Research & Advisory

Out of Stock, Out of Luck

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Product Overview

Date of PublicationJune 15, 2018
GeographyNorth America
LicenseEnterprise-Wide Internal - Subject to Fair Use License
FormatAdobe PDF

Ask any retailer in North America about the greatest challenge that they face, and most will mention improving the customer experience.  A close second will be competition with Amazon and Walmart marketplaces. When you combine these two realities we now have a situation in retail where customers that used to HAVE to shop now must WANT to shop.

Today retailers are looking at many different options to improve the customer experience. These can include Buy Online and Pick Up in Store (BOPIS), Click and Collect where consumers pick up purchases at the curb, and Ship from Store have only further exposed the problems of out-of-stocks.

IHL has been studying out-of-stocks for more than 10 years but this the first study that considers the impact of online competitors and the impact of Amazon Prime on consumer’s decisions to visit stores and how they react to out-of-stocks.  In fact, the survey suggests that over 24% of Amazon’s retail revenue comes from consumers that first tried to buy the product at their local stores.

This study goes over the costs of out-of-stocks for retailers and why it is more critical than ever for retailers to focus on the problem as it is driving customers away.

This free research goes over the challenges facing retailers and how controlling the cost of cash handling can free up the labor to meet the needs of the customers in 2018 more profitably.

We would like to thank Radial and DSCO for sponsoring the distribution of this research.  Because of their generosity the research is a free download to others.

  

 

Key Observations:

  • How retailers measure out-of-stocks is vastly different from how consumers define the problem
  • Over 20% of Amazon’s North American Retail revenue can be attributed to consumers who first tried to buy the product at a local store but found it out-of-stock
  • Technology and cultural changes are required for retailers to solve the problem.  The risk of not doing so can be the difference of retailers who grow their business vs. those who are just hanging on.

This is free research, please simply download to read and view.

Is this product really free?
Yes. While the research was conducted independently Radial and DSCO offered to sponsor it so it could be available for free and distributed as wide as possible.  The cost that retailers face for poor inventory practices is enormous and only getting worse.  In a world with the growth of online competitors, it is crucial for retailers to admit the problem and work to solve it before their customers move completely online.  The research that you will read is IHL’s perspective on the subject and benefits, absent of any bias towards a specific vendor approach.

For more information, please feel free to contact us.

This product is free. We would ask that you adhere to our license agreement with regards to quoting sections of the research. Our full license agreement may be found below.

IHL Group License and Fair Use Agreement

All of IHL Group’s generally available research are electronic licenses and can be shared freely within the purchasing organization and wholly owned subsidiaries. We only ask that this information not be shared with partners or others outside the purchasing company without authorization from IHL Group. The license does not extend to joint ventures or other partnerships. If the relationship is not a wholly-owned subsidiary, then both parties would need a license.

Practically, this implies the following:

  1. The purchasing company can use the data and research worldwide internally as long as the international organizations are wholly owned subsidiaries of the purchasing company.
  2. The data or any research cannot be distributed in whole or in part to partners or customers without express written approval from IHL Group.
  3. The purchasing company may quote components of the data (limited use) in presentations to customers such as specific charts. This is limited to percentage components, not individual unit information. Unit data cannot be shared externally without express written approval from IHL Group. All references to the data in presentations should include credit to IHL Group for the data.
  4. The purchasing company can reference qualitative quotes in printed material with written approval from IHL Group.
  5. All requests requiring written approval should be submitted to ihl(at)ihlservices.com and will be reviewed within one business day.

For any questions regarding this policy, please contact us at 1-888-IHL-6777 (North America) +1.615.591.2955 (International) or email us at ihl(at)ihlservices.com.