New Study Shows 67% of U.S. Retailers Struggle with Inventory Issues Affecting Brand Trust

Retailers' Trust in Trouble

A recent study conducted by IHL Group in collaboration with Brain Corp has exposed a significant challenge faced by U.S. retailers: over 67% report regular relationship difficulties with consumer brands due to inventory inaccuracies. This issue isn't just about misplaced goods; it is fundamentally undermining trust between retailers and the brands that supply them.

Inventory inaccuracy has become a pervasive problem within the retail sector, leading to logistical headaches that ultimately translate into lost sales and frustrated customers. According to the report, the statistics are stark: only about a quarter of retailers achieve the industry-standard metric of 80% or more accuracy in critical areas such as on-shelf product availability and compliance with planograms. Increasingly, retailers are recognizing that their relationship with brands is strained by these operational hurdles.

The Direct Costs of Inaccuracy

The survey highlights that nearly 50% of retailers experience lost sales directly stemming from inventory complications, with an alarming 47% pinpointing customer dissatisfaction as a byproduct of these operational missteps. Greg Buzek, the President of IHL Group, sums up the crisis: "Retail doesn't just have an operations problem when it comes to inventory; it has a trust problem."

In an industry where perception is everything, the inability to routinely stock products as promised erodes a retailer's credibility not only with their customers but also with the brands they represent. Larger retailers, specifically those raking in over $5 billion in revenue annually, are reporting a staggering 87% higher likelihood of encountering strained relations with brands as a result of these inventory inaccuracies.

Automation as the Answer

Faced with this chaotic inventory landscape, many retailers are actively seeking solutions to restore trust. This research indicates a converging mindset around automation as the optimal way forward. Surprisingly, robotics topped the list as the most favored solution among retailers for improving inventory precision. The report reveals that 72% of surveyed retailers are keen to incorporate in-store robots, with 60% projecting deployment by the end of 2027. Notably, a paradigm shift seems to be occurring: 67% of these retailers prefer not to own or manage such robotic solutions. This looks to usher in a new era of flexible and scalable operations out on the shop floor.

This inclination towards managed solutions positions retailers to steadily gather accurate shelf intelligence without the burden of adding operational lift or high initial capital expenditures. Managed services, which own and operate robots to deliver consistent shelf data, are increasingly viewed as the future of adaptive retail practices.

David Pinn, CEO of Brain Corp, emphasizes the critical link between inventory accuracy and overall operational efficiency. "Accurate inventory data has significant implications for profitability, customer experience, and ultimately brand trust," he asserts. Retail partners have echoed these sentiments, seeking efficient, managed solutions that eliminate the burdens associated with direct robot ownership. This has led to innovations like ShelfOptix™, a robot-powered shelf intelligence service, enabling retailers to focus on core operations while relying on technology to maintain inventory standards.

Conclusion

This ongoing investigation highlights a troubling trend in the retail sector but also sheds light on a possible path forward. While the current state of inventory management remains disconcerting, the readiness of retailers to embrace robotics and automated solutions could signal a significant turnaround. Accessible tools that combine cutting-edge technology with ease of use and operation could once again build the trust that has become so elusive between retailers and brands, ultimately benefiting consumers as well. The full findings of this study can be explored further in the Shelf Intelligence Report: Rebuilding Retail Relationships Through Automation which is now available for free download.