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

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

  PR Newswire

  LONDON, Dec. 12, 2012

- New Research from CEBR Sponsored by NetSuite Reveals That Limited Supply and
Poor Demand Planning is Driving Out-of-Stock Situations for Retailers in Vital
Christmas Period

Key findings:

- Retailers stand to lose around 1.87 billion pounds Sterlingin revenues by
not being able to satisfy consumer demand

- 1.7 billion pounds Sterlingcould be lost to competitors this Christmas due
to lack of product availability

- A total of 147 million pounds Sterlingmay be lost to retailers altogether,
as consumers are unable to purchase out-of-stock products

- More than half of retailers surveyed(66 percent) experienced stock-outs of
particular products last Christmas, with these retailers not being able to
fulfill an average of 21 percent of their Christmas orders due to a lack of
product availability

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

- Multi-channel retail may continue to challenge retailers this Christmas – 20
percent of consumers surveyed say they plan to shop through a mobile device
this Christmas, while 68 percent of consumers plan to spendmore online
compared to in-store

LONDON, Dec. 12, 2012 /PRNewswire/ --A research report sponsored by NetSuite
Inc. (NYSE: N), the industry's leading vendor of cloud -based financials / ERP
software suites, today reveals 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, these retailers could not fulfill 21 percent of Christmas
    orders last Christmas 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 this
Christmas season, with the average consumer conducting 43 percent of their
shopping in-store and 57 percent online. Shopping via mobile devices can play
a key role in driving sales this festive season; almost 20 percent of
consumers say they plan to shop through a mobile device this Christmas, and
almost one in 10 of consumers under 35 said that their mobile device is their
primary shopping tool. A quarter of consumers also plan to spend more on their
Christmas shopping this year, with 68 percent expecting to spendmore 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; 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 ensure
their commerce systems allow them to quickly recover from misallocated
inventory by helping customers to purchase products from alternate store
locations or channels, such as eCommerce, when the store is out of stock."

The causes of stock-outs

When exploring reasons for stock-outs over the Christmas period, 52 percent of
retailers surveyed put this down to inaccurate demand planning; 42 percent
said that they did not have the right products available in the right place
(online or in-store) at the right time; while 34 percent said that they lacked
a holistic view of the business. In preparation for this Christmas:

  *Almost 20 percent of retailers have not ordered additional stock ahead of
    Christmas.
  *10 percent of these retailers claim financial constraints to be the cause
    of lack of stock.
  *Over half of retailers have ordered additional stock across their entire
    product range.
  *30 percent of these retailers have ordered additional stock across items
    that were popular last Christmas.

Andy Lloyd continued: "While it's great to see that a large proportion of
retailers are prepared for Christmas this year, 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."

"The figures from the CEBR demonstrate the cost of taking a gamble this
Christmas when it comes to demand planning. To remain competitive, retailers
must invest in their systems and processes to ensure that they 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. This means at this time of year it is
more important than ever for retailers to manage their stock levels
effectively, allowing them to successfully compete with their peers 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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