By Daniel Hunter
Despite the rise in year on year sales for July and August, a new report reveals that UK retailers are missing almost one billion pounds worth of sales every month due to poor stock management.
While the weak economy has previously been blamed for the administration of major high street players, the report finds that retailers are failing to help themselves in a climate of tough trading.
The Missing £Billion Basket Report 2013 from digital commerce solutions provider Venda, which commissioned YouGov to poll the views of a representative sample of 2,043 UK adults, revealed that 38 per cent of consumers left stores empty handed within the last month.
The report finds that this is due to items either not being in stock, or unavailable in the right size, colour or style — resulting in a loss of approximately £43 worth of sales every month for each adult in the UK. In fact, excluding grocery items, two per cent of consumers have left stores without their intended purchases up to five times in the last month.
With almost two million Brits (four per cent) stating they would stop shopping with retailers permanently if they repeatedly fail to provide the items they are looking for in-store, the report reveals that retailers also risk losing customers for good. This figure rises to one fifth of 18-24 year olds. In difficult trading conditions, maintaining customer loyalty becomes increasingly important for retailers in order to stay ahead of competitors, however, this loyalty is put at risk if retailers fail to provide desired stock in store.
One in ten digitally connected consumers also said they would complain to friends and family, or to brands directly, via social networks if they were repeatedly unable to find and purchase the products they want. In an age where peer recommendation and reviews are increasingly influencing consumer purchasing decisions, by failing to cater to customer demands, retailers may find themselves marred by a negative digital footprint.
Failing to respond to stock demands and ensuring there is adequate stock in-store means that high street retailers are also inadvertently encouraging customers to shop online. The report finds that over a third (38 per cent) of shoppers would automatically look for the products they wanted on a retailer’s website if they are not available in bricks and mortar stores — highlighting the importance of having a strong digital presence regardless of whether the retailer is traditionally found on the high street. If not, retailers risk losing their customers to competitors after almost half of UK consumers (48 per cent) said they would turn to competitor websites when they can’t find goods when out shopping.
Although retailers are missing millions in immediate sales due to not having the desired product in-store, opportunities still exist for them to capture otherwise lost purchases. The report reveals that shop assisted sales are the most effective way for retailers to prevent losses, after 42 per cent of consumers confirmed they would still purchase the product from the retailer if a shop assistant was available to check the product availability in stores nearby. Additionally, 44 per cent of women would still make a purchase with the retailer if they had items unavailable in-store ordered on their behalf and delivered to an address of choice.
Ensuring the right technology is available in-store has also been identified by consumers as an effective way to keep their sale. In fact, ‘click and collect’ services such as in-store kiosks, which allow customers to order products to the store to collect at a later date is desired by 27 per cent of shoppers. Over a third of consumers (34 per cent) would also use in-store kiosks to purchase items immediately and have them delivered at a date and time of their choice. A further six per cent of consumers stated they would be more loyal to retailers that sent them reminders over their PC or mobile device within 24 hours of leaving the store to remind them of the goods they were considering buying.
“In a climate of tough trading, retailers need to go back to basics and re-evaluate core aspects of their businesses operations. Although promotional activities and flash sales have helped retailers boost bottom lines in recent months, focussing on these strategies should be in line with optimising stock management and order fulfilment," Eric Abensur, Group CEO, Venda stated.
"Stock management systems that only marginally work are costing retailers millions of pounds worth of sales, which if captured, could be considered as the saving grace of the high-street.
“High street retailers need to embrace technology if they want to stop losing sales and help facilitate the purchase while the customer is in the physical store. The future of retail lies in “connected” stores, where shoppers will have access to free Wi-Fi, kiosks, sales assisted devices and smartphone scanning. All of these services put the power of the sale in the hands of the consumer, who can still buy the products they want from the retailer of their choice, even when items are not immediately available."
Join us on