In our previous blog post, we have discussed 3 key practices for retailers to effectively manage their inventory. Let's find out what the final 4 are.
4. Centralise your system management
Unify your inventory system into just one central system to ensure that you are in control of your shop's network, completely error-free and effectively. Plus, having a sole inventory management system allows you to maximise your sale capability. For example, if the system shows that one particular shop is selling fast and running out stock, you can easily transfer stock from the closest location to maintain the sale pace which will eventually increase the overall sale profit.
Besides, having your inventory system centralised keeps you from typical errors caused by multiple inventory management system like selling one inventory twice or other types of clerical errors. A scattered control system without highly managing skill will hold underlying problems and ineffective inventory information management.
5. Minimise shrinkage
“Inventory shrinkage” stands for the loss of inventory mainly because of damage, theft, misplacement, or mismanaged paperwork. Inventory shrinkage affects your business notably. According to the National Retail Security Survey (NRSS), retailers suffer 1.47 percent of average shrinkage and 15.3 percent of them was caused by clerical errors.
The best way to fix this is an automated inventory management system. Applications like pivot tables and retail calculations can dramatically support your business.
Read more: The Whys of Implementing POS Software
6. Monitor sell-through and avoid stock-outs
A study by Harvard has pointed out that customers lose half of their purchase intention when encountering stock-outs. To avoid losing customers, retailers should start integrating their inventory, sale data into a POS system. An automated system enables retailers to predict trends, customer’s behaviour and examine seasonal sale turnover of previous years, hence maintaining an appropriate stock amount all the time.
A modern POS system provides you with sell-through and weeks of supply reports precisely based on your sale and insight from your performance. Specifically, here are the benefits of a modern POS system:
- Remark your best-sellers, catch up on the hot trend and have your storage prepared for high seasons.
- Calculate your sell-through and your weeks of supply to keep track of your inventory, making the right decision at the right time.
- Examine lead times, plus compare weeks of supply to lead times, therefore, you can better control your stock and schedule your reorder points.
Read more: Concrete moves to Retail Pro 9
7. Manage ageing stock
One of the expenses that eat into your profits is stale inventory since it prevents you from bringing new stock in and increases your carrying costs. To manage the ageing stock, you can depend on sell-through and weeks of supply reports. With proper calculation, retailers are able to find out where the problem lies and come up with an effective solution.
To clear your ageing stock, try out these few strategies:
- Change the store display, present it at a more noticeable spot or group with fast-moving items in your store.
- Join or organise sales pop-up and special events.
- If the stock is over one-year-old, consider donating them to charity for a tax receipt.
Make the right move and prosper your business
It is important for retailers to look at the big picture and do not underestimate the importance of inventory. The right inventory management creates a unique image for your brand and attracts loyal customers. To effectively control your inventory flow and maximise your capacity, consider to implement a proper inventory data tracking application and centralise your inventory management.
A good inventory management plan can support you in controlling profit margins, monitoring of inventory shrinkage, enhancing identification and management of ageing stock and weeks of supply. Ultimately, leave a mark on your customers with fresh and neat items that keep them around for a long time.
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