Retail TouchPoints has summarized a recent IHL Study (Inventory Distortion Will Cost Retailers $1.77 Trillion in 2023) and highlighted the challenges businesses need to address even as many of the worst pandemic-era supply chain issues have faded away.
“Inventory distortion, whether it’s out-of-stocks or overstocks, are a huge and costly challenge for retailers and suppliers, and too often a source of great inconvenience to consumers. A recent study by IHL Group projects that the global cost of inventory distortion in 2023 will be $1.77 trillion — bigger than the combined retail GDP of all of Latin America.”
The complete IHL report can be found at Inventory Distortion: The Good, the Bad and the Ugly.
The Retail TouchPoints summary noted that inventory distortion “is equivalent to 7.2% of retail sales, has multiple causes, including inaccurate demand planning, lack of inventory visibility and inadequate staff training.
Optimizing demand plans certainly offers a path for retailers to improve product availability and therefore the customer experience, while also limiting inventory-related costs like markdowns due to overordering. When considering external variables that can better inform plans and demand forecasts, incorporating the impact of changing weather conditions has proven to provide significant financial benefits, quickly. Planaytics’ predictive weather-driven demand analytics can increase total topline sales up to 2%, reduce perishable waste up to 35%, and enhance profit by up to 6%.
In fact, the article highlights the weather is a key factor to consider noting that IHL says “AI algorithms can analyze vast amounts of data from multiple sources, such as sales data, customer trends, social media and external factors like weather and events. By identifying patterns and correlations, AI can generate more accurate demand forecasts.”
Learn more by reading how Planalytics’ ready-to-use, highly tuned, feature-engineered weather-driven analytics can be integrated into AI/ML forecasts or leading packaged retail SaaS solutions to automatically generate demand adjustments, drive improved plan accuracy, and provide quick (in as little as 90 days) and substantial ROI, year-after-year.