New Study Finds 90 Percent of Fashion Retailers’ Forecast Calculations Overlook Lost Sales

News published on 2/5/19

AMSTERDAM – Feb. 5, 2019 – Neogrid, a global technology provider of end-to-end supply chain management solutions, today released the results of a 2018-19 Omni-channel Allocation and Replenishment in Fashion research study during its Fashion Link event in Amsterdam. The study finds that 90 percent of fashion retailers do not include lost sales into their forecast calculations.

The international study, by retail consultancy and training company Martec International, was conducted on behalf of Neogrid. The study is based on interviewed fashion industry merchandising and supply chain professionals from 40 companies cross Europe, accounting for 23 percent of the total fashion market by sales.

It found:

  • 90 percent of retailers do not use historical lost sales in allocation forecasting
  • 49 percent of retailers’ base replenishment on demand
  • 38 percent of retailers are unhappy with their reporting

 “Factoring in lost-revenue KPI’s when planning allocations and replenishment, based on lost sales data from a previous season or similar product, can be a decisive competitive advantage,” said Brian Hume, Founder and Managing Director at Martec International. “But only 10 percent actually incorporate it in their allocation method.”

Jay Moskowitz, president and COO, Neogrid, added, “While it is encouraging to see almost half of respondents are using demand to calculate replenishment, there is still room for improvement throughout the industry. Demand-based replenishment will help retailers and manufacturers optimize inventories across all channels and minimize lost and post-season markdown sales.”

With omni-channel retail exponentially increasing points of sale, demand planners, as well as supply chains across the industry, have been under increased pressure to meet consumer demand. While forecasting remains essential, retailers need effective allocation and replenishment processes that leverage demand sensing in order to prevent out-of-stocks and ensure that the right products are in the right place at the right time.


Informational Webinar
Neogrid and Martech International executives will host a live webinar on February 21, 2019, at 3:30 p.m. CET / 9:30 a.m. EST with full details of the study’s results. To register for the webinar, https://fs29.formsite.com/Tk9nI5/Neogrid-webinar2019/index.html.

About Martec International
Martec International is a specialist retail consulting and training company and the market leader in this type of research. We assist retailers to improve their business performance and help suppliers to retail execute their go to market strategies more successfully. Our clients include retailers, technology and merchandise vendors, ingredient manufacturers, CPG and FMCG companies, banks, telecommunications companies and venture capitalists. For more information, visit www.martec-international.com

About Neogrid
Smarter consumers demand smarter supply chains, and if the consumer didn’t buy a product, no one has truly sold it. Neogrid helps companies plan and replenish according to actual demand-driven data, in order to increase profit along the entire supply chain. Neogrid adapts to your business, connects with any existing system and brings true collaboration in a SaaS platform to manufacturers, suppliers, distributors, wholesalers and retailers to balance inventories – together -- and guarantee on-shelf availability to the end consumer. For more information, visit Neogrid.com.

 

Press Contact:                                                   
Claire Kelly
DPR Group, Inc.
240-686-1000             
claire@dprgroup.com

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