Inventory Management for Retail
By Debbie Gregory.
We hope that you enjoyed the prior article in this mini-series on Inventory Management. This second article is about Retail. Keep in mind that retail outlets have very different needs than other ecommerce businesses. Retail stores are really required to have their inventory on-hand as compared to online stores that may utilize drop shippers and do not actually have any physical inventory. Often, they do not need to tie up capital with inventory until clients place their orders.
Below are some good practices for retail inventory:
1.) Automate It:
The best thing you can do for your business is to automate monitoring your inventory levels for each of your products. Having the input on exactly what people bought and how many they bought, in real-time, will enable you to keep appropriate inventory in stock. Set your system up to alert you at a preset level so you can refill the item(s) as quickly as possible. This will also help you keep better track of past performance and allow you to make better seasonal forecasts. It also means you will have what your customers want in stock and this translates to greater revenues.
2.) POS Analytics:
POS (Point-Of-Sale) analytics allow you to do more than simply track your inventory. Point of Sale analytics will tell you quite a lot about your company’s overall performance, how every product is selling and how many items you sell over time. These analytics let you know which items are performing well and those that are not.
A POS analytics system answers important questions including:
- What are my best-selling products?
- Are these products strong sellers all year long, or is there a special season when they sell better?
- Do some products perform better in one part of the store than another?
- Which of my stores perform better than my other stores (which specific locations perform better than others)?
- Which items were purchased with coupons?
- Which items are purchased together the most?
3.) EDI:
Electronic data Interchange (EDI) is a cloud-based system that replaces the old-school email, phone, and fax order placements. EDI combines all the typical documents needed for a single transaction including purchase orders, purchase order acknowledgments, advanced shipping notifications, packing lists and invoices into one easy to use digital system. Your staff will no longer need to compare different physical documents to place an order, confirm inventory, send incoming shipment alerts, confirm what was shipped, bill for items received,and more.
4.) Practice Order-to-Shelf:
Order-to-shelf (OTS) Inventory Management is a new trend that was started by several grocery stores to reduce their storage and labor costs. It is just like the “just-in-time” inventory process many automotive manufacturers use. Basically, everything that you need for the day arrives that morning and you sell everything by the time you close your store for the evening. The next day a truckload is waiting for the process to begin again. This reduces spoilage and cuts down on storage costs since you are not storing anything, and nothing will go to waste.
VAMBOA hopes that this second article in our mini-series on Inventory Management has been helpful to you. Stay tuned for the rest of this informative series. We want to remind you that VAMBOA has joined forces with Dell Technologies to provide special discounts to our members and friends. With the new normal, there is a huge need to update our computers and peripheral products. Here is a link to the discounts:
