Whether you’re an omnichannel retailer or a merchant with multiple store locations, inventory management is the lifeblood of your operation. It’s where most of your capital resides. By managing inventory with automated solutions offered by industry experts like GOC Retail, you can generate more sales and make more money.
But there are many approaches to inventory management. Which method will work best for you? Here are four suggestions to give any company a leg up on its inventory management practices:
1. Understand What Your Customers Want First
A recent trend in the retail industry has been to use one-to-one marketing strategies that involve tracking individual customer preferences and behaviors based on their purchase history.
This includes everything from online retailers gathering information about their customers’ browsing habits on their sites to brick-and-mortar stores using in-store tracking tools to monitor customer traffic and purchasing trends. This data is a crucial part of businesses’ “know thy customer” strategies.
Inventory management software can also benefit from these customers’ insights, but it’s just the first step toward proper inventory planning. For that information to be helpful, you must know how your customers use your products, when they purchase them, and what influences those decisions.
Answer questions like:
- How do they interact with your product catalogs?
- Why do different customers look at various items while shopping on their tablets versus browsing on laptops versus purchasing in person?
If you have insight into the above questions, you’ll be able to pinpoint which products are most profitable and most in demand.
2. Make Sure Your Inventory Is Right-Sized For Each Store Location
How many products that you have in your brick-and-mortar locations are also available online? How does this affect business when customers can’t find what they’re looking for during their visit to one of your stores? Inventory management is more than knowing where all items are at any given moment; it’s also about matching customer supply with customer demand.
Do some customers come into your storefronts and prefer buying online instead (or vice versa)? If you understand the reasons, you can optimize sales by stocking enough of the most popular merchandise in each sales channel.
Furthermore, there’s nothing worse than having an overstock and having to mark down prices or send excess inventory back to suppliers. Conversely, understocking items in either the physical store location or the e-commerce storefront can lead to lost sales and costly returns.
Whether you’re a bricks-and-clicks retailer, a products multipurpose merchant, an omnichannel integration specialist, or anything else in between, your business must operate each of its sales channels separately from one another when it comes to inventory management.
The only way to predict how much stock should be at each location accurately, you need to have detailed information about which products sell best.
3. Invest In Software That Brings All Sales Channels Together
What’s the point of having separate inventory management practices for each store location if you can’t view comprehensive, consolidated data about inventory across all sales channels? With out-of-the-box retail management software, it’s possible to see data from multiple stores or e-commerce storefronts on one website.
This helps companies understand which items are selling best, which ones are lagging in each channel, and what trends are taking shape due to your inventory management efforts.
4. Be Proactive About Anticipating Customer Needs
Be proactive about anticipating customer needs by using tools like predictive analytics to know which products will be most beneficial for customers soon. Then ensure that those items are available when needed, whether at a physical store or online.
Another best practice is to use item-level RFID, which can pinpoint the exact locations of products in real-time. If you’re struggling with inventory issues, it may be time to invest in sensors that are capable of detecting when items are running low or are misplaced somewhere within your retail space.