How a Tech & Home Appliances Brand Recovered Lost Sales

Supply chain challenges

The Australian tech and home appliances brand struggled with accurately estimating lost sales due to stockouts, which resulted in suboptimal inventory decisions and customer dissatisfaction.

  • Lost Sales & Substitutions

    The brand’s failure to account for distribution center stock led to inaccurate lost sales estimates, and they missed opportunities to substitute out-of-stock products, impacting revenue and customer satisfaction.

  • Costly Emergency Replenishments

    Inaccurate forecasting and inventory planning forced the brand to rely on expensive emergency stock replenishments, increasing operational costs and inefficiency​

  • Stockouts Reducing Customer Loyalty

    Frequent stockouts due to poor demand forecasting led to customer dissatisfaction and a decline in brand loyalty as customers couldn’t find their desired products.

  • Overreliance on Store-Level Data

    Focusing only on store-level inventory without considering distribution center stock resulted in inefficient product allocation and replenishment decisions.

Algo’s solution

The brand used Algo’s Intelligent Inventory Optimizer to improve lost sales estimates, optimize substitutions, and enhance inventory decisions, leading to reduced stockouts and operational costs​.

  • Accurate Lost Sales Estimation

    The implementation of Algo’s Intelligent Inventory Optimizer (IIO) allowed the brand to accurately estimate lost sales by factoring in distribution center stock levels, leading to more informed and effective inventory management.

  • Optimized Product Substitutions

    IIO analyzed customer behavior and substitution patterns, enabling the brand to identify suitable product alternatives during stockouts, which reduced lost sales and improved customer satisfaction.

  • Improved Inventory Decision-Making

    By integrating real-time data on stock levels and customer trends, the brand was able to make smarter decisions about product allocation and stock replenishment, leading to a 30% reduction in lost sales.

  • Reduced Operational Costs

    The accurate forecasting of demand and substitution potential helped minimize the need for costly emergency stock replenishments, improving overall supply chain efficiency and reducing operational expenses.

The results

By implementing Algo’s Intelligent Inventory Optimizer, the brand achieved significant improvements across key areas of their supply chain, leading to notable reductions in lost sales, enhanced forecasting, and overall operational efficiency.

  1. 30% Reduction in Lost Sales: The implementation of Algo’s IIO led to a significant 30% decrease in lost sales within the first six months, improving the company’s overall revenue and profitability.
  2. Enhanced Forecasting Accuracy: By considering distribution center stock levels and real-time data, the brand improved the accuracy of its sales forecasts, allowing for better inventory management and planning.
  3. Increased Customer Satisfaction: The ability to offer substitute products and reduce stockouts resulted in higher customer satisfaction and strengthened loyalty to the brand.
  4. Cost Savings on Replenishments: Accurate demand forecasting and inventory optimization reduced the need for costly emergency stock replenishments, resulting in substantial cost savings and improved operational efficiency.

Improve your inventory management and cut lost sales by 30%. Contact us now to optimize your supply chain for success!