Situation:In the present time, everything is available in just a matter of seconds and therefore when a customer encounters an out-of-stock situation, he doesn’t tolerate it. Depending upon the necessity of the product the customer either substitutes it with something else available, or worse goes to another store to buy it.
Problems and implications:
1. Sales: During busy days i.e. holidays and vacations, there is a high rate of sales compared to normal days. When in one of these days there is an out-of-stock situation, the sales are greatly affected.
2. Customer Experience: If there is an availability of a substitute product of similar quantity, the customer leaves satisfied. If not, they might leave the shop with a bad impression on the store.
3. Loyalty: The unavailability of products at the time of need, forces the customer to either move to another store or buy a similar product. If similar situations persist, the customer eventually stops visiting the shop.
1. Mitigate out-of-stocks: The first solution would be to curb the out-of-stock situations through careful pre-analysis of sales data for prediction, automatic inventory purchase, and proper measurement of OOS situation. AI and deep learning based solutions would prove beneficial in this situation.
2. Improve customer service: Collect information on every purchase by a customer. This data could then be analyzed by AI which would then recommend some suggestions for any problems the customer faces.
3. Sell substitutes: It is important to have substitutes for products. That way, if one of them gets sold out, customers can buy the other one.