What is fill rate

In the field of retail, sales forecasting is helping business achieve a clear competitive advantage.

Fill rate can be defined as the percentage of customer demand that was fulfilled with stock in hand.

If this looks like an oversimplified definition, it probably is. The idea behind the fill rate is to make sure the customer is satisfied by getting what they want and when they want. In an ideal scenario all our customers who order online or visit our stores should be immediately (or with some help) to be able to find what they came looking for.

In-Store Fill Rate

Most of the time when customers walk in a store if you are lucky they will ask someone from the staff if they are not able to find what they came to buy. But in most cases customers browse and they walk away unsatisfied. Even when they talk to the staff, this feedback is not rarely captured.

That is why it is important to invest in modern demand forecasting solutions that can help you figure out, how much of this unobserved demand was lost.

So coming back to fill rate, if we have a demand forecast, we can say fill rate to be:

Fill rate = Stock available / Demand forecast for the given period

Why Fill Rate Is Important

Fill rates are tied directly to the customer satisfaction rate. Any customer demand that goes unfulfilled would lead to either customer substituting the item with something else or coming back later, but in most cases (ranging from 21% to 41%), the customer would get the item from your competition.

Faulty Forecasts Lead To Lower Fill Rates

How Much Should Be Ideal Fill Rate

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