Automatic Stock Replenishment in RetailIts Impact to Sales and Losses

Riga Food2011 September 7-10

Topic in Detail

I’ll be talking about how using Automatic Replenishment…

•Can help you sell more

•Can help you get a bigger profit

Why we talk about that at all

Because, unfortunately, customers buy what

they want to buy, not what we want them to

buy.

How the customers feel about the issue?

“They haven’t brought what I need to buy today again.”

“The ‘Best before’ date on the item is not OK.” “I hate having to go to some other shop to buy

what I haven’t got here.” “I don’t like the view of the empty shelves.”

“They don’t love me!”

What the customers do about the issue?

I’ll make this shop my Number Two/Three

option (The lucky one)

I’ll STOP visiting this shop altogether

(And you’ll never find out that)

What the retailers do about the issue?

They replenish inventory in retail outlet:

Externally (Manufacturers, Vendors,

Wholesalers)

Internally /Today’s topic/

Internal Replenishment

Mostly manually:

Not accurate (though often believed so)

Too subjective

Too time consuming

Wider picture

You lose sales because of Out-Of-Stock

situations

You lose money because you overstock

You lose money in the unnecessary price

markdowns and clearance sales

And you lose customers!

What is a possible solution to that?

Automatic Replenishment

It is not a panacea

But many of our customers who adopted it found

that it was exactly what they really needed

We’ve got the right knowledge how to

implement it

We’ve got the right tool

„New Vision are experts in the complex Retail IT systems. They can evaluate the problem’s impact on the business processes, assign the correct task priority or just simply do consulting via the phone. That’s the big advantage in comparison with the general helpdesk or call center companies.

Andrius Šemeškevičius„RIMI Baltic" IT director

Customer testimonials

The right tool

LS Retail is the leading provider of end-to-end solutions for

the Retail and Hospitality industry.

LS Retail is the most flexible solution on the market that

can be very fast adapted to the changing company needs.

According to customer surveys, using LS Retail as the

platform for their solutions, we can help retailers achieve

30% more ROI than with alternative platforms.

End-to-End Retail Solution

based on Microsoft Dynamics

LS Retail Coverage

1.900 customers

35.000 stores

77.000 POS

130 Countries

33 Languages

LSR Replenishment – How does it work?

Different type of retailer: Food / Fashion / Electronics / DIY / Restaurants / …

Different item types: Fast / Slow moving

New / Seasonal / Regular

Different ordering processes: Centralized / Decentralized

Different delivery processes: Vendor → Store / CWH → Store / Vendor → CWH → Store

Calculation methods

Average Usage

ManualEstimate

Stock Levels Like-for-Like

• Estimated usage per day

• Sales History• Same year• Past year• Seasonal calendar

• Usage per day

• Sales History Adjustments• Zero Days

• Minimum• Maximum

• Replenish sold stock

Out of Stock Days

Example: The period is 10 days

Result:15+10+5+10+10+10 +10+0+0+0 = 70

On Average: 70 / 10 = 7 pieces per day

Without Out Of Stock: 70 / 7 = 10 pieces per day

Day Daily Sale

1 202 103 54 155 106 107 108 09 0

10 0

Forward Sales Profile

Example: Workday = 15.08.07 Back Period= 6W Forward Period = 4W

Result: 20+30+30+50+50+30 / 6 = 35 60+100+50+70 / 4 = 70

Calculated Forward Factor: 70 / 35 = 2.0

Weeks from today’s date

Unit Sales Last Year

Unit Sales This Year

-6 20 30-5 30 35-4 30 35-3 50 55-2 50 36-1 30 40+1 60+2 100+3 50+4 70

Summing up – What

Before - is a modern ERP going to bring value?

Now - WHICH TOOL TO CHOOSE?

With Automatic Replenishment you will sell more,

you will lose less and you will get a bigger profit.

Summing up – What in Detail

You will reduce the number of stockouts!

You will increase the number of items that meet the

company’s in-stock goals!

You will reduce amount of time spent on replenishment!

You will sell more!

And you will create a better

shopping experience for you

customers!

Summing up – Why and How

There aren’t many IT companies in Europe with

190+ employees, 90% of whom are dedicated for

Retail.

We deeply specialise and our customers love it!

In Retail IT since 1993 In Navision and LS Retail since 1999:

MICROSOFT – Gold Certified Partner (5 competencies)

LS Retail – Gold Certified Partner

120+ NAV customers

Implementations in LT, LV, EE, UK, RU, UA, CZ, PL, RO, SE

The right knowledge: Facts about the company

Call to Action

Let’s talk

Free diagnostics and customer-tailored

presentations

Visit www.new-vision.com

Visit www.lsretail.com