The most recent report penned by landmark researchers Thomas Gruen and Daniel Corsten furthered their deep understanding of the OOS problem in grocery retail. In this case, they’ve highlighted what might be looked at as the proverbial light at the end of the tunnel…one that’s actually a train. Online availability (OLA), or its inverse, Not Online Available (NOLA).
Past reports from these researchers have brought further to light the pervading OOS rate of 8.3% over the last 15+ years (longer if you consider studies predating that of Gruen and Corsten).
They’ve now found that in the rapidly emerging online arena in retail grocery, the OOS rate is over 15%…with costs in the $22 Billion range.
The report combines data gathered from retailer websites over time with that of customer surveys to determine the level of product available, and when it’s not, what consumers are apt to do. For example within NOLA instances in the US:
- 15% of shoppers switched online stores
- 60% substituted from same merchant
- 50/50 between brand and within brand switch
- 10% went to brick & mortar
- 15% delayed or canceled their purchase
So, with all this discussion of “switching,” you might think about it this way:
- Store switch – bad for store
- Brand switch – bad for brand
- Any kind of forced-switch – bad for the customer
Itasca retailers’ customers don’t have this problem. The main reason, as Frank Urbaniak, of C-Core Consulting, weighed-in, “The grocer with a well-executed CGO platform will have better in stock positions, higher sales and offer a better overall customer experience. An improved web shopping experience is just another benefit.”
We’ve been knee-deep in this challenge since the early 2000’s and has helped retailers like Price Chopper (New York), Sobeys, Wegmans, and SpartanNash overcome these challenges with one very simple activity: Ensure stores are in-stock on the items customers want.