The value of stock turn for retailers
What is stock turn and why is it so important?
Stock turn indicates how quickly a retailer’s stock is sold and then reordered. A simplistic calculation is: Stock turn = Number of items sold ÷ Average stock level. For example. A retailer sells 10,000 items in a year, and on average holds 2,500 items at one time. 10,000 ÷ 2,500 = 4. Therefore the stock turn rate is 4. This means the retailer is carrying 3 months supply.
What is the value of knowing this? Well, there are three main reasons why successful retailers try and achieve the highest possible stock turn rate without having stock outages and disappointed customers.
Intelligent Retail helps retailers meet best practice guidelines
Retail productivity has been slipping in comparison with the US, there are ways that retail technology can help turn this around
The BERR’s "Productivity in the Retail Sector" Report describes how best practice in retail is about increasing productivity. Productivity is the measure of making more profit from the same resources. The bottom line is that improvements in productivity will improve your profitability. And there appears to be room for improvement as recent figures from the Institute for Fiscal Studies showing that retail productivity in the UK has reduced significantly against the US since the 1990’s.