What is Stockout in Retail? Explained

Stockout is the situation where a retailer temporarily lacks inventory for a specific product, rendering them unable to meet customer demand. This can arise from factors like high demand, inaccurate forecasting, supply chain disruptions, or ordering errors. Stockouts can detrimentally affect customer satisfaction, result in missed sales opportunities, and damage a retailer's reputation. To mitigate stockouts, retailers implement effective inventory management practices, employ demand forecasting techniques, and maintain transparent communication with suppliers to ensure timely restocking and optimal product availability.