Thursday, September 10, 2009

Out Of Stock Is A Total Turn Off

That is a basic of the retail industry. Probably one of the first lesson I had while I was a section manager at Auchan: You should never be out of stock. You must have at all time your product on the shelves. Because that is a disaster for the customer if he can not find the products he needs, especially when he is determine to buy it, and needs it now.

Somehow, people believe that if the product is out of stock, people would substitute it with the very same product from another brand. But it seems unlikely. Recent study has shown that customers are not taking substitute if by any chance the products they want is out of stock.

Gina Bingham, senior category manager of convenience and grocery for Pepsi-Cola North America, Purchase, N.Y., said energy drinks bring in some of the most fickle cold-vault customers. "They have the highest walk-away rate at 13%," she said, citing Pepsi's Cooler Study 2008. "The energy consumer has already made the purchase decision before going to the store." She further noted that the energy-drink consumer on average spends about 12 seconds choosing a beverage and will give about 30 seconds before giving up on the purchase.

Meanwhile, Dr Pepper Snapple Group convenience-store consumer study, conducted in conjunction with Meyers Research, shows 52% of the 1,200 consumers surveyed planned to buy a cold-vault beverage when they stopped at the c-store, and 54% actually did buy a cold beverage.

Dr Pepper Snapple Group's Miner added: "Gas-trip shoppers buy more drinks and snacks than those that don't buy gas. That's good reason to try to get more gas buyers to come into our stores."

Further data provided by Plano, Texas-based Dr Pepper Snapple Group shows 77% of c-store beverage shoppers would substitute a product if their choice were missing, 15% would go to another store, and 8% would delay the purchase or note make a purchase at all.

Also, 65% of respondents said they came into the c-store that day knowing which beverage brand and product they wanted to purchase, rather than making the decision on site. And that statistic rose to 76% for shoppers who purchased a carbonated soft drink.

Matt McCourt, director of c-stores for Information Resources Inc., Chicago, added that recent research shows 65% of all shoppers now make shopping lists at home, before leaving for the store.

Hence, it is very important to keep a great supply chain and an in-store organization that enables products to be constantly available on the shelves. On a customer relationship management (CRM) point of view, this is enabling your customers to switch to another store. The fact your customer is sure it will find over and over again the same product in your store is probably one of the main factor that would insure its loyalty. Indeed, not being out of stock is a vital part of the customer experience you provide.