Inventory management is a balancing act. If there's a shortage of merchandise, retailers may lose out on potential sales. If there's too much, retailers may have to deal with warehouse costs, spoiled products, out-of-season goods, or other concerns.
Traditional inventory control practices currently aren't cutting it. According to a 2019 study by PwC, says that the distance between large and small companies is increasing and a main driver of this is in regards to inventory performance. Days Inventory Outstanding (DIO) is an efficiency metric used to understand how long a company holds inventory before selling it. Larger companies, on average, are able to clear out their stock rooms 27.8 days sooner than smaller businesses. However, smaller retailers are taking strategic measures to optimize their inventory which is reflected in a narrowing of the DIO gap.
But making moves to keep inventory, well, moving, shouldn't be left up to the small retailers; effective inventory management is beneficial for all business. Here are a few techniques that wireless retailers - big and small - can employ to keep stock fresh.
3 Alternatives to Traditional Retail Inventory Management Practices
1. Drop shipping
Instead of using traditional techniques like just-in-time management, which relies on accurate forecasting and warehouse management duties, retailers can turn to a more convenient form of inventory control. By using drop shipping, they no longer have to store and ship items—cutting carrying costs and saving time. Once an order is submitted, the vendor or wholesaler is notified and they can handle this task instead. That means retailers can concentrate on more important matters, like providing their customers with a satisfying shopping experience.
- Minimize the amount of floor space required and save on rental costs.
- Allow employees to focus on being brand ambassadors to help improve sales.
- Ensure customers can easily receive their orders at home, work, or in-store.
2. Endless aisle
Customers have grown used to finding and ordering anything from online stores, whether it's a rare baseball card from eBay or a specific pair of noise-cancelling wireless headphones in rose gold from Amazon. They expect the same flexibility when they walk into a brick-and-mortar store. That's why sales associates need to have a digital tablet ready when they greet a customer, so they can offer the store's entire catalog upfront. Endless Aisle is an effective way for retailers to bring the digital and physical components of shopping to the in-store experience.
- Enable customers to quickly find what product they're looking for.
- Easily update product pages through a centralized platform.
- Gain insight into product views and session durations, which can help determine what to stock more of in the future.
3. Intelligent inventory
Many companies aren't leveraging analytics to manage their inventories. According to a report by Wasp Barcode Technologies by Wasp Barcode Technologies, 43% of small businesses manually track inventory stock or don't even track it at all. Upgrading to an automated digital process can easily bring inventory control up-to-date. With intelligent inventory, retailers can harness big data to manage their stock and order more before they run out.
- View inventory history reports.
- Gain real-time visibility into stock quantities and details.
- Auto-generate purchase orders for convenient order fulfillment.
Effective solutions for inventory management problems
These three alternatives for inventory control can solve many problems encountered by brick-and-mortar retailers. Worried about not being able to sell a product that's only available online? Endless aisle has got you covered. Concerned over your retail square footage? Consider drop shipping. What about those long nights counting stock for the holidays? That becomes so much easier with intelligent inventory. With these modern inventory management solutions, companies are in a better position to succeed.
Whatever retail industry you operate in, you have undoubtedly had challenges with stocking, ordering, delivering and, most importantly, selling products to your customers. Trust me when I say, you’re not alone. iQmetrix works with industry-leading, vendor managed inventory partners to help alleviate some of the challenges in keeping retail stores stocked. Through analysis of market trends and conditions, these partners help retailers keep inventory balanced with optimal stock levels.
When a retailer focuses on improving and rationalizing their inventory management system capabilities, it can mean a ripple effect of benefits for their entire retail business.
But how do retailers get over their inventory obstacles? Well lucky for you, we wrote a guide on strategies for approaching inventory management.
4 Ways to Improve Inventory Management in your Retail Store
1) Leverage Inventory Cost Control Opportunities
Understanding your inventory needs and ordering appropriately can be a huge win for controlling costs. Having visibility into what you have and what you need is vital to the success of the inventory manager. This allows them the opportunity to lower the per-item charges with bulk purchases and mitigate expansion costs by leveraging buying power with vendors.
2) Automating Inventory Management and Ordering
Retailers need to consider deploying the appropriate retail software, like those with vendor managed inventory (VMI) functionalities. These tools can integrate with and pull the necessary data from the most current internal retail management systems. With a fully VMI-integrated tool like iQmetrix’s retail management solution, RQ, businesses have an eagle-eye view of inventory data. It makes it easy to forecast stock requirements and automatically order popular items that keep customers coming back.
3) Go Beyond the Physical Stock
We know it’s not possible to stock every item; however, there are ways to ensure the customer can always leave with the product they want. Incorporating a fulfillment solution, like iQmetrix’s Dropship, into an inventory management process allows retailers to offer an expanded array of products and accessories, without taking up valuable shelf space.
4) Bringing Data-Driven Logic to Ordering
Speaking of product visibility mentioned above, bringing data-driven logic to ordering can give retailers more opportunities for revenue growth. Relying on data, like historical sales and analysis of the impact of past promotions, helps retailers avoid the twin perils of overstocking and understocking. Using irrefutable data from your inventory center means avoiding the most common inventory turnover challenges. many ways your business can optimize inventory and ensure stock doesn't go stale.
These are only seven of the many ways your business can optimize inventory and ensure stock doesn't go stale. Interested? Register for the upcoming iQmetrix Spring Cleaning webinar and refresh your stock with tips from the inventory experts.
Feature Photo: Dmitry Kalinovsky / Shutterstock.com