Nordstrom and Macy’s Abandoned the ‘Retail Inventory Method’ after Using It for Decades. Here’s Why.

Many large retailers are abandoning the “retail inventory method” (or RIM), the long-held practice of utilizing retail prices to estimate inventory, in favor of cost accounting. While there are benefits that have contributed to RIM’s century-long, industry-wide use, retailers are opting for methods that utilize modern technology and reduce margin of error.

Joe Schmitt elaborates on the role of shrink, including the potential benefits of cost accounting for retailers struggling with a shrink problem.

Read his commentary.