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‘Stocked out’ or ‘Sold out’?
I had an interesting conversation at a leading retail store recently. My favourite brand was stocked out on the shelves. I casually asked their service person ‘Is this brand stocked out? When can I come back to buy it?’
His reaction surprised me. He told me politely ‘No Sir, this brand is not stocked out. It has actually been sold out.’
Frankly, I couldn’t make out the difference, but he insisted that the two were different phenomena. In their terminology, a product is ‘sold out’ if the demand exceeds their plan for the day. It is considered ‘stocked out’ if the supplies fall short of the plan.
I kept thinking about it on my way back. What could be the thought process behind this bifurcation? And then it hit me in a flash.
If a product is ‘sold out’, the improvement area is ‘demand forecasting’ and the supply team makes no efforts to expedite additional requirements. However, if it is stocked out, it is the supply team’s responsibility and the sales loss is attributed to them.
Does the consumer actually care? If a product is not available on the shelf, sales are lost. Shouldn’t we work as a team to improve both demand sensing and supply responsiveness?
Point to ponder…