Maximizing On-Shelf Availability (OSA)

Strategies and Future Trends

Shoppers still love to come to the store to quickly grab the products they need or to stroll along fully stocked shelves. However, the pandemic had a major impact on brick-and-mortar stores, including grocery stores. After two years of the pandemic, the damage can still be seen in on-shelf availability (OSA), foot traffic, and shopping patterns. This article focuses on the issues of on-shelf availability and how to improve it.

What is On-Shelf Availability (OSA)?

On-Shelf Availability (OSA), translated to Spanish as “disponibilidad de producto en el anaquel,” is a vital indicator for mass consumer companies. It measures whether a product is available on the shelf at the moment of purchase. This powerful tool analyzes each SKU, indicating if companies meet their ultimate goal: satisfying customers with the right product, at the right time, in the right quantities.

What Should Companies Measure: OSA, Out-of-Stock, or In-Stock?

OSA (On-Shelf Availability) OSA focuses on the presence of products on shelves at the time of customer purchase. It is crucial for understanding how well a company performs at each point of sale. Out-of-Stock Situations Out-of-stock situations occur when products are not available for purchase, leading to lost sales and dissatisfied customers. In-Stock Levels In-stock levels refer to the quantity of products available in storage. High in-stock levels do not necessarily mean good OSA if products are not properly shelved.

Why is a Store Audit Important for Your POS?

Reasons for Poor On-Shelf Availability

–

Stockouts or Breaks

Stockouts occur when products are entirely

depleted from shelves, often due to poor inventory management or unexpected high demand.

– Inaccurate Inventory

Ghost inventories, where products are listed in stock but are spoiled, damaged, or stolen, lead to discrepancies in actual shelf availability.

– Warehouse Retention

Products remaining in the warehouse instead of being moved to shelves can cause poor OSA. This often results from inefficiencies in replenishment processes.

– Poor Execution and Replenishment

Even with accurate forecasts and timely orders, poor execution can prevent products from reaching shelves, impacting OSA.

Impact of Out-of-Stock Situations

– Customer Dissatisfaction

Stockouts are frustrating for shoppers. Encountering empty shelves when looking for specific products damages the shopping experience and can permanently affect customer loyalty.

– Sales Loss

Out-of-stock situations lead to immediate sales losses. Customers may opt for substitute products, but many will leave without making a purchase, directly impacting revenue.

– Brand Loyalty

Some shoppers are loyal to specific brands and products. If they cannot find their preferred items, they may switch stores, leading to a loss in brand loyalty. Technologies Available to Measure OSA

Technologies Available to Measure OSA

– Image Recognition Systems

Image recognition technology provides real-time data on shelf stock levels and product placement. These systems analyze images of shelves to identify gaps and discrepancies.

– Data Analytics and AI

Advanced data analytics and AI can predict demand more accurately, manage inventory levels efficiently, and provide insights into purchasing patterns.

– RFID and Barcode Systems

RFID and barcode systems offer precise tracking of inventory levels, ensuring that products are always available on shelves.

Improving On-Shelf Availability

1. Accurate Demand Forecasting

Use historical sales data and predictive analytics to forecast product demand accurately. This helps in maintaining optimal stock levels and avoiding stockouts.

2. Efficient Inventory Management

Implement advanced POS systems and regular audits to ensure accurate inventory tracking. Use technology to automate and streamline inventory management processes.

3. Improved Supply Chain Management

Collaborate closely with suppliers to ensure timely deliveries and adopt just-in-time inventory systems to minimize stockouts and reduce excess inventory.

4. Employee Training and Engagement

Train employees on the importance of OSA and best practices for stock management. Engage them in actively maintaining shelves and identifying issues promptly.

5. Real-Time Monitoring

Utilize real-time monitoring tools to keep track of stock levels and product placement. Immediate alerts can help address issues before they impact OSA significantly.

Case Studies

Successful OSA Management

Explore examples of retailers who have successfully managed on-shelf availability, leading to increased customer satisfaction and sales.

Lessons from Retail Failures

Analyze cases where poor OSA management led to customer dissatisfaction and lost sales, highlighting the importance of effective OSA strategies.

Future Trends in On-Shelf Availability

AI and Machine Learning

AI and machine learning are revolutionizing inventory management by providing more accurate demand forecasting and real-time stock monitoring.

Big Data and Predictive Analytics

The use of big data and predictive analytics allows retailers to make informed decisions about stock levels, reducing the risk of stockouts.

Advances in Supply Chain Technology

Emerging technologies in supply chain management, such as blockchain and IoT, are improving transparency and efficiency, enhancing OSA.

Sustainability and Ethical Considerations

Retailers are increasingly focusing on sustainable and ethical practices, which include ensuring OSA without overstocking and reducing waste.

Expert Insights

Interviews with Retail Industry Experts

Gain insights from industry experts on best practices and innovative strategies for maintaining high on-shelf availability.

Best Practices and Recommendations

Learn about proven methods and recommendations from experts to optimize OSA in your retail operations.

The Future of On-Shelf Availability in Retail

Recap the importance of on-shelf availability, the impact of stockouts, and strategies for improvement.

Discuss the future trends and technologies that will shape OSA management in the retail industry.

Encourage retailers to adopt advanced technologies and best practices to improve OSA, enhance customer satisfaction, and boost sales.