Andy Lloyd, General Manager of Commerce Products for NetSuite said: "Delivering an omnichannel retail experience is a key challenge for retailers as consumer shopping habits continue to shift, both in-store and online. Stock-outs in particular cost more than lost revenue or competitive advantage; they can tarnish a brand, especially over the highly emotionally charged festive season. Retailers need to take steps to avoid stock-outs wherever possible, and investing in improved demand planning is the best way to mitigate this risk".
The causes of stock-outs
Half of retailers surveyed stated that their biggest order fulfillment challenge this Christmas is aging IT systems, while almost a third (29 percent) cited human errors when processing orders. Just over half (52 percent) of retailers surveyed also blamed out-of-stock situations on inaccurate demand planning; while 34 percent said that they lacked a holistic view of the business.
Looking ahead to 2013, almost three quarters (72 percent) of retailers surveyed plan to invest in additional IT in the next 12 months, including online (59 percent), mobile (45 percent) and social commerce (38 percent), as well as CRM systems (41 percent). However, only around 30 percent of retailers surveyed are looking to invest in ERP or demand planning software.Andy Lloyd continued: "Our research shows that many of the reasons behind out-of-stock products comes down to factors which are within retailers' control, with inaccurate demand planning affecting more than half of retailers alone. While investments in eCommerce and social capabilities are vital to ensuring that retailers can keep up with an increasing volume of online, mobile and social commerce, retailers are taking huge risks by not investing in their ERP and demand planning systems, which are currently far lower down on their list of priorities despite being a key component of delivering on customer expectations. To remain competitive, retailers must invest in their software systems and processes to ensure that they can deliver on customer expectations, have full business information transparency, greater customer insight and better demand planning capabilities. Being able to tightly align sales forecasts with inventory replenishment plans can eliminate stock-outs, improve customer satisfaction, whilst ultimately ensuring a retailer can remain competitive during such an important shopping period".
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts