We visited GS1 to learn about the results of the Missing Merchandise in Gondola Study, which is carried out once a year in Argentina.
Claudia Geniz, Retail Manager of GS1 Argentina, explains the process and points out the most significant data that need to be taken into account regarding the future of retail.
GS1 is a global, neutral non-profit organization dedicated mainly to the development and implementation of standards in different sectors. It implements good practices to increase efficiency in the supply chain. These standards are shared globally; each office defines in which projects and sectors to apply them.
GS1 Argentina has been working since 2001 on a Missing Merchandise in Gondola Study (in Spanish, FMG) that seeks to give a prominent role to shoppers. We seek to understand how we can improve product availability and maximize sales through two indicators. Firstly, we determine the level of availability of products in gondolas and, secondly, we understand the reasons why the product is not available. We believe that by understanding the cause, the chains and industries of the sector will be able to work collaboratively to improve availability in gondolas.
In 2019, we carried out this study during May and June. The percentage of missing products was 4.96%, just below 5 percent, an acceptable regional and global indicator. Whenever we refer to availability and an average objective of availability in the gondola, the number we hear is 95%. Ever since 2014, this indicator has been decreasing. In 2014, missing products represented almost 20%, but through different actions carried out by chains and suppliers, this indicator has been decreasing year after year.
In 2019, the category with the greatest percentage of missing products was food, with 5.8%, out of which 5 points corresponded to dry food and 10 points, perishable food. Whenever we relate this to the surveys of shoppers, we see that 50% notices that the category which has the greatest number of missing products is food, so there is a coincidence. The main cause is that suppliers do not deliver the goods (which happens in about 30% of cases). The second cause is lack of shelf restocking.
Today, the retail industry is mainly focused on having an assortment of goods available in the store. Although we notice some changes in the restocking processes aimed at having products in the shelves as soon as possible, there are still some processes that need adjusting, especially regarding inventory control, which can lead to stock shortage.
Consumers look for products anywhere. Therefore, having the products available in the gondola whenever shoppers want them is essential to close the sale. The four main factors that consumers take into account when buying a product are availability both in the brick-and-mortar store and online, a good value for money, product freshness and brand reliability. If one of these factors is dismissed, customers will probably not buy the product.
As part of the missing merchandise study, we conduct a survey of buyers. One of the questions we ask is what they do if they do not find the product they are looking for. Thirty five percent of respondents do not buy anything and 32% buy a different brand.
Based on the information from the MFG, GS1 developed a set of solutions a few years ago which we called “Perfect Store”. We work on product availability on a continuous basis with different suppliers, understand if the price is well implemented at the point of sale and if the freshness of the product coincides with the freshness that brands have decided to offer to their buyers. Our aim is to improve consumers’ shopping experience and company processes.
Retail technology is growing exponentially, as in other areas, and it is the direction the market is taking. Technology helps optimize many processes and provides visibility of what is happening with the products in real time to be able to correct deviations and generate better shopping experiences. These surveys will definitely have to be coupled with technology to increase reach and improve the results they provide to companies.
GS1 works in different areas, such as mass consumption, health and agribusiness. In our Development Center, we show different technologies and how standards are implemented in logistics and actual processes. We invite you and any company which is interested in participating in our open work groups to visit GS1 in the City of Buenos Aires.
For more information about GS1 Argentina, please visit www.gs1.org.ar
Pusher-POP Smart promotes the development of technologies applied to the point of sale to improve the shopping experience of consumers and optimize the processes of companies. To learn more, visit www.pusherpopsmart.com