Automatic Stock Replenishment in Retail Its Impact to Sales and Losses

Riga Food 2011 September 7-10

Topic in Detail

Ill be talking about how using Automatic Replenishment

Can help you sell more Can help you get a bigger profit

Why we talk about that at all

Because, unfortunately, customers buy what they want to buy, not what we want them to buy.

How the customers feel about the issue?

They havent brought what I need to buy today again. The Best before date on the item is not OK. I hate having to go to some other shop to buy what I havent got here. I dont like the view of the empty shelves.

They dont love me!

What the customers do about the issue?

Ill make this shop my Number Two/Three option (The lucky one)

Ill STOP visiting this shop altogether (And youll never find out that)

What the retailers do about the issue?

They replenish inventory in retail outlet:

Externally (Manufacturers, Vendors, Wholesalers) Internally /Todays topic/

Internal Replenishment

Mostly manually:
Not accurate (though often believed so) Too subjective Too time consuming

Wider picture

You lose sales because of Out-Of-Stock situations You lose money because you overstock You lose money in the unnecessary price markdowns and clearance sales And you lose customers!

What is a possible solution to that?

Automatic Replenishment

It is not a panacea But many of our customers who adopted it found that it was exactly what they really needed Weve got the right knowledge how to implement it Weve got the right tool

Customer testimonials
New Vision are experts in the complex Retail IT systems. They can evaluate the problems impact on the business processes, assign the correct task priority or just simply do consulting via the phone. Thats the big advantage in comparison with the general helpdesk or call center companies. Andrius emekeviius RIMI Baltic" IT director

The right tool

LS Retail is the leading provider of end-to-end solutions for the Retail and Hospitality industry. LS Retail is the most flexible solution on the market that can be very fast adapted to the changing company needs. According to customer surveys, using LS Retail as the platform for their solutions, we can help retailers achieve 30% more ROI than with alternative platforms.

End-to-End Retail Solution based on Microsoft Dynamics

LS Retail Coverage

1.900 customers 35.000 stores 77.000 POS 130 Countries 33 Languages

LSR Replenishment How does it work?

Different type of retailer:
Food / Fashion / Electronics / DIY / Restaurants /

Different item types:

Fast / Slow moving New / Seasonal / Regular

Different ordering processes:

Centralized / Decentralized

Different delivery processes:

Vendor Store / CWH Store / Vendor CWH Store

Calculation methods
Average Usage Manual Estimate Stock Levels

Like-for-Like

Sales History Same year Past year Seasonal calendar Usage per day Sales History Adjustments Zero Days

Estimated usage per day

Minimum Maximum

Replenish sold stock

Out of Stock Days

Example:
The period is 10 days
Day Daily Sale

Result:
15+10+5+10+10+10 +10+0+0+0 = 70 On Average: 70 / 10 = 7 pieces per day

1 2 3 4 5 6 7 8 9 10

20 10 5 15 10 10 10 0 0 0

Without Out Of Stock: 70 / 7 = 10 pieces per day

Forward Sales Profile

Example:
Workday = 15.08.07 Back Period= 6W Forward Period = 4W

Weeks from todays date

Unit Sales Last Year

Unit Sales This Year

-6 -5 -4 -3 -2 -1 +1 +2 +3 +4

20 30 30 50 50 30 60 100 50 70

30 35 35 55 36 40

Result:
20+30+30+50+50+30 / 6 = 35 60+100+50+70 / 4 = 70 Calculated Forward Factor: 70 / 35 = 2.0

Summing up What

Before - is a modern ERP going to bring value? Now - WHICH TOOL TO CHOOSE?

With Automatic Replenishment you will sell more, you will lose less and you will get a bigger profit.

Summing up What in Detail

You will reduce the number of stockouts! You will increase the number of items that meet the companys in-stock goals! You will reduce amount of time spent on replenishment! You will sell more!

And you will create a better shopping experience for you customers!

Summing up Why and How

There arent many IT companies in Europe with 190+ employees, 90% of whom are dedicated for Retail.

We deeply specialise and our customers love it!

The right knowledge: Facts about the company In Retail IT since 1993 In Navision and LS Retail since 1999:
MICROSOFT Gold Certified Partner (5 competencies) LS Retail Gold Certified Partner 120+ NAV customers Implementations in LT, LV, EE, UK, RU, UA, CZ, PL, RO, SE

Call to Action

Lets talk Free diagnostics and customer-tailored presentations Visit www.new-vision.com Visit www.lsretail.com