Out of stocks and overstocks cripple retailers’ businesses. Fifty nine percent of consumers report that they leave stores due to empty shelves – and this is only a small part of the problem. What is the financial cost to retailers? How is it impacting customer retention? And what is working and not working to solve these issues?
For more than 15 years, IHL Group has been tracking the worldwide cost of Inventory Distortion (combined costs of out of stocks and overstocks). In this latest report, IHL investigates the troubles retailers face while mired simultaneously by both out-of-stocks and overstocks. Discover the costs and trends experienced during the last 2 years as well as consumers self-reported reasons for leaving stores without purchases. Can retailers handle the truth?
Nearly 2 trillion dollars worldwide or the nominal GDP of Italy
$990 billion dollars lost by controllable issues: systems, processes, training
Inventory disruption reduced by $86 billion in consumer staples categories
About this Ebook
“It would be easy to look at the top-end data regarding Inventory Distortion and conclude that all the energy and work put into improving the issue has been wasted. But nothing could be further from the truth. While the worldwide cost of Inventory Distortion is on pace to grow $230 billion from 2020 to 2022, overall sales are on pace for a growth of $3.6 trillion in the same period.
The systems that are being deployed are working, but the massive disruptions due to gaps in the supply chain, shortages in personnel and raw materials, and government shutdowns have only grown the problem worldwide. Government intervention made the problem even worse; retail demand skyrocketed as free money was handed out at the same time that travel and other services were restricted. Then the same governments locked down supply routes, which caused massive shortages. And unless retailers had alternate domestic or near-shore sources for their goods, they were left in the lurch.”
