The damaging impact of poor inventory management
A recent consumer survey has revealed a concerning trend that retailers across multiple sectors need to address – product availability issues are causing significant losses in sales and customer loyalty.
The survey, which covered a wide range of retail sectors including grocery, food and beverage, home improvement, electronics, and clothing, has shed light on the critical importance of ensuring products are easily findable and in stock for customers.
One of the most striking findings from the survey is the high percentage of customers who encountered difficulties in locating their desired products during their shopping visits. According to the survey, 18% of respondents reported having trouble finding the items they wanted to purchase. This problem was particularly acute in certain sectors like home improvement (24.9%), electronics (21.8%), and clothing (18.3%).
The consequences of these product findability issues are severe, as the survey data clearly demonstrates. When faced with the inability to locate a desired item, 10.34% of customers chose to abandon the purchase completely, while 39.9% of shoppers left the store to seek alternatives elsewhere. This means that a combined 50.2% of potential sales were lost entirely due to product unavailability or poor findability.
Furthermore, an additional 38.3% of customers resorted to ordering the item online when they couldn’t find it in the physical store. While this may not represent an immediate loss of sale, it does indicate a significant risk of customers shifting their loyalty and future purchases to online retailers, posing a long-term threat to brick-and-mortar stores.
Alarmingly, the sectors that stood to lose the most from product availability issues were grocery and food and beverage , in the case of quick service restaurants. In these industries, 75.4% and 73.8% of customers, respectively, stated that they would either abandon the purchase or seek alternatives elsewhere if they couldn’t find the desired product. These figures are particularly concerning given the highly competitive nature of these sectors and the importance of retaining customer loyalty.
Another critical factor contributing to the problem is the lack of in-store tools or systems for customers to check stock availability. 70.9% of survey respondents reported being unable to verify product stock levels during their visit. This issue was most prevalent in the grocery and food and beverage sectors, with 81.7% and 78.8% of customers, respectively, unable to access stock information.
In contrast, the electronics sector emerged as a leader in providing stock availability information, with 48.4% of respondents indicating they could check stock levels. This suggests that retailers in this sector have recognised the importance of empowering customers with real-time inventory data and are taking steps to address the problem.
The survey findings clearly show that product availability and findability are the make-or-break factors in a retailer’s success. Modern retail customers are increasingly unwilling to tolerate frustrating shopping experiences and are willing to take their business elsewhere – either to competitors or online – if their needs are not met.
To address these issues, retailers must improve their inventory management systems, implement effective in-store navigation and product location tools, and ensure seamless integration between their physical and online channels. By doing so, they can improve the overall shopping experience, reduce lost sales, and build long-term customer loyalty.
Ultimately, this is a wake-up call for retailers across all sectors: failure to address product availability and findability challenges could result in a significant loss of their customer base and a loss of competitive edge.
Download the complete report for more insights into the factors influencing modern retail consumer behaviour.
