Retailers Plagued by "Inventory Stagflation", New Study Finds

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RSR Research, an analyst firm providing market intelligence on retail technology trends, announces the results of its latest research report, "Precision Inventory Management in the Age of Localization." The research finds that while retailers generally feel they have a solid handle on their inventory, in reality they are plagued by out-of-stocks on fast-moving items and overstocks in slow-moving inventory. The report provides best practices from high-performing retailers and recommendations for how all retailers can better manage their inventory in tough economic conditions.

Unlike in previous years, this year Winners reported an increase in inventory. But they were also able to simultaneously improve turns and margin as they did so. This shows that while localization is going to put pressure on inventory levels, it's also going to pay off by moving more inventory at better prices.

RSR Research's latest report, "Precision Inventory Management in the Age of Localization" finds some retailers plagued by "inventory stagflation": high inventories and high out of stocks. While retailers generally feel they do a good job managing their inventories, they also report trouble managing both fast-moving and slow-moving items. These findings are based on a survey of 80 retailers conducted May-July of 2009. The report can be downloaded at http://www.retailsystemsresearch.com/_document/summary/970.

"I think the most significant finding from this report comes from Retail Winners - better performing retailers," said Nikki Baird, Managing Partner at RSR Research and co-author of the report. "Unlike in previous years, this year Winners reported an increase in inventory. But they were also able to simultaneously improve turns and margin as they did so. This shows that while localization is going to put pressure on inventory levels, it's also going to pay off by moving more inventory at better prices."

"Winners associate better inventory management with the ability to localize the value offering for consumers and to support emerging cross-channel shopping," adds Brian Kilcourse, also a Managing Partner at RSR Research and co-author of the report. "They understand that to make finding the right solution simpler for consumers, they must manage more complex assortments and perpetual inventory at the enterprise level."

"Precision Inventory Management in the Age of Localization" contains analysis of the business drivers, opportunities, and organizational constraints surrounding inventory management, as well as recommendations for creating successful inventory management capabilities. The report was developed in partnership with the Retail Industry Leaders Association, a leading retail trade organization, and is sponsored by RedPrairie and Manhattan Associates. The report is part of RSR Research's ongoing efforts to provide market intelligence on retail technology trends, and can be downloaded here:

http://www.retailsystemsresearch.com/_document/summary/970.

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