Friday 28th Oct 2016 - Logistics Manager

Stock-outs could cost £1.87bn

UK retailers will lose some £1.87 billion of revenue this Christmas owing to missed sales opportunities through out-of-stock products, according to research by the Centre for Economics and Business Research for Netsuite.

The research found that the average retailer is losing ten per cent of its Christmas revenue to though being out-of-stock.

£1.7bn of sales could be lost to competitors, while some £147m may be lost to retailers altogether, as consumers are unable to purchase out-of-stock products, said the report.

“The Christmas period represents the most lucrative revenue opportunity of the year for retailers, comprising one fifth of annual revenues on average, said Colin Edwards, economist at CEBR.

52 per cent of these stock-outs are due to inaccurate demand planning; 42 per cent are because products are not in the right place at the right time either online or in-store; and 34 per cent are because firms lack a holistic view of the business.

Clothes (52 per cent), food and drink (44 per cent) and electrical goods (44 per cent) were the most commonly out-of-stock products last Christmas.

The research also found that the average consumer will conduct 43 per cent of their shopping in-store and 57 per cent online.

Almost 20 per cent of consumers say they will shop through a mobile device this Christmas and almost one in ten of consumers under 35 said that their mobile device is their primary shopping tool.

NetSuite’s Andy Lloyd said: “Delivering an omni-channel 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; they can tarnish a brand, especially over the highly emotionally charged festive season.”