
•  Storage time indicates how long a product remains in storage before it is sold. This directly impacts your store’s liquidity.
• Inventory turnover rate shows how long it takes for your inventory to be replenished. When storage time is reduced to a minimum, this metric naturally goes up.
• Sales-through rate or direct sales rate represents the percentage of inventory sold vs. inventory received from the supplier. This metric can be used to detect changes and trends in product turnover.
• Service level is an indicator that shows whether your available inventory is likely to meet the demand. Ideally, you’ll want this metric to be as high as possible.