"Retailers are in it to sell merchandise and be profitable. They don't want to self-fulfill lower sales because they didn't have enough people on hand or the right products on the shelf," says Kevin Sterneckert, retail research director at AMR Research, which advises companies on technology.
Nevertheless, we're in an economic downturn, and stores are coping with it in a variety of ways that will have an impact on holiday shoppers, including offering less merchandise. They were especially cautious with overseas inventory orders earlier this year and will continue to be wary about over-ordering as the holidays approach, analysts say.
The credit crunch also could reduce inventories even for retailers who pay their bills on time, says retail analyst Amy Noblin of Pali Capital, who says she's hearing reports of "delivery disruptions."
Some manufacturers and distributors may be so hard hit by the "credit freeze" that they don't have the money to ship merchandise, she says.
That could mean empty shelves if consumer spending picks up and certain items prove to be bigger sellers than they were in past years. But many retailers are using new technology to try to avoid such scenarios.
Software now used by many retailers is making inventory control so precise that most major retailers should have enough, say, size 8's in cities where a lot of women wear that size. And they know what sold well and where last year so stores should be able to predict buying patterns this year, Sterneckert says.
Source: CRM Daily