Saturday, August 17, 2013

Fall Over Yourself to Be In-Stock

A few months ago, I conducted a “Retail Profitability Tactics” project for merchants in Mariposa, California, helping to prepare them for their prime shopping season. I’m not referring to November through January. In Mariposa, the prime shopping season is happening right now, from June through September.
     Mariposa is a city of about 2,200 full-time residents in a county of about 18,000. Each year, many more people use Mariposa for lodging, meals, and/or supplies on their way to Yosemite National Park than live in Mariposa. Understandably, the community of merchants has largely designed themselves to serve the needs of outsiders rather than the locals.
     The downside of this is missed selling opportunities. The Executive Director of the Mariposa County Chamber of Commerce spoke of the problem from personal experience. Regarding the merchants, she told me, “I can’t buy pillow cases or silverware in Mariposa. They carry fancy lap throws, but they don’t carry blankets.” A member of the Mariposa County Board of Supervisors added, “55% of the welfare benefits received by our citizens are spent outside the county.”
     Eliminating those missed selling opportunities became a prime objective of my training and consulting in Mariposa.
     However, for most of the communities of merchants I work with, the problem is the obverse: Insufficient ability to attract shoppers from outside the immediate area. Researchers at Babson College, Dartmouth College, and University of Miami found that an often-overlooked component in that ability is the retailer assuring the prospective shopper the items sought are in stock at the store.
     A more common tactic is to offer deep discounts, with the logic that people are willing to travel far for a bargain. It’s a tactic which is less dangerous for a Big Box than for a small to midsize retail business, though. The Babson/Dartmouth/Miami researchers propose that you instead offer an in-stock guarantee, since it can command a price premium.
     In honoring such a guarantee, be aware that customers often say a store is out-of-stock (OOS) when the retailer thinks the store is in-stock. A survey conducted a few years ago by the IHL Group, based in Franklin, Tennessee, identified the top three reasons:
  • The shelf is empty because the items are still in receiving or storage 
  • The merchandise is in the sales area, but not easily seen 
  • The customer wants an item with characteristics, such as a specific pattern or smaller package, you’re not tracking 
Click below for more: 
Give Your Retailing Local Quality 
Monitor the Sales Floor to Avoid Out-of-Stocks 
Control Out-of-Stock Irritation

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