Fulfillment rate 101: How to maximize every grocery order
Attracting customers is hard work. When someone has chosen your store, selected the products they want, and made it to checkout, it might look like all your hard work is about to pay off. But there’s an all-too-common way you can still lose them: if you can’t fulfill their order with the items they requested.
In the grocery industry, competition is fierce and the bar for consumer expectations continues to rise. If you can’t meet those expectations, it’s usually far too easy for customers to find a competitor who can.
At the very minimum, customers expect to receive the items they’ve ordered. So when you capture an order that you can’t fulfill, this creates a problem. For customers, it can cause a negative experience and may deter them from shopping with you in the future. For your business, you risk losing a portion of revenue or losing the order altogether.
To avoid these outcomes, you’ll want to pay close attention to your fulfillment rate.
What is fulfillment rate?
Fulfillment rate is the portion of items that you’re able to fulfill from your existing inventory. This includes out-of-stock items that you’re able to fulfill with substitutions.
Any time you deliver an incomplete order, that counts against your fulfillment rate. But if you have items in stock that are similar enough to those the customer wants—like a different brand of baking soda—in most instances, you can still fulfill the item.
Fulfillment rate formula
To calculate your order fulfillment rate:
- Add the number of original items ordered that you can fulfill with existing inventory and the items that you can fulfill with substitutions (when the original item ordered isn’t available).
- Divide that amount by the total number of original items ordered.
- Multiply that value by 100.
✓ Fulfillment rate = (original items available + item substitutions) / (original number of items ordered) x 100
Why fulfillment rate is important
Businesses today have a lot of data. Recognizing which metrics to concentrate on isn’t always straightforward. Fulfillment rate is worth adding to the list for a few main reasons. Knowing your fulfillment rate can help you:
Increase revenue
To drive growth for your business, it’s important to maximize each order for its full revenue potential. Tracking your fulfillment rate helps you manage your inventory and ensure that the products people like most are available when they want them. More complete orders can translate directly to more sales.
Improve customer experience
When you’re consistently able to deliver customers everything they want, it creates a positive experience with your brand and encourages repeat business over time. Even if an original item is out of stock, you can still salvage what could become a negative experience by recommending a relevant item substitution. This is a win-win for your customers and your bottom line.
Optimize inventory forecasting
Inventory forecasting is the practice of analyzing past data to make more accurate predictions about future sales. By learning about your top out-of-stock items, you can make better plans to avoid future fulfillment issues.
Metrics affecting fulfillment rate
The fulfillment rate calculation shared above applies to the overarching metric that businesses use to track performance, but you might want to keep track of these other key metrics also:
Found rate
Found rate refers to the percentage of original line items you’re able to fulfill in an order. Unlike fulfillment rate, it does not include item substitutions. For example, if a customer orders 12 items, and you’re able to fulfill the order with 10 of the original items ordered and 2 item substitutions, your found rate would be lower than your fulfillment rate.
To calculate your found rate:
- Divide the number of original items found by the number of original items ordered.
- Multiply that value by 100.
✓ Found rate = (number of original items found / number of original items ordered) x 100
Replacement rate
Replacement rate is the proportion of items you’re able to replace with a similar item when the original item from the order is out of stock. Delivering a customer’s first choice is ideal, but if you can frequently provide a satisfactory replacement, that’s worth tracking as well.
To calculate your replacement rate:
- Divide the number of original items replaced with substitutions by the number of original items marked out of stock.
- Multiply that value by 100.
✓ Replacement rate = (number of original items replaced with substitutions / number of original items marked out of stock) x 100
Completion rate
Completion rate refers to the percentage of requested orders you’re able to deliver. While this metric does not directly affect fulfillment rate, it can help uncover underlying fulfillment issues that may be addressed through replacements and tighter inventory management. This is especially important because out-of-stock items are among the leading causes of order cancellation.
To calculate your completion rate:
- Divide the number of completed orders by the number of requested orders.
- Multiply that value by 100.
✓ Completion rate = (number of completed orders / number of requested orders) x 100
Along with fulfillment rate, these 3 metrics can help you gain a better understanding of how effectively you’re delivering on what customers want. They can also help you strategize about inventory management moving forward.
How to improve fulfillment rate
Tracking fulfillment metrics arms you with information that you can act on. If you notice that your fulfillment rate and associated metrics are falling short, these strategies can help you get back on track:
1. Manage your inventory. For grocery retailers in particular, it’s critical to leverage inventory management software and analytics to forecast consumer demand for items with certainty. By monitoring item-level performance and by understanding how those items affect your overall sales, you can make strategic inventory adjustments based on those insights.
2. Make substitutions. When items are out of stock, it’s important to offer customers intuitive replacements. If you can’t offer their first choice, letting them review and approve substitutions can improve their overall shopping experience while protecting your bottom line.
3. Expand your online catalog. To ensure that you’re able to replace out-of-stock items with suitable substitutions, it’s important to evaluate your online catalog regularly and increase selection where necessary. Start by identifying your top-selling items. Then make sure you have a sufficient assortment of SKUs in the category to support substitutions.
4. Train employee shoppers. Shoppers are the link between the order and the customer, so it’s important that shoppers understand how to successfully fulfill orders, especially if they’re relying on technology from a third-party delivery platform. For retailers that employ shoppers, train your team on how to navigate replacement features, share product updates, and provide any educational materials (such as video tutorials or how-to guides) that can flatten the learning curve.
How Uber Eats can help grocers improve fulfillment rate
You don’t have to do everything yourself. Partnering with a third-party delivery platform like Uber Eats can help you improve your fulfillment metrics by providing product features and tools that give you more control over order fulfillment. Here’s how this looks in practice:
Simplifying the experience for shoppers
Using the Uber Eats platform, shoppers can easily search for original and replacement items by typing in the product name or SKU or using bar code scanning to ensure item accuracy. This makes the process of fulfilling orders at the item level more seamless, which can lead to a more efficient and positive experience for shoppers.
Giving customers power over replacements
When customers order an out-of-stock item, shoppers can search for replacements or choose from a list of best-match alternatives. After a replacement suggestion is made, customers have the power to approve, reject, or request specific items before the order is sent out for delivery. All of this can add up to fewer surprises for customers and more revenue opportunities for your business.
Supplying automated reporting and analytics
Uber Eats Manager is a comprehensive dashboard that tracks relevant metrics for you. Through automated reports and emails, you’ll be able to use information about total sales, average order value, top out-of-stock items, and more to make informed decisions about your business operations.
Uber Eats is committed to helping you increase your fulfillment rate and improve the customer experience. Whether you join the Uber Eats marketplace to reach new customers or add Uber’s white-label delivery solution to your own website or app, getting started with grocery delivery is easy.
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