Keeping the Shelves Full: Missing Items on Store Shelves Annoy Customers and Drive Down Revenues Say Deepak Mishra and Martin Schuler (Industry Insider‪)‬

At a bar, the manager will tell guests personally if a meal is no longer available. That's not the case in the retail world. Store personnel do not usually find out that customers are looking for certain products, or that these may not be available on the shelves. An average 5% of products are missing from shelves in European supermarkets at any one time. Many stores even have gaps of 10% or more. Some retailers are satisfied with a shelf availability of 95%; they argue that it is not worth trying to achieve a higher ratio because of the costs. This argument is hard to sustain today. Top performing retailers have shown that it is possible to have almost 100% availability at an acceptable cost. Consumers who can't find their products get frustrated and often shop elsewhere. A full product offering therefore increases customer satisfaction and loyalty--as well as revenues. This makes shelf availability a serious concern for CPG companies, as well as for retailers. In fact, a 3% increase in availability can lead to additional revenues of about 1%. A select few companies are now tackling the shelf availability issue head on, using an approach that aims to increase the availability ratio tangibly and very fast, and to anchor those improvements for the long-term. This approach has proven to be highly effective in practice, reducing out-of-shelf situations by 3-5 percentage points in only 12 weeks, which in turn generated revenue growth of 1-2%. The new approach has three steps: (1) measure availability regularly and systematically; (2) implement high-impact actions that take effect fast; and (3) introduce subsequent actions to ensure sustainability.