Retail Inventory Management: Pick the Right Product for Growth

Retail Inventory Management: Pick the Right Product for Growth - Retail Inventory Management - Kinspeed Limited

Never has the supply chain been so challenging with fuel availability, driver shortages, energy prices, cargo delays and labour demands raising new and startling headlines every day.  Add to the mix an economy responding to Brexit red tape AND the pandemic – which significantly increased the transition to online ecommerce shopping – and it’s readily apparent that the challenges in retail inventory management are not disappearing in the short term.

Consider these two scenarios, with the additional challenge of new shopping patterns, seasonality and a larger target audience reach, alongside shorter delivery expectations.  

  1. Out of stock situations creating unhappy customers
    Stock levels are always challenging to manage, now more than ever.  The pandemic is still causing production delays in some countries due to staff quarantines and completed goods aren’t guaranteed shipment even with the inflated cost of cargo containers.  Reports suggest that large UK retailers have hired their own ships to ensure stock for Christmas, with one fashion retailer chartering planes to get clothing to Britain, hardly good news for the climate.

    Coupled with this global supply crisis is a consumer expectation of immediacy, next day delivery, and accurate online information of stock availability and delivery dates.  How does the retailer manage demand and communicate to the customer about realistic stock levels?  What inventory should the retailer hold in this new environment where ecommerce creates unprecedented purchases?  How, having acquired the customer, does the retailer keep them engaged when there isn’t enough inventory in stock and an uncertain supply chain?

  2. Overstock situations or seasonality impact creating unhappy retailers
    With so much uncertainty on supply chain, the retailer is left juggling unwelcome stock situations.  Goods ordered for the summer months, such as paddleboards, are not ideal if delivery is delayed to autumn, leaving the retailer with unsaleable product.  This takes up room in the warehouse, distribution centre or retail store, using up physical space that should be allocated to winter products.

    There are also cashflow implications, with ‘dead stock’ consuming working capital, potentially forcing the retailer to sell for lower profit.  Retail inventory management suddenly becomes critical to the business, to customers, and to future growth and scalability.

Retail Inventory Management Software that Scales

Managing these supply chain challenges is significantly easier with a flexible technology solution that can scale with business growth.  Achieving optimal inventory levels is a delicate balance but is possible with a platform that enables real time inventory visibility across product ordering, warehouse, and sales fulfilment.  A scalable system is designed to maintain high levels of performance when workloads increase; it adapts to reflect changes in the business, through market expansion, increased sales, and new customer bases.  The right software will enable retail inventory management for small business and scale with the business, reducing the need for updating the business management system.  One platform, chosen with care, can operate for 100 orders per day and 24,000 orders per hour!

Choosing the Right Retail Inventory Management Software

So how to start the selection process for a good inventory management system?  First, it’s worth having a good understanding of what Retail Inventory Management is, and there are multiple blogs describing just that.  Here’s one from NetSuite, the world’s leading ERP solution.

Second, is to have absolute clarity on your current and future requirements.  Ensure you have time to devote to the selection process, this is not a task for the midst of your busy season.  There are three core questions to ask:

  1. What are we using currently and is it working for us? Are we duplicating efforts with manual data entry on multiple systems, or even worse, on spreadsheets?  Are we regularly over or under stocked and unable to forecast for demand?  Do we need constant physical counts to reflect our stock positions?  All these questions and more can be considered by a consultant, a software vendor or ERP implementation partner who will identify what is missing and how to resolve.
  2. What limitations does our current system have? Do we have a wish list of requirements from our inventory management software?  Are we linking products with supply chain, with customer demand, with order fulfilment?  What impact does stock have on our financials and business management?  A flexible, adaptable, cloud-based software solution can address these issues and provide data in real-time.
  3. What will we need this time next year? What will we need five years from now?  Does our inventory management approach reflect our business plan?  Are we future proofed?  Can we link our retail proposition with our order fulfilment, completing the cycle from order to fulfilment with the right product in the right place at the right time?  Software such as FastDespatch is an ideal complementary solution to inventory management, ensuring orders are despatched in a timely way and tracked.

For help with choosing a Retail Inventory Management Solution that scales with your business, download our guide

Implementing Retail Inventory Management Software

An optimal retail software solution is fully integrated across the business AND will scale with growth.  A scalable inventory management solution can reduce costs, improve efficiency and simplify the distribution environment.  By fully integrating retail software with your business management system, you can operate one cohesive omnichannel business, connecting multiple departments:

  • Financials and Accounting
  • Sales and Marketing
  • Customer Relationship Management
  • Order Processing and Fulfilment
  • Inventory Management
  • Warehousing and Despatch

Choosing the right retail inventory management software is crucial and there are multiple options to consider, including integration with your existing retail systems and business management systems.  An absolute is that the software is specific to retail and that the software implementation is managed by a partner with experience in retail systems.  Kinspeed base their integrated retail solutions on software from NetSuite or Sage 200, with .Net Development to ensure perfect fit for your business.

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