UK retailers are missing almost £1bn worth of sales every month due to poor stock management, according to a new report from digital commerce solutions provider, Venda.
While the weak economy has previously been blamed for the administration of major high street players, the report finds retailers are failing to help themselves in a climate of tough trading.
The Missing £Billion Basket Report 2013 commissioned YouGov to poll the views of a representative sample of 2,043 UK adults. It found 38% of consumers left stores empty handed within the last month. The report finds 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, 2% of consumers have left stores without their intended purchases up to five times in the last month.
With almost 2m Brits (4%) 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 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, said Venda.
One in 10 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, suggest researchers.
Failing to respond to stock demands and ensuring there is adequate stock in-store means high street retailers are also inadvertently encouraging customers to shop online, said Venda. The report finds over a third (38%) 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%) said they would turn to competitor websites when they can’t find goods when out shopping.
Saving the sale
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, said Venda. The report reveals shop assisted sales are the most effective way for retailers to prevent losses, after 42% 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% 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, researchers found.
Ensuring the right technology is available in-store has also been identified by consumers as an effective way to keep their sale, reports Venda. 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% of shoppers. Over a third of consumers (34%) would also use in-store kiosks to purchase items immediately and have them delivered at a date and time of their choice. A further 6% 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.
Eric Abensur, Group CEO, Venda, said: “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, focusing on these strategies should be in line with optimising stock management and order fulfilment. 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”, Abensur said.