Real-time inventory visibility is a pre-requisite for retailers to offer a unified shopping experience and customer delight. It goes beyond the intricate balance between overstocking and understocking.
Why plan inventory?
Holding inventory is unavoidable for retailers as it ensures uninterrupted operation. In this blog we shall understand some of the inventory management tactics that uses a smart retail merchandising system to help retailers remain relevant.
Adequate Stock Replenishment: With intelligent inventory management, retailers can have appropriate products in stock to cater to a larger diaspora of customers and their multi-faceted demands.
Easy Predictions of Product Returns: Robust planning helps retailers predict returns closely, thereby avoiding the overstocking and understocking of products.
But to leverage all of these benefits, an apt inventory management solution is crucial. A solution that is profitable both for retailers and customers.
Innovative Strategies to Reinvent Retail Inventory
At the heart of retail is inventory, goods, and the wares that retailers have in their brick-and-mortar stores. Even though it sounds obvious, the truth is that inventory in retail is indispensable to curating seamless experiences for customers.
Retailers today have moved beyond omnichannel, and they are trying out new models for effective inventory management. The good news is that these models are no more futuristic possibilities; they are already appearing and appealing to customers.
Let’s have a quick look at some of those possibilities that a modern retailer might want to explore.
Digital traffic today is humongous, and an already fragile retail ecosystem is trying to cope with it. However, a new age adjustment they have come up with is micro-fulfilment centers (MFCs). These are small-scale warehouse centers in urban locations based on demographics. It is a great way to keep both stocks moving and customers delighted with faster deliveries and lesser shipping costs because of a simple delivery chain. Also, retailers can stock up these small warehouses with products as per demand, to reduce wastage.
Using Stores as Fulfilment Centers
Long delivery timelines are never desirable. Retailers know that and leave no stone unturned to deliver fast, but certain things are beyond their control and delays happen, leading to customer dismay. However, when retailers start using stores as fulfilment centers, they do not need to map the order to the nearest warehouse; instead, the product can be shipped directly from the store.
Result: Customers are pleased to receive super-fast delivery, products continue to move from stores, and retailers can continue to replenish the store with new products. The idea is similar to how a rolling stone does not collect moss.
Convert Stores to Experience Centers
Consumers have evolved beyond imagination. In particular, the younger generations prefer shopping digitally over visiting stores. Comfort is their top priority. If retailers can tap into this sentiment and act intelligently, it is better for their brand identity and certainly inventory management.
How to accomplish it?
Converting stores into experience centers is a workable idea. In such stores, customers can have a sensory experience of a product and then order the same product digitally. It will be shipped directly to their doorstep.
Pro Tip: Have enough stock so that a few customers can make in-store purchases, if they so desire.
Leverage the Concept of Drop Ship Vendors
Using the concept of dropshipping allows retailers to get rid of physical inventory. In the dropshipping model, the retailer sells the product to the customer but passes on the sales order to a third-party fulfilment center, which then ships the product to the customer on behalf of the retailer.
The model reduces overstocking, and the question of understocking doesn’t arise since the volume of physical stock is limited and as the primary objective is sensory experience of the customers.
Prop Tip: Dropshipping retailers may miss out on providing an exceptional customer experience; therefore, they should invest in a highly efficient customer support team.
Besides the new-age inventory management strategies mentioned above, the more common ones are:
Discounts & Promotions
Giving discounts when you have excess stock is a no-brainer. But how about offering discounts strategically? One such effective way is to offer discounts to loyal customers through promotions. When loyal or high-value customers are offered lucrative discounts, there could be a quick clearing of the shelves.
Promotions & Automations
Promotions are indeed lucrative to customers and effective for retailers; but curating tailor-made promotions isn’t easy. Automations enables the designing of promotions more impactful, quicker, and less cumbersome.
Result: Better promotions; disbursing the right product to the right person at the right time.
The new mantra of retail is to have the right product at the right time. Along with physical stores, customers today have several other digital touch points. The retail ecosystem has gone beyond and above omnichannel and has become multi-channel. Consumers must be empowered to make an immediate purchase. Deferring a purchase might mean “a lost sale opportunity.” Growing immediacy among consumers and the increasing FOMO of retailers has made the concept of multi-channel selling highly popular.
Nevertheless, a side effect of multi-channel selling is efficient inventory management. Retailers can keep on toggling between channels to maintain optimum stock based on requirement while customer delight is taken care of.
It is a given fact that modern-day retailers are testing new and unusual operating models to keep pace with the ever-changing trends. The reason is obvious; consumers are indisputably in control and retailers must meet them whenever and however they can, whether by implementing new models or creating new markets. The three key aspects that every retailer should keep in mind are:
- Lay a robust foundation before diving into a new model
- Have a clear picture of what is in stock and where
- Understand their customers
However, last but not least, irrespective of the channels they choose, retailers should prioritize inventory management. A streamlined inventory management solution enables brands to quickly adapt to new models while having a single source of truth across the ecosystem. A sturdy foundation will help retailers to buy some time to plan accordingly and remain ahead of the curve.