How cost effective is your supplier and inventory management? Retail store analytics provides the answerBy Paula In Business Intelligence & Analytics
Strong sales need a cost effective back end
No matter how strong your sales on the shop floor is, unless your back end management is efficient and effective, the revenue you generate will be eaten away by the cost of doing business, the cost of sourcing and transporting goods to the stores, and margins will be eroded. Sales, of course, is something that every retailer recognises as the key to a successful business.
What is harder to know is just how effectively your supplier management, logistics and inventory management is operating. I speak to retailers on a daily basis who are struggling with just that – they know the importance of a cost-effective back end operation and have some ideas about where they may be spending unnecessarily, but as for cold hard facts – well, that’s where they struggle.
Visibility is the key
The key to running an efficient retail operation is visibility. Visibility of sales at the front end and visibility of costs at the back end. Both contribute to bottom line profit, and so it is equally important to have a clear view of what is going on in each area.
Visibility is achieved by capturing the right data – usually something there is no shortage of in a retail operation – and analysing it to produce actionable information and insight. And that is where retail business analytics systems play their part.
Retail business analytics systems, such as ours at iVend, give retailers the powerful tools they need to make informed and impactful business decisions.
Business intelligence dashboards give an at-a-glance health check of key business performance criteria, with the option to drill down to understand more detail about exceptions and out-of-line figures. Today’s retail business analytics systems are available anywhere and everywhere, from mobile or desk devices, putting the right information into the hands of the right people at the right time.
With that data, it becomes much quicker and easier to, for example, compare costs between suppliers or of a supplier over time. The true cost of transportation and logistics can be analysed, step by step from factory to warehouse, allowing retailers to work out where action is needed to streamline and remove cost from any one or more stages of the process.
Answering the big questions
Inventory management also benefits from visibility: Are there products for which the retailer has customer demand, but is unable to supply? How long does it take to re-stock that product and what is the impact on lost sales? Conversely, are there products that are over-stocked and which have to be sold at a reduced or negative margin, just to shift them and free up space for more profitable lines?
iVend’s retail business analytics solution helps retailers by providing insight and answers to questions such as
- What products should be sold together?
- How strong is product performance across a category?
- How good is the shelf life of my products?
- How does pricing impacts sales volumes?
- Which products produce the largest returns?
- Which products generate the most revenue, andprofit?
The bottom line
Retailers want to run an effective, productive and profitable business – retail business analytics gives them the tools to empower staff on the floor and in head office to make decisions that take them towards that goal.