The Importance of Product Availability in Stores for Principals
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For the convenience of consumers, especially during a pandemic, product availability at store level is very important. To minimize traveling in crowded places, small stores near residential areas are preferable for the Indonesian market. This is why principals, distributors, and stores must ensure product availability at all times.
Failing to provide products in a timely manner can result in a decrease of profits, and damage in store relationships and the overall shopping experience.
There are two possibilities when a product is recorded to have decreased sales in a certain period of time. It could be a declining demand or it might be out of stock. However, if the company waited until this had happened, it would be too late.
Common Causes Out of Stock
- Inaccurate forecasting
- Late in anticipating the demand increase for a product
- Slow order fulfillment process
- Out of stock at the seller (principal or distributor warehouse)
If demand increases (especially for seasonal products), but stock availability is insufficient, the company will lose profits and consumers.
Out of Stock Impact
When consumers can’t find the product they want, they react in various ways.
Impact on Stores
For loyal store shoppers, if they don’t find the product they are looking for, they will be forced to buy a replacement product at the same store. However, if they are not loyal shoppers, they may go to another store to find the product they need. This leads to a decrease in profits for store owners.
Impact on Distributor/Supplier
From a distributor’s perspective, in addition to declining sales, out of stock can damage relationships with stores. Stores will lose trust in distributors/suppliers if they can’t be relied on to provide product supplies. If this relationship is already severe, the store may look for another distributor.
Impact on Principal
If Principal’s products always run out of stock in any store where consumers shop (so they cannot meet consumer needs), the product marketing costs that have been spent will be wasted because the product is difficult to buy and thus also decreasing income.
Advotics Solutions To Ensure Product Availability
Companies can anticipate stock depletion through salesmen/merchandisers who visit the store regularly. Each salesman can report the results of their visit by using a distribution application such as DMS Advotics.
Solutions for Traditional/General Trade Stores: Supervisor/Manager Checks Through Sales Data
One way to ensure product availability is to analyze historical sales data. For example, in one month, a shop can usually sell 500 pcs. Knowing this pattern, the distributor’s supervisor/salesperson can start offering reorders for the store based on the time and number of the store’s last order.
When making regular visits, field salesmen can also see the actual remaining stock in the store and remind the stores to reorder if the stock is running low.
By using distribution software, apart from providing strong forecasts, the software can help identify the best-selling products in each store. So that distributors not only meet product availability, but also encourage them to earn more profits.
Solutions for Modern Trade Stores: Merchandisers Do Stock Checks Before Visiting Stores
Usually, modern stores already have an internal system that monitors their remaining stock based on goods receipt data and actual sales data. If the remaining stock is below the minimum limit, a centralized order will be placed.
When merchandisers are assigned to visit the store, they can check the remaining stock in the warehouse, replenish the stock on the display rack, and also report and ensure the remaining physical stock is the same as that recorded in the system. That way, automatic orders in the system can be made as soon as actual stock runs out.
For more detailed field information, companies can use Market Info and Documentation module: