Lost sales is the revenue that a retailer fails to generate due to various factors. These factors can include stockouts, where a customer is unable to purchase a desired item because it is temporarily or permanently out of stock.
Lost sales can also result from poor inventory management, ineffective merchandising, or inadequate customer service. Additionally, external factors such as competition, pricing, or unfavorable market conditions can contribute to lost sales.
Retailers often measure lost sales as a monetary value representing potential sales that were not realized. Accurate identification and analysis of lost sales help retailers understand the impact of these factors on their business and make informed decisions to mitigate losses, improve customer satisfaction, and optimize their operations.