On-shelf availability (OSA) stands amongst the six primary store KPIs that are business-critical for CPG manufacturers, making it a keystone metric in ensuring sustained success in the highly volatile retail landscape. OSA directly reflects a brand's ability to meet consumer demand by ensuring that its products are consistently stocked and readily accessible on store shelves.
A high OSA signifies not only a robust supply chain but also a testament to a strong brand reputation. Conversely, low OSA can result in missed sales opportunities, decreased customer loyalty, and even long-term damage to brand credibility.
For manufacturers, a 3% increase in OSA equals a 1% increase in sales
For retailers, a 2% increase in OSA equals a 1% increase in sales
On-shelf availability (OSA) measures the percentage of essential stock-keeping units (SKUs) that are actually stocked on store shelves at any given time. For instance, if a shampoo company expects 10 of its top-selling SKUs to be available in a retail store but only finds 6 on the shelf, the OSA for that product would be 60%.
Typically, CPG companies establish agreements with retailers specifying the expected OSA percentage, with corresponding payouts tied to compliance.
The non-availability of a CPG product on the store shelf directly correlates with reduced consumer acceptance, potentially leading to product failure. This results from a low OSA score that leads to missed sales opportunities, hindering revenue generation and impeding brand growth. By prioritizing OSA, CPG companies can mitigate the risk of market failure and position their products for long-term success in a competitive landscape.
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How many stores have a particular SKU.
For example, SKU 1 is currently present in 7 stores out of 10 stores. So, OSA % for SKU 1 is 70%
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Out of expected SKUs, how many SKUs are currently present in a particular store.
For example, in the above store out of 10 SKUs which were supposed to be present, only 6 SKUs were actually present, so OSA of that store in this particular store is 60%.
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