The Picking Series – Product Availability

In athletics, consistency is king, and athletes live by the phrase “the best ability is availability.” For grocers, the best ability is “product availability.” Delivering quality products exactly when and where your customers expect to see them is the cornerstone of an effective operation. Product availability is the metric that retailers can use to track this aspect of their business. Grocers lost $11B in H1 2022 due to unavailable or unsubstituted items, and up to 1 in 5 households with children have shifted primary grocers due to out-of-stocks. By understanding and leveraging visibility in this area, grocers are able to drive improved results moving forward.

Availability is critical across all grocery channels, from the physical store to the digital store, and disruptions on any front will create friction with shoppers. Product visibility expectations of grocers have risen over the past few years and can no longer go ignored due to being a fundamental step in the shopper journey. Consumers won’t overlook disruptions for long. It’s important to truly grasp the consumer perspective, particularly with product availability on e-commerce orders. Consider two scenarios:

• In a typical out-of-stock situation, a consumer might go to the grocery store looking for a product and discover it isn’t available. They’ll either make a substitution choice, forgo the item, or (in the worst case) go to a competitor’s store to find the desired item.
• On an e-commerce order, an out-of-stock plays out differently. The consumer has already selected the item and “purchased” it, so when the picker turns up empty handed, they experience a loss of something they perceived to have possessed.

The e-commerce experience is different, with a higher ceiling for disappointment. Because consumers place their orders based on available items in the e-commerce store-front, they’ve already expected to purchase the items in their basket. Substitutions are often viewed by grocery retailers as a successful sale, but to the consumer they are a failure to deliver a requested product. This isn’t a truly satisfying experience – the customer still didn’t get what they wanted. The best way to overcome this dilemma is by managing customer expectations. Improving stock records, getting ahead of product disruptions, and keeping your product offering up to date will decrease the percentage of your customers who are frustrated with your brand.

Doing so is no easy feat, and overall availability has traditionally been difficult to measure. The introduction of e-commerce radically changed this. Comparing products ordered online to those fulfilled provides a true reflection of what items were actually available at the time of purchase. Framed by grocery e-commerce, product availability (often referred to as “on-shelf availability”) is Separated into two distinctive categories: pre-sub and post-sub availability. Pre-sub availability is the measure of successfully providing products to consumers without disruptions and before any substitutes, and used as a general overview metric. Post-sub, a focussed view of your operation, is the measure of how many missing products were successfully substituted.

Measuring the information isn’t enough , and departments must act on the reports available to them to keep ahead of stock issues. For example, pre-sub visibility can be used to trigger re-orders, or to understand which product lines are experiencing external issues (e.g. supply disruptions) that will call for more effective measures. Post-sub visibility can give direct measurements of how much money retailers are leaving on the table. Post-sub can additionally be used as an internal coaching metric to help pickers improve product quality, substitution accuracy, and picking times on substitutions.

Improving product availability will drive profitability and secure customer loyalty across every channel. As retailers learn to maximize assets – like the store – the next step is to consistently deliver quality to their customers. In an era of uncertainty, the grocery retailers that provide that consistency to their consumers will come out on top!