Out of Stock, Out of Mind?

While sales and market share indicate how well a product is performing currently, satisfaction is perhaps the best indicator of whether customers will continue to purchase the item in the future. With competitive offerings abound, the consequence of even one bad experience can be a customer who is lost to a competitive offering.  On the other hand, a consistently satisfied customer will pay off in his or her repeat business – and with a little luck – positive word of mouth and recommendations to friends and family.

A less-than-perfect experience can come in countless ways, with the packaging and product itself being only part of the equation. The sales experience, whether online or in-store, can be just as important. As it turns out, you may have a dissatisfied customer on your hands without even making a sale!

The fourth annual Supermarket Experience Survey by the Retail Feedback Group found that supermarkets generate high satisfaction among their shoppers at an average of 4.4 on a five-point scale, where five is highest. Specifically, shoppers were greatly satisfied with supermarkets’ customer service, their deep assortment in grocery/food offerings and sales promotions.

However, the greatest cause of customer dissatisfaction with the overall buying experience in the supermarket channel turned out to be out-of-stocks. Satisfaction among shoppers who were unable to find all items they had planned to buy that day averaged 3.9 on the five-point scale, compared with 4.5 among shoppers who did find all items. Likewise, shoppers who did not find all items he/she came in to purchase were much less likely to recommend the store to others. Dissatisfaction was even greater when the item they wanted to buy was on promotion. Importantly, out-of-stocks may have big consequences:

  • 45 percent of out-of-luck shoppers went or plans to go to a different store to purchase the item

  • 37 percent forego the item

  • 16 percent buy a different brand or size

  • 16 percent buy a different item at the store instead

Whether you look at these statistics from the side of the retailer or CPG manufacturer, the consequences of out-of-stocks are anything but good.

  • Supermarkets run the risk of losing business to other outlets; manufacturers may lose a valuable customer to the competition; or both the retailer and manufacturer are out of luck when the customer foregoes buying the item altogether.

  • The potential impact of empty shelves on customer satisfaction and lost sales is evident and the industry should carefully weigh the advantages of low inventories and just-in-time management against happier, more satisfied customers.

  • By working closely together, manufacturers, wholesalers and retailers can maximize inventory productivity, while maximizing the sales experience. Sharing knowledge of the customer, inventory turns patterns and the influence of season, promotions or competition can help improve results all the way around.

Journey Awareness Persona C-Suite/Finance Marketing Retail