Data-Driven Insights

Empty Shelves – Amazon’s Best Friend

April 8, 2014   |   Ally Hanlon

Brick & Mortar vs. Online Retailers

The other day on my lunch break I popped into a national cosmetic retailer well known and much loved by many women for its seemingly endless rows of shelves displaying little tubes and vials of potions that promise youth and attractiveness. For many shoppers this beauty oasis elicits full sensory overload ultimately culminating in more than one impulse purchase.

Despite the fact that at first glance the shelves usually appear full of products, I have more than once walked away empty-handed due to that item being out of stock, and this particular trip was no exception. Sure enough, after the beauty consultant made her pitch and recommended a high-end eye primer (by the label Dior no less), imagine her embarrassment and my disappointment when we discovered that the product was actually out of stock. She checked multiple hidden drawers hunting for a stray potted primer – all without luck. And so I was faced with a choice. I could get an alternative product, or I could go online and order it on Amazon for less moeny and with free shipping (thank you, Amazon Prime!).

And that, in a nutshell, is one of the biggest problems that brick and mortar retailers are facing today, a problem Amazon simply does not have to deal with. The observation Jason Notte made recently in his article in The Street is entirely fitting: “You know what you don’t see at Amazon or any other online retailer? Empty shelves.”
In the past the question of product availability has plagued retailers who have attempted to understand what percentage of out of stocks resulted in completely lost sales. But perhaps the more revelant question today is what percentage of lost sales turn into revenue for Amazon? All you have to do is look at the growth numbers to see Amazon’s trajectory will outpace retail giant Wal-Mart in a shockingly short period of time. Whether this growth path is sustainable or not is another matter, but the current numbers don’t lie.

Amazon1

To see the numbers comparison and projections, check out Why Amazon Will Become the Biggest Retailer Ever.

Amazon2

Amazon’s growth, along with that of other e-commerce sites, is definitely the result of a confluence of factors and can’t solely be attributed to empty shelves. However, inventory inefficiency, poor promotional and seasonal planning, and ineffective demand forecasting is clearly playing a part and only helping Amazon’s case. After all, a picture on a website never goes out of stock like a product on a shelf frequently does.

Tags:

adapt analytics bars bell books magnify chart connections marker meds pills search computer paper webcast article blog ebook distribute hand payer heart market Asset 69 Asset 65 Asset 64 Asset 68 Asset 67 Asset 66 Asset 63 decrease expand builder close dart data demand increase index lock locked meter open order pharma pill plot prescription revenue scorecard service shake unlocked Asset 61 Asset 60 Asset 71 icon-distribution-distribution-contract-management icon-distribution-distribution-data-refinery icon-distribution-inventory-analytics icon-distribution-retail-analytics icon-patient-patient-data-refinery icon-patient-patient-services-analytics icon-patient-specialty-pharmacy-analytics icon-payer-340b-analytics icon-payer-analytics icon-payer-g2n icon-payer-government-pricing icon-payer-rebate-management Asset 1 hand hand hand hand hand hand hand hand hand hand hand