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The Importance of Tracking On-Shelf Availability for Retail Success
The Importance of Tracking On-Shelf Availability for Retail Success
Khuldoon Bukhari
June 17, 2023

Understanding On-Shelf Availability (OSA): A Key to Retail Success

In the realm of retail, On-Shelf Availability (OSA) is a cornerstone for success. As it profoundly impacts revenue, customer satisfaction, and employee productivity, maintaining optimum OSA is crucial. Retailers falling short in managing OSA may face stockouts leading to lost sales, inflated labor costs due to manual inventory management, and dwindling customer loyalty owing to inferior shopping experiences.

The Cost of Ignoring On-Shelf Availability

The significance of OSA tracking becomes clear in the face of some alarming figures. The IHL Group's study reveals that U.S. retailers suffer an annual loss of an estimated $1.75 trillion due to out-of-stock items. A hefty 24% of these lost sales arise from products being absent on the shelves. These statistics stress the importance of tracking OSA to maintain constant product availability for customers.

The Perils of Poor Inventory Management

Ineffective inventory management is another fallout of neglecting OSA. According to a report by Gartner, retailers that disregard on-shelf availability tracking have an average inventory accuracy of just 65%, compared to a whopping 95% accuracy for those that prioritize OSA. This discrepancy can result in either overstocking or understocking of products, both leading to additional costs or lost sales.

Inadequate inventory management is another major repercussion of ignoring OSA. Gartner reports that retailers neglecting on-shelf availability tracking have an average inventory accuracy of a mere 65%. In stark contrast, those that track OSA enjoy a whopping 95% accuracy. Such a vast discrepancy can lead to overstocking or understocking scenarios, both inducing additional costs or lost sales.

Employee Productivity Hindered by Insufficient OSA

Poor OSA also has a detrimental impact on employee productivity. A study by the Retail Council of Canada reveals that employees spend an average of 12.5 hours per week on restocking activities, which takes them away from other productive tasks. This results in increased labor costs and reduced efficiency for the retailer.

Inefficient OSA also hampers employee productivity. According to the Retail Council of Canada, employees spend a staggering 12.5 hours per week on restocking activities. This distraction takes them away from other productive tasks, increasing labor costs and diminishing overall efficiency.

The Advantages of On-Shelf Availability Tracking

There are multiple benefits of tracking OSA for retailers:

  • Boosted sales: Preventing stockouts and ensuring constant product availability can curb lost sales.
  • Enhanced inventory management: Real-time data on product sales provided by OSA tracking enables effective inventory management.
  • Improved supply chain visibility: OSA tracking offers superior visibility into supply chain issues such as delays, overstocking, or poor forecasting.
  • Increased operational efficiency: Minimizing manual shelf checking and restocking boosts operational efficiency and trims labor costs.
  • Competitive advantage: Retailers maintaining high levels of on-shelf availability gain a competitive edge as customers invariably choose stores that stock their desired products.

Empowering Retail Success with Envelope's enRetail

Implementing enRetail, Envelope's top-tier software solution can help retailers optimize their OSA and drive success. Our users report up to a 4% increase in revenue and over a 20% boost in staff performance, highlighting the effectiveness of enRetail in enhancing retail operations and profitability.

In conclusion, neglecting OSA tracking can lead to severe consequences for retailers, including lost sales, decreased customer satisfaction, poor inventory management, and reduced employee productivity. However, with the right tools and approach, like those provided by Envelope's enRetail, retailers can not only mitigate these issues but also optimize their operations, reduce costs, and build stronger customer loyalty. Embrace the power of OSA with enRetail, and steer your retail business towards success.

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