$93 Billion Lost Annually Due To Unavailable Product

Written by Evan Schuman
January 10th, 2008

Last year, retailers lost about $93 billion because customers couldn’t get the products they expected, according to a study performed by RIS News and the IHL Group.

The report identified these as out-of-stocks but it used a rather expansive definition of out-of-stocks, including in-stock products that had an incorrect price as well as in-stock but misplaced product that neither the customer nor the associate could easily locate.

But IHL President Greg Buzek said the figures "did not factor in any increase for the holidays" and used September as a standard month. "So the figure in real life is about one and a half times this number," he said.

The report broke down the $93 billion as: can’t find help (22.8 percent); price on product higher than the price from the ad or online (13.5 percent); associate can’t find inventory (11.3 percent); empty shelves (28.7 percent); and customer "left for some other reason" (23.7 percent).

Another problem that Buzek found were global supply chain issues that prevented stores from getting adequate notice when merchandise delivery was going to be delayed. "They had no work in process inventory information until it hits the docks in China," Buzek said. "So they don’t know it’s late until it’s too late."


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