16 Oct - How Spatial Intelligence Beats Out-of-Stocks and Keeps Customers Happy
And for the customer, this translates to a frustrating retail experience. The disappointment of finding an empty shelf where a desired product should be can lead to lost sales for that specific item and a damaged perception of your brand.
In this blog, we’ll cover the costly problem of out-of-stocks in retail and reveal how spatial intelligence goes beyond traditional inventory management to ensure products are always available for your customers.
The High Cost of Empty Shelves
Empty shelves aren’t just an eyesore - they represent real losses for your store. Every out-of-stock item is a missed sale, which directly impacts your bottom line.
Beyond the immediate loss of revenue, frequent stockouts create a ripple effect, escalating operational costs, damaging customer loyalty, and ultimately hindering your store's growth.
Let's explore the true cost of those empty spaces:
- Lost Revenue: The most direct and readily calculable impact of an out-of-stock is the lost revenue from missed sales opportunities. Retailers in the US and Canada faced a combined loss of $349 billion in 2022 due to out-of-stock situations. When a customer can't find the product they need, they will leave empty-handed, taking their business to a competitor.
- Damaged Customer Loyalty: Beyond the immediate financial hit, out-of-stocks erode customer loyalty. According to a survey, 39% of consumers reported leaving a store without making a purchase due to unavailable products. A frustrated customer faced with an empty shelf is likely to feel inconvenienced, disappointed, and ultimately less inclined to return to your store in the future.
- Operational Inefficiencies: 72% of stock-outs are caused by faulty in-store ordering and replenishing practices, such as retailers ordering too little or too late, generating inaccurate demand forecasts, or mismanaging inventory. These issues create a chain reaction of inefficiencies, including emergency orders, rushed shipping, and extra labor for frantic restocking. These reactive measures add significant costs and divert time away from more strategic initiatives that could enhance your business and improve the customer experience.
How Spatial Intelligence Provides Real-Time Shelf Visibility
AI-driven demand forecasting has the potential to slash inventory holding costs by an impressive 30%. Spatial intelligence could be a key component in achieving savings like this. Unlike traditional inventory systems that rely on periodic manual checks and reactive restocking, spatial intelligence offers a dynamic and proactive approach to managing on-shelf availability.
By understanding first, the space, the items, and then the shopper behavior in that space vs. over simply tracking product movement, spatial intelligence provides a constant, comprehensive view of your inventory, ensuring products are always available for customers. Here's how it works within a space:
- Capture: Camera-led technology tracks all activities, interactions, and physical boundaries within a space through augmented spatial vision
- Model: Create a real-time digitized three-dimensional view of a space
- Layer: Customize your digital twin by layering on value-driven criteria, protocols, and automations that solve your unique challenges
- Act (on): Gain actionable insights and real-time alerts on customer behavior to optimize what is important to your business
The Customer-Centric Supply Chain
The link between on-shelf availability and customer satisfaction is clear. When customers can consistently find what they need, they are more likely to return, recommend your store to others, and stay loyal to your brand. Spatial intelligence helps you build a customer-centric supply chain by ensuring your shelves are always stocked.
On top of consistently stocked shelves, customers expect a seamless shopping experience across all channels. AiFi’s spatial intelligence integrates with your online platforms to provide accurate, real-time inventory across all platforms. This allows customers to confidently buy online and pick up in-store (BOPIS), reserve items, or check product availability before visiting the store.
Final Thoughts
Trust is at the heart of every successful retail relationship. When customers know they can rely on you to have the products they need, they’re more likely to return, recommend your store, and remain loyal to your brand.
Spatial intelligence not only ensures product availability but also enhances operational efficiency, customer satisfaction, and long-term loyalty. By integrating this technology, retailers can stay ahead, offering the consistent, reliable retail experiences that keep customers coming back.
Don’t let out-of-stocks damage your reputation - invest in technology that keeps your customers coming back.Stop losing sales to out-of-stocks.
Request a demo of AiFi's spatial intelligence platform today.