{"id":1673766,"date":"2015-06-24T04:20:57","date_gmt":"2015-06-24T11:20:57","guid":{"rendered":"http:\/\/www.retailpro.com\/News\/blog\/?p=1673766"},"modified":"2018-08-13T10:25:20","modified_gmt":"2018-08-13T17:25:20","slug":"the-cost-of-inventory-error-1-75b","status":"publish","type":"post","link":"https:\/\/www.retailpro.com\/News\/blog\/index.php\/2015\/06\/24\/the-cost-of-inventory-error-1-75b\/","title":{"rendered":"The Cost of Inventory Error: $1.75T"},"content":{"rendered":"<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-1674537\" src=\"https:\/\/www.retailpro.com\/News\/blog\/wp-content\/uploads\/2015\/06\/shutterstock_147239912.jpg\" alt=\"\" width=\"640\" height=\"640\" srcset=\"https:\/\/www.retailpro.com\/News\/blog\/wp-content\/uploads\/2015\/06\/shutterstock_147239912.jpg 640w, https:\/\/www.retailpro.com\/News\/blog\/wp-content\/uploads\/2015\/06\/shutterstock_147239912-150x150.jpg 150w, https:\/\/www.retailpro.com\/News\/blog\/wp-content\/uploads\/2015\/06\/shutterstock_147239912-300x300.jpg 300w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><\/p>\n<p>Returns, overstocks and out-of-stocks cost retailers mightily.<\/p>\n<p>Research released recently from IHL Group found that merchants lost $1.75 trillion annually due to those three situations.<\/p>\n<p>Retailers still questioning the importance of data analysis and of full insight into sales channels \u2014 e-commerce, brick and mortar and mobile \u2014 take note.<\/p>\n<p>The study, entitled, \u201cRetailers and the Ghost Economy: $1.75 Trillion Reasons to Be Afraid,\u201d outlines just how much these common faced problems cost merchants:<\/p>\n<ul>\n<li>Preventable Returns: $642.6 Billion each year<\/li>\n<li>Out-of-stocks: $634.1 Billion each year<\/li>\n<li>Overstocks: $471.9 Billion each year<\/li>\n<\/ul>\n<p>The top three troubles?<\/p>\n<p>Number one, internal process failures (representing $284.9B in losses); number two, personnel issues ($259.1B), and number three, data disconnects or systems that are not integrated ($222.7B).<\/p>\n<p>In total, those trouble spots amount to 11.7% of annual retail revenue on average.<\/p>\n<p>So, a $25 billion retailer that streamlines processes, becomes more efficient and uses analytics to make informed purchasing decisions, can expect an additional $2.9 billion added to the bottom line.<\/p>\n<p>According to Greg Buzek, president of IHL Group:<\/p>\n<p><em>Retailers all too often focus on a variety of ways to drive revenue and increase comparable year-over-year sales, but retailers can realize huge gains by addressing opportunities that are in hand and slipping through enterprise fingers.<\/em><\/p>\n<p>Merchants must dedicate time and effort into selecting the proper inventory management systems to fit their needs.<\/p>\n<p>Planning is essential to ensure all parts of the supply chain are supported and that capital isn\u2019t wasted in procuring unwanted inventory or systems.<\/p>\n<p>Omnichannel insights offer retailers tremendous growth potential, but if inventory is not tracked properly, data analysis is skewed.<\/p>\n<p>For example, POS software can highlight the top 20 sellers for a business, allowing purchasers to buy more of the products that are most profitable.<\/p>\n<p>Conversely, POS software can inform a merchant which products are not moving, so they can be cleared out and room made for more popular merchandise.<\/p>\n<p>It can be a long process, and in retail especially, time is money.<\/p>\n<p>But the investment will pay off \u2014 to the tune of some 11.7%.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; Returns, overstocks and out-of-stocks cost retailers mightily. Research released recently from IHL Group found that merchants lost $1.75 trillion annually due to those three situations. Retailers still questioning the importance of data analysis and of full insight into sales &hellip; <a href=\"https:\/\/www.retailpro.com\/News\/blog\/index.php\/2015\/06\/24\/the-cost-of-inventory-error-1-75b\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":12,"featured_media":1674537,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44,48],"tags":[15,92,80,76],"class_list":["post-1673766","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-specialty-retail-management-and-operations","category-point-of-sale-software-systems","tag-business-intelligence","tag-omnichannel","tag-pos","tag-retail"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.retailpro.com\/News\/blog\/index.php\/wp-json\/wp\/v2\/posts\/1673766","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.retailpro.com\/News\/blog\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.retailpro.com\/News\/blog\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.retailpro.com\/News\/blog\/index.php\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/www.retailpro.com\/News\/blog\/index.php\/wp-json\/wp\/v2\/comments?post=1673766"}],"version-history":[{"count":0,"href":"https:\/\/www.retailpro.com\/News\/blog\/index.php\/wp-json\/wp\/v2\/posts\/1673766\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.retailpro.com\/News\/blog\/index.php\/wp-json\/wp\/v2\/media\/1674537"}],"wp:attachment":[{"href":"https:\/\/www.retailpro.com\/News\/blog\/index.php\/wp-json\/wp\/v2\/media?parent=1673766"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.retailpro.com\/News\/blog\/index.php\/wp-json\/wp\/v2\/categories?post=1673766"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.retailpro.com\/News\/blog\/index.php\/wp-json\/wp\/v2\/tags?post=1673766"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}