News Feature | June 17, 2015

How Retail VARs Can Help Retailers Avoid Losses From Overstocks And Returns

Christine Kern

By Christine Kern, contributing writer

How Retail VARs Can Help Retailers Avoid Losses From Overstocks And Returns

Overstocks, out-of-stocks, and returns cost global retailers as much as $1.75 trillion a year, according to a report by IHL Group and commissioned by OrderDynamics. The report, Retailers and the Ghost Economy: $1.75 Trillion Reasons to be Afraid, details the impact of these three of the components on the $14.5 trillion retail economy:

  • Preventable returns: $642.6 billion each year
  • Out-of-stocks: $634.1 billion each year
  • Overstocks: $471.9 billion each year

“Retailers all too often focus on a variety of ways to drive revenue and increase comparable year-over-year sales, but retailers can realize huge gains by addressing opportunities that are in hand and slipping through enterprise fingers,” Greg Buzek, president of IHL Group, stated in a press release. He says business intelligence can provide understanding of the causes of “inventory and data disconnects,” and technology solutions and operational changes can remedy these problems.

This provides great opportunities for VARs who can help retailers with solutions.

According to ZDNET, using technology such as RFID tracking for inventory management could help retailers curtail lost revenues. For example, in a move to improve inventory management, Target has announced that it will roll out FRID price tags by 2016 in one of the largest implementations of RFID in the retail industry.

Keri Jones, Target's EVP of global supply chain operations, announced the rollout in a blog post. Target will launch “smart labels” on price tags in an effort to improve inventory accuracy and tracking and enhance the ability to keep stores stocked with popular items. The new technology is also anticipated to help better fulfill online orders for store pickup, which account for 15 percent of purchases.

“Retail CEOs are more challenged than ever to answer the growing omni-channel demands of consumers while providing profitable growth for owners and shareholders,” said Kevin Sterneckert, CMO of OrderDynamics, in the press release. “With internal process failures, disjointed data and siloed organizations, the answers C-level retailers need are almost impossible to attain without access to new, innovative technologies purpose-built to deliver the full potential of an organization.”