‘Out of stock’ – a phrase that no retailer wants to utter, and no consumer wants to hear. Not being able to buy what they want frustrates consumers, who are demanding that retailers are ‘never out of stock*.
At the same time, we’re seeing increasing stock outs, with 80%* of shoppers saying they saw a decline in stock levels in 2022. This lack of inventory costs retailers an estimated up to 8% of revenue in lost sales.
Inventory management drives store efficiency and customer experience.
Read about iVend’s smart retail technology for inventory management.
The causes are multiple and complex, including geopolitical events, the pandemic hangover, fuel costs and global staff shortages. Whilst these are outside retailers’ control, there is something they can do, and that’s to ensure they have efficient, modern retail technology for inventory management.
Inventory management systems give retailers visibility of all their stock, wherever it is. They help retailers ensure they have the right goods in the right place at the right time, improving store performance and enhancing customer experience.
Inventory management for improved store performance
Inventory management drives efficiencies in physical and online store operations:
Lower costs – inventory is one of the biggest investments a retailer makes, and too much stock ties up cash unnecessarily. Retailers using iVend’s inventory management software reported a 10% reduction in inventory investment.
Actionable insights – inventory data can deliver a better understanding of what sells well, where and when (and what doesn’t). This business intelligence informs sound purchasing decisions.
Reduce lost sales –Stock outs result in lost sales for the brand and/or the retailer. Shoppers are impatient, and most will chose an alternative, with only 12%+willing to wait for their first-choice item. If there is a stock out in a store, an inventory management system can still save the sale, by enabling staff to tell the customer if the item is at another store nearby.
Efficient use of store and warehouse resources –stock must be stored, moved and counted. Optimising the level of stock held ensures that no people or real estate resources are used unnecessarily.
Reduce spoilage and shrinkage – carrying excess stock of perishable or seasonal items risks those goods becoming unsaleable (except, perhaps at a large discount). Mis-recorded, mis-counted or misplaced inventory accounts for just over 25%++ of shrinkage. Smart retail technology for inventory management can reduce both these risks.
Omnichannel selling – automated retail technologies that give a single view of inventory across stores, warehouses and distribution centres allows online orders to be fulfilled from the best location. This retail technology enables omnichannel transactions such as rapid delivery, click and collect and curbside pickup.
Manage returns more efficiently – returns are a reality of retailing, but can cost up to 21%¶¶ of the order value. Efficient inventory management helps retailers get returned goods back onto the shelves and re-sold faster, reducing that cost.
Maximise profit – the combination of lower inventory costs, lower handling costs and not missing a sale makes a positive impact on the bottom line.
Inventory management for an improved customer experience
Avoiding stock outs is a very big step on the journey to an improved customer experience. Being told that the item they wanted is not in stock is one of the biggest sources of shopper frustration. It tests brand loyalty, with 65% of shoppers saying they would buy a different brand if their first choice is out of stock. It goes further than one lost sale too – an out of stock experience can damage the customer’s impression of the store and/or brand, creating longer term damage. A massive 91% of shoppers won’t engage with a store after a bad experience. Harnessing the power of digital technology in retail stores to get inventory management right gives an enormous boost to customer satisfaction.
In order to achieve these benefits, for store and customer, it’s important to have the right retail technology – an inventory management system that delivers all the functionality required to optimise stock handling.
What are the key things to look for when selecting retail technology for inventory management?
POS inventory management integration
Single view of inventory across all locations
Mobility – access from a range of retail technology devices, including mobile and hand-held.
Support for click and collect.
Inventory counting and adjustments
Efficient stock takes, with barcode scanning.
With the right retail technology solutions, retailers can manage inventory more efficiently, enhancing store operations and keeping customers coming back time and time again.
Why is single view of inventory important?
Stock is held in multiple locations – stores, returns processing centres (reverse logistics), distribution centres and warehouses. If these are treated separately, as siloes, there is a risk of holding too much stock, and therefore tying up valuable cash assets that could be used elsewhere in the business. Being able to see everything in one view means that stock can be managed as a single pool, and moved to where it is needed, reducing costs and management overhead.
How can smart inventory management increase sales?
If one location is out of stock of a particular item, that store clearly can’t sell it. But, if they can readily see that it is available at another store, and have the tools to rapidly reserve it for the customer, or arrange for it to be delivered next day, they can still make the sale and capture the revenue. Having this single view ensures that stock can be sold from wherever it is held.