Despite the enormous global success that e-commerce has had, individuals still prefer making purchases in-person since it offers a better shopping experience. But frequently, poor on-shelf availability (OSA) and a high rate of out-of-stock (OOS) events impair their purchasing experience. The availability of a product to be bought by a consumer at the time and location of their preference is known as “on-Shelf Availability.” Having a high on-shelf availability is crucial for retailers nowadays. Unfortunately, many retail establishments still have trouble in the OSA market and they need to work on improving on-shelf availability. However, OSA is not just a concern for merchants. Additionally, it is a vital growth lever for manufacturers, creating chances for higher sales. 

The entire point of shopping in a physical place is to experience the product firsthand. They are quite likely to switch to a rival if the item they are seeking for is not available on the shelf. According to a survey, when a product is hard to find, up to 50% of customers will choose a substitute, 40% will probably depart empty-handed, and 10% will go to a competitor to get what they need.

Bad Retail Execution

Store execution methods do not prompt employees to replace shelves in a timely manner when pending out-of-stock problems exist. Frequently, a product will be in the backroom but not on the shelf when a consumer wishes to purchase it. Due to low stock levels, improper product placement, etc., OSA suffers greatly.

Improper Planning and Mismanagement

Over one-fifth of out-of-stock occurrences, according to a study, are the result of inadequate planning and management methods. Because there is not enough shipping inventory, stores frequently run out of SKUs. In addition to leaving vacant areas on the shelves, this compromises planogram conformity.

Inaccurate Forecasting and Ordering Problems

Stores that forecast product demand incorrectly end up with an inadequate supply of the goods that are needed. Another situation that might occur is when retailers release products too early or too late, causing SKUs to run out on the shelf before the inventory is received. When a product is promoted, the issue gets worse since there is an excess of demand.

Challenges In The Present Execution Methods

Retailers have favoured manual store audits as the best way to monitor compliance. However, this approach is costly and not scalable. It is also susceptible to biases and errors of judgement from people.

The accuracy of this approach is practically on par with manual data collection. This method makes use of historical sales data to estimate out-of-stocks. Given that SKU type affects sales trends, this strategy is unreliable. A lot of certain SKUs might sell quite rapidly, others might take a while longer to sell. POS information is typically only accessible at an aggregate level, not at the store level. This implies that brands are unable to acquire detailed insights.

Image Recognition For Improving The On-Shelf Availability

By giving brands digital eyes in the stores, image recognition technologies give specialised on-shelf data. Images of retail shelves are taken by the solutions, which are then processed and analysed to provide information about out-of-stocks and planogram compliance. Using image recognition to audit shelf management digitizes shop checks. Understanding shelf conditions and how they impact the sales of their primary SKUs is crucial.