News

Retailers worldwide lose $1.75 trillion

IHL Group reports retailers worldwide lose $1.75 trillion annually due to the cost of overstocks, out-of-stocks and returns.

May 7, 2015

The IHL Group is reporting, in its new research "Retailers and the Ghost Economy: $1.75 Trillion Reasons to be Afraid," that deficiencies in the retail market cost $1.75 trillion a year. Overstocks, out-of stocks and needless returns are the primary siphons on the $14.5-trillion retail economy worldwide.

The worldwide annual losses in these three categories are:

• Preventable Returns: $642.6 billion.
• Out-of-stocks: $634.1 billion.
• And overstocks: $471.9 billion.

"Retailers all too often focus on a variety of ways to drive revenue and increase comparable year-over-year sales, but retailers can realize huge gains by addressing opportunities that are in hand and slipping through enterprise fingers," Greg Buzek, president of IHL Group, said in a release. "These problems are within retailers' grasp to solve, but it requires more than data, more than business intelligence. It requires understanding the root causes of inventory and data disconnects and implementing the technology solutions and operational changes to address these revenue-limiting issues."