Retail Inventory Management System- A best practice for retail industry
The first pioneers of inventory management were shop keepers and merchants. Retail inventory management system has come a long way since then. The scales of operations are no more minuscule and today every retailer should have an effective retail inventory management system irrespective of the size of your business. