Inventory Distortion and Out-of-Stocks

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Any retailer will tell you that keeping adequate in-store merchandise is a requirement for customer satisfaction.

A recent study from IHL Group found that overstocks, out-of-stocks and needless returns cost retailers $1.75 trillion globally in lost revenue in 2015. Out-of-stocks alone are responsible for 4.1 percent of lost revenue for the average retailer, a significant chunk when considering the numerous other opportunities for lost revenue, including theft, supplier issues, and inefficient processes. As our previous blog post indicated, having insight into accurate inventory is critical for achieving success in today’s omni-channel retail environment.

With the holidays quickly approaching, retailers are concerned with inventory accuracy to prevent out-of-stocks, which directly impact sales and shopper experience. Leaner in-store inventories, high-demand order deliveries, and the need to connect digital and stores are driving changes in retail inventory strategies. Retailers have the power to combat out-of-stocks by implementing operational changes and technologies like EAS and RFID that specifically address inventory distortion.

According to RSR Research, only 35 percent of retailers are confident enough to expose their store “book inventory” to customers. And, preventing out-of-stocks is even more relevant as the holiday shopping season approaches. As increased shopper traffic  results in faster sell through and critical replenishment needs, retailers will need to focus their efforts on maintaining appropriate inventory levels so customers are not left disappointed. In the event that an item is out-of-stock, having insight into real-time inventory data can help retailers secure the sale by locating the product at another store to be either picked up by the customer or shipped to their home. In this way, RFID-enabled inventory visibility provides the accurate information sales associates need to keep customers satisfied and coming back time and time again.

Posted on November 21st, 2016

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