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Retailers predicted to miss out on 640m (GBP) of Christmas sales due to technology glitches

Retailers predicted to miss out on £640m of Christmas sales due to technology glitches

Whilst the countdown to Christmas has been planned for months, the dawning of Black Friday on Friday 29th November now signals the start of the final flurry for seasonal sales. The phenomena started in the US, to capitalise on the opportunity to retail to millions of Americans taking time off from work to enjoy Thanksgiving celebrations. Now the globalisation of the retail market means international brands and retailers are now using Black Friday as a trigger point to launch seasonal offers across the world, and this year UK consumers are also expected to benefit from a host of tempting Christmas deals. However experts caution that instead of cashing in for Christmas, UK retailers could be left with a £640m worth of lost sales caused by retail operations struggling to cope with a dramatic surge in sales.

Retail technology company, Retail Assist has calculated the potential cost to retailers from the value of sales they could miss out on if the retail operation buckles under the pressure of a surge in sales. They predict the biggest risk to retailers is at the till point, with an average of 1.82% of EPOS systems expected to be down every day during December, leading to increased wait times, in store congestion and basket abandonment.

Dan Smith, Retail Assist CEO comments: “The potential financial penalty to retailers from something as simple as a till going down is huge, as they could end up losing sales from consumers who are already committed to purchasing but end up abandoning their basket in frustration. ”

Retail Assist believes that retailers are not just vulnerable from losing sales at the till point, but also through inventory systems not being up to scratch. Dan Smith continues: “Our research indicates that 57% of people will be buying their Christmas gifts through on and offline shopping. It means, however the consumer is shopping, the retailer has to be in a position to meet a consumer demand. Inventory systems need to be integrated to ensure whether the consumer shops online, in-store, through catalogue, tv or mobile, the retailer can fulfil the order and not let the consumer down. We estimate that at least 75% of retailers have failed to get their inventory systems integrated across all retailing channels, and it is highly likely they will lose sales through not being able to supply customers with a product they want to buy.”

Dan Smith concludes: “As UK retailers continue to experience a challenging economic climate our message is that retailers should be counting the cost of lost sales from preventable retail operations problems. As well as investing in front line sales staff, retailers need to ensure their technology is equipped to cope with intense operational activity across multiple retailing channels. If technology and the supply chain fail to deliver then it will not only damage sales but shall deter people from returning which will be a detrimental outcome for any retailer.”


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Notes to Editors:

Retail Assist’s estimate of a potential £640m lost in sales over Christmas is based on the following data / assumptions:

Retail Assist used data from their own clients to identify the frequency that POS can be down. This includes over 5,000 POS points across 35 retail brands. These brands range from tier four single store/ independents through to tier 2 high street retailers (strong bias towards fashion brands). They analysed real time data across several periods to identify the number of POS that were down, resulting in an estimation that in December 1.82% of retailers POS are likely to be down at any one moment.

The good news is that Retail Assist gets 75% of incidents fixed at first line (i.e. store calls the helpdesk and gets it fixed over the phone immediately), but retailers that don’t have this in place could be looking at a significant loss.

Due to client confidentiality we can’t disclose which retailer data we looked at and when.

We have seen a number of reports predicting December 2013 sales in the region of £40bn. These have been based on stats from the Department for Business, Innovation and Skills for UK Retail Sales 2012:
- £310bn in total
- £263bn for high street brands (includes their e / m commerce divisions)
- £29bn for pure internet
- £18bn for mail order
- £34bn retail sales in December 2012

Retail Assist is a leading retail-only IT solutions and services company, providing UK and international retailers with end-to-end business applications and services that reduce costs, optimise retail operations and support higher revenues. The company was the first retail-only IT services provider to be awarded ISO20000 accreditation by the BSI.

Retail Assist clients include Harvey Nichols, Selfridges, WDF, A|Wear, Paperchase, Whistles, Aurora Fashions, Karen Millen, The White Company, Odin Retail, Mint Velvet, Jane Norman, REISS, Crew2000, VUE, Signet, Jacques Vert, Precis, Windsmoor, Planet and White Stuff.

With its Retail Solutions Retail Assist excels in developing, integrating, deploying and supporting customised systems. These include its award-winning Merret supply chain solution. Merret is a real-time, multi-currency, multi-channel merchandising, warehousing and stock control solution that covers all areas of the retail supply process. Through working with third parties, Retail Assist also integrates and delivers EPoS systems.

In Managed IT Services, Retail Assist’s proven offerings include 24/365 Help Desk, Technical Services, Operations, Data Centre, Hardware Maintenance and Disaster Recovery. Professional Services cover Retail Business Consultancy and Project Services.