UK Retailers' Christmas Gamble Fails as Stock-Outs Could Cost 1.87bn pounds Sterling in Lost Opportunities This Christmas

 UK Retailers' Christmas Gamble Fails as Stock-Outs Could Cost 1.87bn pounds
                Sterling in Lost Opportunities This Christmas

  PR Newswire

  LONDON, Dec. 12, 2012

- New Research from CEBR Supported by NetSuite Reveals That Poor Demand
Planning and Aging IT Systems are Driving Out-of-Stock Situations for
Retailers in Vital Christmas Period

Key findings:

-- Retailers stand to lose 1.7 billion pounds Sterlingto competitors this
Christmas due to lack of product availability

-- 147 million pounds Sterling may be lost to retailers altogether, as
consumers are unable to purchase out-of-stock products

-- Half of the top causes of stock-outs are entirely within the retailers'
control: inaccurate demand planning, wrong retail channels mix and a lack of
holistic view of the business

-- 50 percent of retailers surveyed cite aging IT systems as their biggest
challenge for order fulfillment this Christmas, while only 7 percent automate
their entire order fulfillment process

-- 72 percent of retailers surveyed plan to increase their spending on IT next
year – yet only a third are including ERP or demand planning in these
investments

LONDON, Dec. 12, 2012 /PRNewswire/ -- A research report sponsored by NetSuite
Inc. (NYSE: N), the industry's leading provider of cloud -based financials /
ERP software suites, today revealed that UK retailers could lose an estimated
£147 million of revenue this Christmas due to missed sales opportunities
through out-of-stock products, and an additional £1.7 billion to their
competitors, as consumers shop elsewhere for their Christmas gifts. The
research is based on economic models provided by the Centre for Economics and
Business Research (CEBR) and primary research with UK retail businesses, and a
nationally representative study of 2,000 UK consumers conducted by Vanson
Bourne . The findings are available for free download as part of NetSuite's
latest retail report The Christmas Gamble at www.thechristmasgamble.co.uk .

The research found that the average retailer is losing 10 percent of its
Christmas revenue to out-of-stock situations:

  *More than half of retailers surveyed (66 percent) were out-of-stock of
    particular products last Christmas, with clothing (52 percent), food and
    drink (44 percent) and electrical goods (44 percent) most commonly
    out-of-stock. With 41 percent of consumers surveyed stating that they plan
    to go to a competing website or retailer to get the Christmas gift they
    want, retailers are set to lose as much as £1.7 billion to competitors
    this Christmas.
  *On average, retailers who were affected by stock-outs could not fulfill 21
    percent of Christmas orders due to a lack of product availability –
    leading to a potential overall revenue loss of £147 million through missed
    sales opportunities.

A truly multi-channel Christmas, but online product availability hampers
retailers' revenues

UK consumers are now looking for a true, multi-channel experience and this
Christmas will see the average consumer conducting 43 percent of their
shopping in-store and 57 percent online according to the study. Mobile
shopping will also play a key role in driving sales this festive season;
almost 20 percent of consumers say they will shop through a mobile device this
Christmas, and almost one in 10 of consumers under the age of 35 said that
their mobile device is their primary shopping tool. A quarter of consumers
surveyed also plan to spend more on their Christmas shopping this year, with
68 percent expecting to spend more online compared to in store.

Andy Lloyd, General Manager of Commerce Products for NetSuite said:
"Delivering an omnichannel retail experience is a key challenge for retailers
as consumer shopping habits continue to shift, both in-store and online.
Stock-outs in particular cost more than lost revenue or competitive advantage;
they can tarnish a brand, especially over the highly emotionally charged
festive season. Retailers need to take steps to avoid stock-outs wherever
possible, and investing in improved demand planning is the best way to
mitigate this risk".

The causes of stock-outs

Half of retailers surveyed stated that their biggest order fulfillment
challenge this Christmas is aging IT systems, while almost a third (29
percent) cited human errors when processing orders. Just over half (52
percent) of retailers surveyed also blamed out-of-stock situations on
inaccurate demand planning; while 34 percent said that they lacked a holistic
view of the business.

