Tackling Retail Out of Stock Problem and Demand Planning with SAP BPC Embedded
It is no secret Retailers are losing a substantial chunk of revenue due to shops going out of stock. It is especially relevant to seasonal campaigns when demand is high and shops don’t always know exactly which products to order and when to order them, or existing demand planning applications are not powerful or flexible enough. At the same time, according to Repsly 30% of consumers feel that stockout hurt their shopping experience and affect more than just sales - brand equity, but also retailer relationships, and investor confidence.
Other analysts point out that Out of Stock costs Retail industry billions (Askuity). Studies consistently reveal an average Out of Stock rate of 8%. But apart from lost sales, the added costs of dealing with Out of Stock are numerous: extra ordering and auditing eats up time and resources; forecasting accuracy plummets; brand loyalty is eroded; promotions lose impact.