Supermarket stock-outs in the UK are at an all time high, David Visick, Federation of Wholesale Distributors told The Big Issue that “It is quite possible food shortages will get worse before they get better.” Most of the retailers are blaming this occurrence solely on Brexit or Covid, but are they hiding the real truth of the matter? Visick adds “The media would like to say there’s a shortage of food – there isn’t. It’s just increasingly difficult to get everything to everybody who wants it when they want it.”
The Mirror wrote an article back in July on three reasons behind shortages explained but left out one crucial factor. There is another reasoning behind these UK stock-outs and that’s the software these companies are using to predict what exactly stock is needed.
Retail supply or production planning teams typically use demand planning software to ensure there is enough stock of the final product, so that they can fulfil orders and meet demand.
Typically, the annual sales plan is one of the inputs into the demand planning software/application. According to an article by Gartner (Aug 2019), demand planning is typically used by the Sales & Operations Planning team (S & OP team) and focuses on a tactical horizon from 3-24 months.
Currently sales are simply gauged on what was sold last year, which doesn’t take into account any important consumer factors, which can change vastly from day to day, let alone over a year. A few organisations use forecasting predictions which make longer term forecasts over 12 to14 weeks based on seasonality and what was sold last year.
Have you ever planned your grocery list 3 months in advance? Didn’t think so.
David Visick also backs-up this point by saying “It’s all about forecasting. You have to try to work out how much food needs to be in which part of the country at what time, and all these factors have made that extremely difficult.”
Sales intelligence in FMCG is important now more than ever – this tool will prevent these stock outs regardless of COVID or Brexit.
Sales intelligence is basically an AI predictor that works out consumer actions based on numerous indicators; including but not limited to, information on air pollution levels, weather circumstances, water levels, consumer movements, current affairs, popular trends etc. The company salesBeat is one of the first to point out that this is a huge factor for these stock outs.
Sales intelligence apps are meant to be used by any sales team who sell to customers, at a national account level and at a store level.
Why is sales intelligence becoming increasingly important?
On a broad basis this still holds true. However, these days, the sales forecasts that go into the demand plan are no longer reflective of expected sales. So there are short term fluctuations within medium term forecast numbers. Unless these short term fluctuations are tightly managed, there are frequent stock outs of brands at supermarkets.
With Millennials and Gen Z now forming a significant percentage of the adult population, the influence social media and news have on how these 2 generations buy and consume products, sales intelligence apps and platforms are becoming increasingly important to help sales people understand how much to sell.
By empowering sales teams with information on what consumers want and are likely to buy in the next 4-6 weeks or even days, sales teams can ensure 100% in-store availability of the brands they sell. Providing timely sales intelligence helps sales teams take advantage of opportunistic upsides that are in line with long term strategy, leading to increased revenues of up to 40%.
salesBeat have recently started the Twitter page called ‘Out Of Stock Now’ to encourage people to expose the empty shelves – over the last couple of months users have been highlighting the abundance of food on the shelves. The page is followed by The Grocer’s technology editor George Nott and a writer from HypeBeast called Douglas Brundage
