Symphony IRI Group Highlights the Cost of Out of Stock Levels in its New Report “Improving On-Shelf Availability”
ECR Europe Conference, Brussels, 5 April 2011 – Shopper-centric marketing research, analytics technology and consulting firm, SymphonyIRI Group, today announced its latest report for fast moving consumer goods (FMCG) retailers and manufacturers “Improving On-Shelf Availability”. The report reveals that ‘out of stock’ levels for FMCG products across Europe average at 8.3 percent and cost the industry at least 4 billion Euros every year. Measuring on-shelf availability tends to happen at the point of distribution or store warehouse which does not provide sufficient information on what the consumer is seeing on the shelf, claims SymphonyIRI Group.
A research study by Gruen and Corsten in 2008 observed that studies conducted as far back as 1992 showed out of stocks on average across developed markets as being around 9 percent. “The issue of products not being available on-shelf has changed little in the last twenty years, despite the billons that have been invested in state of the art distribution centres and the ability to track stock by the second and minute until it reaches its final destination,” claims Andrew Mitchell, International Sales Director for Technology Services, SymphonyIRI Group.
“Although the issue hasn’t changed, the impact has,” he continues. “While manufacturers bear the most risk, the stakes are also high for retailers. Both face the risk of substitution, postponed purchases and reduced customer loyalty. Savvy shoppers faced with their favourite brands not being available on the supermarket shelf will not just switch to competitive brands, they may talk about it to other customers, potentially extending the impact on both the brand and retailer from one to thousands of consumers around the world. In today’s economic climate where both manufacturers and retailers want to maximise sales revenue and improve brand loyalty, now is the time to address the real cost of on-shelf availability.”
SymphonyIRI warns that repeated out of stocks at the same store could force consumers to migrate permanently from that store, making the issue one for retailers as well as individual brands. Research by the company in Europe shows that the level of substitution between brands can be as high as 75 percent in cases where the desired brand is not available on the shelf. This figure can vary among categories. For instance, product/brand substitution is lower on home care products (42 percent) than it is on fresh or frozen products (63 percent). This is typically due to the urgency of the purchase and the shelf life of the products. Substitution of private label products is higher than that of branded items – 65 percent compared to 53 percent for branded items.
SymphonyIRI Group, in association with ECR Europe, the membership organisation for European FMCG manufacturers and retailers, has developed an On Shelf Availability Assessment Tool to help retailers and manufacturers address the challenges of optimising on-shelf availability. The tool provides them with an instant analysis of their situation along with best practice guidelines (based on the experiences of other FMCG organisations) to move them closer to improving the situation. The tool is available free to ECR Members from http://ecr-all.org
“Numerous research studies and pilot projects have shown us that management commitment alongside collaboration between retailers and manufacturers and the right tools to support a joint process, reduce out of stocks most effectively,” says Xavier Hua, Managing Director at ECR Europe. “Defining the extent of collaboration can be a significant challenge for out of stock initiatives due to the limited amount of time that retailers have to devote to the issue. However the impact of investment is clear and there is no reason why on-shelf availability should remain a challenge for the industry. Successful management can improve stock performance by as much as 62 percent and just a three percent increase in OSA can equal a one percent increase in sales for manufacturers.”
The full report includes practical guidance on removing the barriers to improving on-shelf availability and can be downloaded from www.symphonyiri.eu or on request to firstname.lastname@example.org.
Notes to editors:
About SymphonyIRI Group
SymphonyIRI Group, formely named Information Resources, Inc (“IRI”) is the global leader in innovative solutions and services for driving revenue and profit growth in CPG, retail and healthcare companies. SymphonyIRI offers two families of solutions: core solutions for market measurement and Symphony Advantage solutions for enabling new growth opportunities in marketing, sales, shopper marketing and category management. SymphonyIRI solutions uniquely combine content, analytics and technology to deliver maximum impact. SymphonyIRI helps companies create, plan and execute forward-looking, shopper-centric strategies across every level of the organization.
For more information, visit: www.SymphonyIRI.eu
About ECR Europe
ECR Europe is a collaborative retailer-manufacturer platform with a mission “to fulfil consumer wishes better, faster and at less cost”. It is a non-profit organisation which aims to help retailers and manufacturers in the FMCG sector to drive supply chain efficiencies and deliver business growth and consumer value. Since November 2010, ECR Europe is the regional platform for collaboration of the Global Consumer Goods Forum. ECR Europe community website: www.ecr-all.org
Contact for SymphonyIRI Group:
Marketing Director at Symphony IRI Group
Tel : +33 1 30 06 23 62
PR Consultant at Eureka Communications
Email : email@example.com
Tel : +44 (0)1420 564346/07990 520390
Contact for ECR Europe :
Managing Director, ECR Europe
Tel : +32 2 738 06 44
e-mail : firstname.lastname@example.org
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