The ECR research on the problem of inventory record inaccuracy aimed to answer three key questions:
1) To what extent are inventory records wrong?
2) How does inventory record accuracy deteriorate over time?
3) How does an improvement in inventory records affect sales?
Based on the data shared by seven retailers, the findings confirm that for the retailers in this study 60% of inventory records are wrong, and that when the inventory records are corrected that sales can increase by 4 - 8%.
As one of the retailer members of ECR shared, their board regularly pour over and inspect new ways to grow retail sales that most often require big investment and high risk, yet here we have new research that shows that by just improving the accuracy of their inventory records they can drive sales, with little risk and potentially, a low level of investment.
The academics recommend that the very first thing retailers shoud consider if they want to act on these findings is to repeat the experiment, do your sales increase by 4% or 8%? How does the sales increase differ by category? By store and format? etc.
A webinar was held on November 19th to launch the research, with the academics presenting the findings and Tesco providing a response. Click here to view a recording of the webinar launch of the report, or here to view the webinar slides.
The report is free to download.