3 Key Benefits of Out-of-Stock Analytics

We’ve all been there as consumers — you stop by the store to pick up three ingredients for dinner, but discover one isn’t on the shelf. You may ask customer service whether there are extras in the back, but because most retailers take a just-in-time approach to inventory management, you’re likely out of luck.

Retailers work hard to avoid disappointing shoppers and understand how critical it is to find the right inventory balance. Avoiding stockouts of the most popular items, while avoiding an overstock of slower-selling goods, is essential to meet sales goals. These decisions used to be managed manually, but today automation-based tools, such as Stock Status reports, give brands deeper visibility into inventory activity across the supply chain in real time. As a result, stock availability data is accessible across all platforms that are plugged into inventory solutions to share the most up-to-date, precise information.

Stock Status reports help brands make strategic short- and long-term inventory decisions by:

• Giving managers advance warning about potential shortages. The sales impact of stockouts quickly adds up. A Nielsen report calculated that 7.4 percent of sales were lost in 2021 because products were out-of-stock, totaling $82 billion. That’s a significant loss for a situation that’s entirely avoidable.

• Reducing customer churn and retaining brand loyalty. When a consumer is faced with an out-of-stock product, they have three choices — select an alternative brand, check a different store, or forego the product altogether. The first is a loss for the supplier, as the consumer’s loyalty may be damaged. In fact, Syndigo research has found that three in four consumers are inclined to switch to alternative brands when their preferred brand is unavailable.

• Helping combat “phantom inventory.” Another negative scenario is when a customer orders an item that’s marked as in stock, only to receive a notice shortly after that it’s sold out. Now they need to wait longer than expected or start a refund process. These types of phantom inventory errors can seriously impact trust. How can a customer be certain they won’t come across the same issue the next time they shop on that site?

More accurately tracking inventory can help prevent these scenarios. By monitoring supply levels, it’s possible to limit stockouts caused by unexpected demand — enabling a brand to potentially save the customer relationship and sales.

Unlock Stock Availability Insights

Using Stock Status reports, brands can closely track supply levels and better predict when they’re most likely to run out of specific items. Combining these automated reports with solutions such as master data management (MDM) or product information management (PIM) systems expands this visibility across the retailer’s supply chain, helping managers anticipate potential supply shortages weeks in advance and stock up early, or divert their orders to other suppliers.

Retail success comes down to variety and availability. Are the right products in the right places at the right time? This is why brands need deeper visibility into their product data to monitor sales trends so they have time to add inventory or prepare to offer product alternatives in the event of a stockout. Without the speed and accuracy of inventory automation, they won’t be able to keep up with constantly changing shopper preferences or plan more strategically for the future across their retail partner network.

Benny Blum is senior vice president of product at Syndigo, a SaaS commerce data management solutions provider.