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Retail out of Stock Impact

RDI identified the reasons for low customer satisfaction and leveraged analytics to get leadership on-board. 

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Challenge

A leading big-box retailer noticed customer satisfaction decline. There were several possible causes of for the decline, but they were unsure which cause was having the largest impact.

Evaluation

Qualitative and quantitative research were used to identify the main reason – product out of stock levels.  However, leadership was reluctant to invest in the agreed upon fix.  We suggested a financial impact analysis. 

Results

Our financial impact analysis was able to identify the average price of the out of stock item(s) and the incidence of this experience.  Our calculations suggested that the financial impact of out of stock across 1,500+ stores was about 10% of sales.  Initially, leadership was hesitant to believe the size of the impact.  We suggested their finance team review our analysis, and after review, it was validated.  Leadership agreed to appoint an operations executive, and ultimately, was able to reduce their out of stock levels and increase customer satisfaction.