BOSTON, MA--(Marketwire - June 9, 2009) -
Aberdeen
Group, a Harte-Hanks Company (
NYSE:
HHS), surveyed 120 retail
enterprises between April and May 2009 to reveal shelf-level inventory
optimization strategies. An astounding 70% of retailers rate themselves
average or below average on their current store shelf-level inventory
management processes. The top pressure facing 60% of leading retailers is
the need to address service level imbalances at the retail shelf or
inability to address short-term product category demand.
Along with Best-in-Class, the "service-level" pressure is felt by 52% of
Average and 41% of Laggard retailers. The second-highest inventory-related
business pressure of Best-in-Class retailers is the need to respond to the
market's expectation of reduced shelf-level prices even as customer demand
varies extensively on a week-to-week basis.
As a response to the pressures stated above, retailers are responding by
turning towards computer assisted ordering that takes shelf-level service
levels, short-term demand trends, shelf reviews, and automated
replenishment into consideration.
"Currently too much safety stock is a real problem in retail. Leading
retailers realize that profitability is dependant on shelf-level inventory
focus that includes effective balancing of open-to-buy requirements with
service levels, setting rationalized and well thought out automated
replenishment thresholds, daily shelf reviews and corrective action, and
inventory visibility at a multi-enterprise level," states Sahir Anand,
Chief Author and Retail Research Director.
Aberdeen results signify that Best-in-Class retailers are 2.9-times more
likely than Laggard retailers to improve end-to-end inventory order
management through computer assisted ordering (CAO) functions in a
closed-loop manner where suppliers are intimately involved as well. One of
the critical demand-related complexities that cause inaccurate shelf-level
inventory planning is the inability to sense and respond to inventory
demand trends. More than half (55%) of retailers surveyed are able to
capture a demand trend in five weeks, while 44% of retailers respond to a
demand trend at a painstakingly slow rate of six weeks or more, causing all
sorts of seasonal on-shelf demand accuracy related complexities for stores.
"The lack of inventory accuracy at stores is not only a planning issue,
it's also a performance and bottomline challenge that has a ripple effect
on the entire chain," says Chris Cunnane, Co-Author and Retail Research
Associate. Aberdeen's analysis of the Best-in-Class demonstrates that
leading retailers follow more comprehensive and practical approaches that
enable customer-centric inventory management in retail stores / channels
through a combination of:
-- Perpetual inventory procedures downstream -- timely field-level
inventory stock-out and over-stock updates. This enables retailers to
manage inventory to the shelf requirements and ensure seamless customer
service.
-- Improvement of multi-store location and multi-warehouse inventory
planning to ensure localized inventory for stores.
-- Store and warehouse-level inventory tracking and audit procedure
compliance for inventory accuracy.
All of the above requirements, and many more shelf-level inventory
capabilities and systems, are ingredients of the Best-in-Class mantra for
continued success.
A complimentary copy of this report is made available due in part by the
following underwriters: Red Prairie, Tomax, Tectura, and Quantum Retail.
To obtain a complimentary copy of the report, visit:
http://www.aberdeen.com/link/sponsor.asp?cid=5794.
For additional access to complimentary
Retail
Research, please visit
http://research.aberdeen.com/index.php/-retail-research.
About Aberdeen Group, a Harte-Hanks Company
Aberdeen provides fact-based research and market intelligence that delivers
demonstrable results. Having queried more than 30,000 companies in the
past two years, Aberdeen is positioned to educate users to action: driving
market awareness, creating demand, enabling sales, and delivering
meaningful return-on-investment analysis. As the trusted advisor to the
global technology markets, corporations turn to Aberdeen™ for insights
that drive decisions.
As a Harte-Hanks Company, Aberdeen plays a key role of putting content in
context for the global direct and targeted marketing company. Aberdeen's
analytical and independent view of the "customer optimization" process of
Harte-Hanks (Information - Opportunity - Insight - Engagement -
Interaction) extends the client value and accentuates the strategic role
Harte-Hanks brings to the market. For additional information, visit
Aberdeen or call (617) 723-7890, or to
learn more about
Harte-Hanks,
call (800) 456-9748.
© 2009 Aberdeen Group, Inc., a Harte-Hanks Company
451 D Street, Suite 710
Boston, Massachusetts 02210-1928
Telephone: (617) 854-5200
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www.aberdeen.com
Contact Information: Media Contact:
Sahir Anand
Research Director
Aberdeen Harte-Hanks
Sahir.Anand@aberdeen.com
Chris Cunnane
Research Associate
Aberdeen Harte-Hanks
Chris.Cunnane@aberdeen.com