Fixing Inventory Distortion

Inventory is both the lifeblood and the ultimate measure of retail performance. Understanding the drivers of inventory distortion is essential to managing the most important metric in retail. 

• Are your sourcing cycles too slow to capture the next big trend—resulting in stock-outs and lost sales? 
• Is your range and assortment insufficiently localized to true demand—creating availability gaps in some stores and overstocks in others? 
• Is your buying process too rigid to adjust to market volatility and customer shifts—leading to excess inventory one season and shortages the next? 

These challenges fuel the industry’s $1.7 trillion inventory distortion problem. This new IHL study reveals what’s really driving overstocks and out-of-stocks, and which strategies are proving effective in restoring accuracy, availability, and profitability. 

Download the Inventory Distortion Report Now

Key Learnings: 

• Empty shelves represent the largest loss driver at $690.9 billion globally, indicating fundamental replenishment system failures across retail operations 

• Supply chain disruptions cost $301 billion annually, with geographic chokepoints like the Suez Canal creating cascading inventory planning failures 

• Technology adoption creates performance gaps between AI-enabled retailers achieving 2.5x profit growth versus competitors still using legacy systems 

• Buying & Planning misalignment is a top driver of inventory distortion. Leading retailers use continuous planning to connect strategic goals with in-season decisions—reducing distortion while protecting margin and performance. 

• Integrated platforms outperform point solutions, with successful retailers achieving 95%+ inventory accuracy through comprehensive technology integration rather than scattered tools 

_

IHL Group is a global research and advisory firm specializing in technologies for the retail and hospitality industries. Through their research and data services, they provide the technology insight that companies need to effectively compete in a global market.