Looking ahead to 2013, almost three quarters (72 percent) of retailers
surveyed plan to invest in additional IT in the next 12 months, including
online (59 percent), mobile (45 percent) and social commerce (38 percent), as
well as CRM systems (41 percent). However, only around 30 percent of retailers
surveyed are looking to invest in ERP or demand planning software.

Andy Lloyd continued: "Our research shows that many of the reasons behind
out-of-stock products comes down to factors which are within retailers'
control, with inaccurate demand planning affecting more than half of retailers
alone. While investments in eCommerce and social capabilities are vital to
ensuring that retailers can keep up with an increasing volume of online,
mobile and social commerce, retailers are taking huge risks by not investing
in their ERP and demand planning systems, which are currently far lower down
on their list of priorities despite being a key component of delivering on
customer expectations.

To remain competitive, retailers must invest in their software systems and
processes to ensure that they can deliver on customer expectations, have full
business information transparency, greater customer insight and better demand
planning capabilities. Being able to tightly align sales forecasts with
inventory replenishment plans can eliminate stock-outs, improve customer
satisfaction, whilst ultimately ensuring a retailer can remain competitive
during such an important shopping period".

Colin Edwards, economist at CEBR, added: "The Christmas period represents the
most lucrative revenue opportunity of the year for retailers, comprising one
fifth of annual revenues on average. By investing in the right solutions, CIOs
and IT managers can enable their businesses to successfully compete with other
retailers and capitalise on the potential revenues offered by Christmas".

NetSuite's SuiteCommerce platform is a new commerce-aware platform that
provides a central system to manage all transactions and associated
interactions with consumers and other businesses over multiple touchpoints
(website, tablet, smart phone, social media site, in-store, etc.).
SuiteCommerce delivers Commerce as a Service, which is a presentation
independent, globally accessible capability supporting transactional channels,
and providing sophisticated demand-planning and supply chain management
capabilities. For more information, please click here .

About the research

The research is based on economic models provided by the Centre for Economics
and Business Research (CEBR) and primary research with 100 IT decision makers
at UK retail businesses, as well a nationally representative study of 2,000 UK
consumers conducted by Vanson Bourne . The findings are available for free
download as part of NetSuite's latest retail report The Christmas Gamble at
www.thechristmasgamble.co.uk .

About Vanson Bourne:

Vanson Bourne is a specialist research-led consultancy carrying out user
research within a technology context. Vanson Bourne's clients range from
start-ups to well-known companies that need expert guidance, delivering robust
and credible research-based analysis.

About NetSuite

Today, more than 12,000 companies and subsidiaries depend on NetSuite to run
complex, mission-critical business processes globally in the cloud. Since its
inception in 1998, NetSuite has established itself as the leading provider of
enterprise-class cloud ERP suites for divisions of large enterprises and
mid-sized organizations seeking to upgrade their antiquated client/server ERP
systems. NetSuite excels at streamlining business operations, as demonstrated
by a recent Gartner study naming NetSuite as the fastest growing top 10
financial management systems vendor in the world. NetSuite has continued its
success in delivering the best cloud ERP/financial suites to businesses around
the world, enabling them to lower IT costs significantly while increasing
productivity, as the global adoption of the cloud is accelerating.

Follow NetSuite's Cloud blog , NetSuite's Facebook page and @NetSuiteEMEA
Twitter handle for real-time updates.

For more information about NetSuite, please visit www.netsuite.co.uk .

NOTE: NetSuite and the NetSuite logo are service marks of NetSuite Inc.

Cautionary Note Regarding Forward-Looking Statements:

This press release contains forward-looking statements relating to
expectations, plans, and prospects including expectations relating to the
future growth of the retail and mobile commerce markets. These forward-looking
statements are based upon the current expectations and beliefs of NetSuite's
management as of the date of this release, and are subject to certain risks
and uncertainties that could cause actual results to differ materially from
those described in the forward-looking statements including, without
limitation, the risk of continued adverse and unpredictable macro-economic
conditions. All forward-looking statements in this press release are based on
information available to the Company as of the date hereof, and NetSuite
disclaims any obligation to update these forward-looking statements.

(Logo: http://photos.prnewswire.com/prnh/20090924/SF81218LOGO-b )

Website: http://www.netsuite.com
Contact: Mei Li, NetSuite Inc., +1-650-627-1063, meili@netsuite.com
 
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