In wireless retail, one of the most critical areas for creating a consistent customer experience is inventory management. Getting inventory right — the old retail mantra of the right product in the right place, and at the right time — is vital for any business, but even more so for wireless. A wireless retail environment must manage hundreds of SKUs like high-value items such as smartphones, data-only products including health and fitness monitors, and connected Internet of Things (IoT) devices. Wireless carriers need to focus on improving and rationalizing their inventory management capabilities to produce positive ripple effects in other key areas of their businesses. The benefit of an optimized inventory management system include:
- Cost control through bulk buying and making greater use of inventory already in-house;
- Creating a consistent customer experience with dependable product availability and pricing across multiple retail locations
- Automated ordering through drop-ship fulfillment, thus reducing the frequency of out-of- stocks;
- Smarter, less emotionally-driven ordering that is instead powered by data-based inventory and sales analytics;
- More effective loss prevention, stemming from frequent inventory counts and item serialization solutions.
And that’s just the beginning! Inventory management means increased profitability and customer satisfaction without the headache. Here’s how it all comes together.
- Inventory Cost Control Opportunities
- Unification of SKUs: the Key to Enabling a Unified Customer Experience
- Dropship Adds Flexibility to Inventory Management
- Bringing Data Driven Logic to Ordering
- Case in Point: Inventory Management Give Wireless Retailers Tools to Manage Growth
- Enhanced Serialization Means Improved Workflows and Streamlined Transfers
- Mitigating Risks with Inventory Management Tools
- Advanced Solutions for a Highly Competitive Industry
- About Retail Touchpoints
Inventory Cost Control Opportunities
For any type of retailer, inventory visibility is a key building block of business success. Improvements in this area are critical for keeping inventory costs in check, as well as ensuring retailers have the items customers want on hand. Even a small reduction in total inventory can have a large impact on costs and profitability, since inventory is typically a retailer’s second-largest cost center (labor is generally the top cost).
Deploying an inventory visibility solution is important for cost savings as carriers unify their customer experience across hundreds, or even thousands, of retail locations. For example, if a customer in one shop is looking for a phone or accessory that’s available in another location, it can be faster (and less costly) to transfer the item rather than order a new one from the manufacturer or distributor. Inventory visibility also is critical in an industry with frequent and rapid new-product introductions. Having the newest model phone or connected home product in-stock (along with the appropriate accessories) is vital to a retailer’s ongoing profitability. Without having access to sell an exact item at the precuse time when the demand for these items is hot, a wireless retailer will likely lose the sale and the customer’s faith. So, the lesson here is to ensure the customer can get the product they want at any time and at any location.
Unification of SKUs: the Key to Enabling a Unified Customer Experience
Unifying SKUs across multiple, and often highly varied retail locations, lets retailers arrive at one standard set of SKUs across a full network of stores. With this standard SKU set, changes in pricing, promotion, naming, and more can be fed into every store instantaneously and consistently.
Imagine a launch of a new device. As soon as the device promotion is announced at the carrier level, the consistent price, promotion, and naming around the product is then fed across all retail locations without the need for store managers or employees to manually enter the new product data. Otherwise, this manual process can (and does) result in delay and inconsistencies in product availability, pricing, and promotions between one store and the next.
Looking to allow for customer returns to be accepted in any store, regardless of if it’s corporately or authorized retailer-owned? This is also possible with unification of product SKUs, as it allows for retailers’ systems to recognize returned stock and place it back into their inventory system for a future sale or store transfer.
Dropship Adds Flexibility to Inventory Management
Incorporating drop-ship capabilities into an inventory management solution allows wireless retailers to offer an expanded array of products and accessories, without taking up valuable peg space in what are generally small-footprint stores. Additionally, retailers don’t have to tie up valuable inventory funds stocking items that may have a low turnover rate.
When a customer does order a specific item instore, it is then shipped directly to the customer or to the store for pickup. Invoicing only occurs when the order is placed, so retailers get the benefit of satisfying their customers at a minimal cost. Additionally, by analyzing purchase patterns for items that are drop-shipped, retailers can determine whether it makes sense to stock them in their stores in the future.
Bringing Data Driven Logic to Ordering
With the reporting and analytics functions built into advanced inventory management solutions, carriers can make smarter decisions about which items to order, as well as optimal in-stock levels and replenishment schedules. Relying on data such as historical sales and analysis of past promotions’ impact helps carriers avoid the twin perils of overstocking and understocking.
Using data that everyone agrees on helps carriers avoid many of the most common inventory challenges. Even the smartest carriers can get caught up in the emotions generated by a product “fad,” leading to over-ordering of items that only have transient appeal. Conversely, careful analysis of past product launches can help wireless carriers stock enough accessories, such as cases and earbuds, to meet customer demand. Inventory management solutions allow carriers to order enough for their entire chain, and to allocate more of this inventory to the locations that are likely to sell the most phones and products.
