The stock-out paradox persists despite data overload
Despite living in the ‘golden age of data,’ with retailers having access to unprecedented levels of information on shopping behaviour and trends, their planning and prediction efforts are still failing to meet consumer demand, a new survey suggests. And the problem seems to be most acute in fashion and footwear.
The results of an online poll suggest 83% of UK consumers found the product they wanted to buy unavailable in-store during the past 12 months, while 70% have found the same online.
The survey by supply chain expert GT Nexus, conducted in association with global polling company YouGov, also found retailers can pay a heavy price for stock-outs, with 57% of disappointed in-store shoppers taking their business elsewhere or not buying at all. The impact is even more acute for online retailers as 65% of disappointed online shoppers bought from another site, store, or abandoned their intention to buy entirely.
The availability of fashion and footwear caused most frustration. When asked about their most frustrating experience of out of stock items, one-third of disappointed UK shoppers said the product they wanted to purchase but was unavailable was a clothing and footwear item.
The online survey indicates a massive gap between consumer expectations and retailers’ ability to fulfil them.
The results also suggest a looming challenges facing retailers trying to build brand loyalty with millennials (consumers aged 18-34 years), with 84% of this age group saying they couldn’t always get what they were looking for in-store in the last 12 months.
“Retailers have invested fortunes in technology to predict customer demand,” notes Boris Felgendreher from GT Nexus, “yet, many still struggle to co-ordinate the flow of products based on their predictions and taking account of all the unexpected disruptions that can occur that are difficult if not impossible to plan for.”
He adds: “Stocking the right goods, at the right time, at the right place, in the right quantities is an enormous coordination effort – but that is what today’s shoppers have come to rightly expect.
“However, success hinges on the success of a retailer’s supporting supply chain infrastructure. Modern supply chains are very complex and often involve hundreds of trading partners.
“While retailers continue to invest in the front-end of their business – the customer facing web sites and in-store promotions, they are lagging in their ability to execute the movement of goods; the ability to sense and respond to demand through greater inventory visibility and intelligence.
“To remain competitive, savvy business leaders are starting to embrace cloud technology so that they can not only collaborate with their trading partners in real-time, but also respond to sudden bursts in demand.”
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