"With Placer, we were able to explore and validate our hypothesis that markets with high out of stocks saw an abnormally large increase in cross-shopping with pet specialty. The data is even more compelling when you realize that brick-and-mortar pet specialty traffic is trending down across the board... except for those markets with high out of stocks. Consumers are leaking because they can’t rely on the retailer to have it stocked."

~ Holly A. Shelton, Sr. Category Manager & Insights Lead, OMG-Retail Lab

The Challenge

OMG Discovers Pet Category Sales Trending Down at Per Venue level, Seeks Insights for General Retailer

OMG is a full-service sales and marketing agency representing retail manufacturers. Its category management division, Retail Lab, provides dedicated category management support and best-in-industry insights, leveraging data to support the objectives of its retailer and supplier partners for over 30 years.

Holly A. Shelton, Sr. Category Manager & Insights Lead at OMG-Retail Lab (OMG), started to see that sales in the pet category at a large, well-known general retailer were trending down at a per venue level. In addition, she saw that product out of stock rates were well above goal for the year. Were product out-of-stocks impacting consumer behavior and driving up leakage from the general retailer to competitors, and in particular, pet specialty stores? Holly turned to Placer for an answer.

‍The Solution

Pet Specialty Cross-Visitation & Favorite Place Ranking Increase in High Out-of-Stock Markets

For the analysis, Holly took a sample of stores across four markets in which the general retailer could compare its store locations in the “high out-of-stock” and “low out-of-stock” buckets. She then analyzed how the percentage of visitor share between the general retailer’s store locations and local pet specialty stores changed over the same time period to identify trends. Notably, a pattern emerged: high out-of-stock stores consistently saw higher cross-visitation with pet specialty stores than low out-of-stock stores. The pattern held true across all four markets. In one market, stores with high out-of-stock rates shared 35% of its consumers with pet specialty stores. By comparison, low out-of-stock rate stores in the same market lost just 13% of consumers to pet specialty.

Moreover, with brick-and-mortar traffic to pet specialty generally trending down for the year, customer leakage from the general retailer notably increased traffic for pet specialty in markets where the general retailer had high out-of-stock stores. Diving deeper into the consumer behavior dynamics at one store with the Favorite Places report revealed notable consumer behavior differences at a store with high out-of-stock rates compared to a store with low out-of-stock rates.

Learn more about Favorite Places

Consumers at the high out-of-stock store exhibited a preference for pet specialty, ranking a local Petco as #1 in their Top 10 Favorites Places.

By comparison, customers at low out-of-stock stores visited pet specialty stores far less frequently. Indeed, no pet specialty store appears in the top 10 favorite places for customers at the low out-of-stock store location.

‍The Outcome

SUCCESS: OMG Validates Hypothesis, Shows Chronic Inventory Shortages Drive up to 22% Higher Leakage

Using Placer cross-visitation data, OMG verified the impact of stock availability on cross-shopping in four markets (16 stores). High out-of-stock rate stores suffered greater customer leakage, with one market seeing a staggering +22% increase in shared visitation with pet specialty. Holly shared the findings with the general retailer, helping them prepare for their next transition period.