Case in Point: Inventory Management Give Wireless Retailers Tools to Manage Growth
At a time when Pro Cellular Wireless Communications was in a rapid growth mode, the 24-location wireless retailer saw the need to move from paper and spreadsheets to solutions capable of tracking employees, inventory and payroll. The retailer selected RQ, the iQmetrix POS and Retail Management System, which “really brought everything that you need to run your business into a central place,” according to Michael Johansen, Pro Cellular’s Director of Operations.
The solution’s scalability was a major benefit in inventory management, providing detailed insight into what was happening at each store location. “It’s very easy to watch all your locations and see where all your inventory is sitting,” said Johansen. “Compatibility between locations for things like transfers, purchase orders and employee tracking can help you scale very fast if you need to.”
For Pro Cellular, key functionalities of RQ have included:
Auto Ordering Report: Seeing all products from a particular vendor in a single view ensures no products are missed in the ordering process. Setting minimum/maximum levels for individual items means each store will have the right amount of stock at any given time. Builtin sales tools revealing what was sold during the previous 30 days aid in forecasting and planning.
Transfer Functionality: The ability to move items from an overstocked store to one where the item is urgently needed gives Pro Cellular greater flexibility as well as the ability to meet customer needs more quickly. Minimum/maximum settings help the retailer’s inventory manager and individual store managers in selfstock balancing between stores.
Return Merchandise Authorization (RMAs) and Count Sheets: Having RMAs in this system allows the retailer to keep all information in a single place, where it can be updated to provide a better understanding of profit and losses. Creating count sheets based on inventory categories ensures the right stock is being counted at proper increments in order to see where stock may go missing. By performing these counts often, Pro Cellular can see if any products have been stolen or misplaced.
Product Summary Report: This report helps Johansen understand inventory turnover ratio and location inventory on-hand budgets. The combination of these reports ensures the retailer has the right products on hand to support its goals and reduce obsolete inventory.
Enhanced Serialization Means Improved Workflows and Streamlined Transfers
As wireless carriers move toward more sophisticated inventory management, they can leverage the product serialization provided by cell phone manufacturers. Solutions such as RQ allow retailers to use these serial numbers to track items throughout their entire life cycle, across all retail locations, corporate or authorized retailer-owned. By tying sales and workflows such as activation to each item’s unique identifier, retailers get a more accurate picture of product sales on a granular, per-item basis.
Serialization also gives retailers a powerful tool for combating theft and other forms of fraud. Retailers can maintain a record not only of where the item is at any given point (received, in a back room, on the sales floor or sold) but also who has handled the item at each stage. If a product goes missing, the unique identifier makes it easier to determine whether it was broken, misplaced, or stolen. And when employees are aware that each item is identified within a retailer’s inventory system, they may be deterred from even attempting a theft. In contrast, it’s much tougher to figure out what happened to a few undifferentiated items that may have been lifted from a bin.
Retailers can supplement the serialization provided by manufacturers with inventory solutions that assign unique identifiers to a wider range of products, including accessories. Assigning serial numbers to high-ticket items (i.e., those priced at $50 or more) also simplifies functions such as store-to-store transfers and re-integration of returned items.
Mitigating Risks with Inventory Management Tools
Another benefit of advanced inventory management solutions is the ability to facilitate more frequent item counts. The current best practice for wireless retailers is to count cell phones daily, and to perform weekly counts of accessories. However, as retailers expand into wearables and homeand car-based IoT devices, they will need to perform more frequent counts of these high-ticket items.
These solutions also can serve as auditing tools for product-receiving histories. Performing these audits ensures that individual shops have the items they need to make sales. Additionally, these audits validate that payments to vendors align accurately with invoices that are received. By implementing reconciliation processes, retailers can discover and address issues around incorrect costs before they become a major drain on their finances.
Advanced Solutions for a Highly Competitive Industry
Wireless is a fast-moving, competitive marketplace, so translating growth into profitability will require a combination of superlative customer service and stringent cost controls. Sophisticated inventory management solutions are critical to achieving both of those business goals.
By ensuring that each wireless store has the items customers are seeking, along with accessories they may be encouraged to purchase, carriers can maximize each store visit and sales interaction. Inventory management solutions can keep costs down, both by eliminating the need for safety stock at multiple locations and achieving discounts with bulk buying.
Because inventory management is so central to retail operations, it’s a smart place for wireless carriers to start their journey toward more efficient and profitable operations. Not only that, but effective and consistent inventory management also ensures a unifying, loyalty-building customer experience.
About Retail Touchpoints
Retail TouchPoints is an online publishing network for retail executives, with content focused on optimizing the customer experience across all channels. The Retail TouchPoints network is comprised of three weekly newsletters, insightful editorial blog, special reports, web seminars, exclusive benchmark research, and a content-rich web site featuring daily news updates and multi-media interviews at www.RetailTouchpoints.com