Stockouts Are a Big Deal in Retail

Stockouts aren’t just a retail issue—they’re a brand issue, costing vendors sales, market share, and consumer trust. But here’s the good news: we have the tools to fix it. By combining AI forecasting, real-time ordering, and retailer collaboration, CPG brands can eradicate stockouts and future-proof their supply chains.

The Financial and Brand Consequences of Stockouts

Stockouts don’t just mean short-term lost sales—they carry long-term consequences that CPG vendors can’t afford to ignore.

Financial Impact: Lost Revenue & Market Share

• Stockouts cost retailers up to 46% in lost sales, directly impacting vendor revenue.

• 70% of customers will switch brands when faced with an out-of-stock situation.

• When a retailer experiences repeated stockouts of a product, they often deprioritize that brand, replacing it with a competitor that delivers consistently.

• Failure to address stockouts results in cascading supply chain inefficiencies, where demand volatility creates excess inventory in some areas and shortages in others, leading to higher operational costs.

Brand Consequences: Eroded Trust & Customer Loyalty

• Frustrated customers won’t just substitute another product for one purchase—they may permanently switch to a competitor that offers consistent availability.

• Retailer relationships suffer when brands fail to meet demand, potentially reducing shelf space and promotional opportunities.

• CPG vendors that repeatedly miss replenishment targets risk being seen as unreliable, making it harder to secure distribution deals and retail partnerships.

A Roadmap to Eliminating Stockouts

Step 1: Embrace AI-Driven Demand Forecasting

The key to stopping stockouts before they happen is predicting demand with precision. Traditional forecasting relies only on historical sales data, but AI-driven models go deeper, analyzing: ✅ Seasonality & weather patterns – Predicting spikes in demand. ✅ Traffic trends – Anticipating store footfall fluctuations. ✅ Ethnographic consumer insights – Understanding shifting demographic buying behaviors. ✅ Retailer-specific purchasing patterns – Aligning predictions with actual merchant ordering habits.

💡 Action for CPG Vendors: Leverage AI-based forecasting tools to refine replenishment strategies and ensure production aligns with real-time retail demand.

Step 2: Implement Agentic, Real-Time Ordering

Manual ordering slows retailers down. Many merchants still rely on fragmented, reactive ordering processes, leading to inconsistencies. The solution? Agentic ordering—a system that removes the guesswork and inefficiencies from stock replenishment.

📌 Example: Purchs' text bot, Purcy, allows merchants to instantly place orders simply by sending a UPC code photo via text from any smartphone. No need to navigate multiple systems, deal with supplier delays, or manage cumbersome spreadsheets.

💡 Action for CPG Vendors: Support agentic, real-time ordering solutions that help retailers reduce manual errors, streamline inventory management, and increase order accuracy.

Step 3: Strengthen Retailer Partnerships

Stockouts aren’t just a supply chain issue—they’re a communication issue. When retailers and vendors work together, they can proactively manage inventory rather than react after shelves are empty.

✅ Create shared inventory dashboards for better visibility. ✅ Improve automated replenishment programs to ensure consistent stock levels. ✅ Offer proactive insights to retailers on demand trends and restocking timing.

💡 Action for CPG Vendors: Build a stronger, more transparent relationship with retail partners to ensure inventory flow is optimized across all channels with platforms like Purchs.

Step 4: Optimize Supply Chain Efficiency

Vendor delays, distribution bottlenecks, and lack of agility can turn a minor stock issue into a major supply chain failure. Future-ready CPG brands prioritize agility, implementing: ✅ Dynamic distribution models – Faster replenishment response times. ✅ Regional fulfillment centers – Improved accessibility for high-demand markets. ✅ Backup supplier strategies – Reducing dependency on single-source vendors.

💡 Action for CPG Vendors: Strengthen supply chain flexibility to ensure uninterrupted product availability—regardless of external disruptions.

The Payoff: Stronger Sales, Happier Customers, and Greater Brand Trust

By eliminating stockouts, CPG brands win on multiple fronts: ✨ Retailers become long-term partners, thanks to improved availability. ✨ Customers stay loyal, knowing their favorite products are consistently available. ✨ Sales and profitability increase, as market share remains protected.

Stockouts can be eradicated—but it takes proactive solutions, innovative technology, and strategic collaboration. The brands that act NOW will lead the market tomorrow.