When managing a convenience store, you’ll have to deal with one of the cardinal sins of the grab-and-go industry: out of stocks. Running out of a certain product, especially one in high demand, can be disastrous to your reputation as well as your wallet.
Out of stocks happen for many reasons: an unexpected increase in traffic due to events in the surrounding area, poor ordering on the store’s behalf, or not properly rotating stock so items expire. Regardless of who is at fault, there is a way to better yourself and your team for the sake of your business, so you don’t run out of stock on product again.
You might be asking yourself; “Why is it such a huge deal if a product runs out of stock for a day or two?”
Simply put, you can’t sell a product you don’t have! It’s one thing to simply not carry a certain item. However, when you run out of a product that you normally have, you’re losing revenue as well as trust and reliability.
For instance, if you have a customer who comes in every Thursday for the same bottle of Coke, you become part of their routine. Not having their product once may not be a big deal. However, once this happens a few times, they may start looking elsewhere and you’ll miss out on a guaranteed, regular sale.
Wondering why it happens? It turns out you may only need to look in the mirror. A study done by the Grocery Manufacturers of America found that anywhere from
“70-75% of out-of-stocks are a direct result of retail store practices.”
That same study also found that 45% of people who experience dealing with an out-of-stock product situation will substitute buying another item, but a whopping 40% of people will either purchase the item at another store, or not purchase the item at all.
Worse still, that 40% is just a reflection of a single product; it does not include all the other purchases that your business would lose with it. For instance, if your store runs out of donuts early in the morning, your customers who come in later and usually purchase a donut and a coffee might go to another store where they still have donuts, and they would also take their coffee purchase with them.
So not only would your business be losing out on a donut sale, but you would also be losing out on a coffee sale, and you’re giving another business a chance to win your loyal customer over.
If nearly 75% of out of stocks is due to your business practices, then it’s time to implement some better practices. You’re likely not managing your inventory as effectively as possible. Thankfully, technology can help. Consider streamlining your processes with an inventory management app.
The first step of using an inventory app is to input your products into the system. This can be accomplished manually, with a handheld scanner, or with CStorePro, on our mobile app. It is important to be thorough, especially during the initial setup of the program, so that your inventory reflects an accurate account of all products that are present in the store.
Once your inventory is entered, you’re ready to start tracking. You may track sales within a specific timeframe, such as daily, weekly, or monthly. As you develop an understanding of how well your products sell, you will be able to anticipate your orders and better manage your inventory.
What’s more, In CStorePro, you can set minimum thresholds, meaning when your inventory reaches a certain level, the item is marked as “out of stock” and it’s time to place a new order. This gives C-store owners unprecedented insight into their inventory. By tracking product usage, and being alerted when stocks are low, you can minimize, or even eliminate out of stocks from happening in the first place!
Remember, at least 70%-75% of out of stocks are due to poor practices on the part of the business. With an inventory management app, you’ll have an instant, accurate look at what you have on hand and how fast it’s selling.
Out of stocks put trust and dollars at risk. Managing them effectively will make your business more efficient, and embolden your loyal customers with the knowledge that you’ll always have their favorite products on hand.