Value Chainmerchandise visibilitySupply Chain ChallengesInaccurate Inventoryvisibility is criticalsolutions overviewsupply chain visibility OAT Solutions A-Z

Merchandise Visibility

The Challenge:
With shoppers cutting back, retailers have only one chance to make the sale.  Often, they fail to do so:

  • Global out-of-stocks are 8.3% (Global GMA Study, 2007)
  • 65% of the time retailers’ perpetual inventory is inaccurate (Harvard Business School study)
  • Retailers on average lose 4% of their annual sales due to out-of-stock items (Corsten and Gruen, 2007)
  • 22% of out-of-stocks are caused by shelf replenishment issues in the store, when the item is in the store but not on the shelf (Corsten and Gruen, 2003)
  • Shoppers leave apparel stores more than 30% of the time without finding at least one item they came in to buy (University of Pennsylvania's Wharton School study)

Retailers must have the merchandise that customers want when they come in to shop. But retailers who hold too much inventory risk overstocks and costly markdowns, which present an even greater problem when credit markets are tight and the cost of capital needed to fund inventory is high.

Effective inventory management is critical to retailers’ profitability.

The Solution:
Merchandise Visibility enables retailers to:

  • Reduce out-of-stocks
  • Maximize on-shelf availability
  • Reduce on-hand inventory
  • Increase sales and margins

With Merchandise Visibility, retailers gain with unprecedented insight into their operations, from point of manufacture through point of sale. They understand in real-time where in the supply chain their inventory is, and what their inventory position is in each store, enabling them to meet customer demand and maximize sales.

The Results:

With real-time visibility into inventory throughout the supply chain and in stores, retailers are seeing tangible results that are impacting their top and bottom lines:

  • 6% to 14% increases in same-store sales
  • 30+% improvements in replenishment of items that were previously out-of-stock
  • 70%+ time savings in taking inventory in stores and in distribution channel, reduced from days to hours
  • 98%+ inventory accuracy
  • 10% to 30% decreases in on-hand inventory
  • Improved insight into conversion rates of items shopped for vs. purchased

Learn more:
Supply Chain Challenges for Retailers
The Impact of Inventory Inaccuracy
Why Merchandise Visibility is Critical Now
Merchandise Visibility Solution Overview

Barcode - Passive RFID - Active RFID - Ultra Wide Band RF (UWB) - Wi-Fi - RTLS - RFID-enhanced EAS - Location Servers - GPS - Application Sensors (e.g. Stack Lights, PLCs, alarms...)

"RFID's use in the apparel sector represents the greatest near-term opportunity for business improvements and fewest impediments to growth in the retail industry," says ABI Research's RFID practice director Michael J. Liard. "A quick, demonstrable ROI and key business metrics for adoption have been clearly established and the results of nearly all evaluations conducted have been compelling. As a result, market activity is brisk and promising, especially among early-adopter specialty apparel retailers."

Read the press release

AAFA On-Demand Webinar
Merchandise Visibility customer wins industry award.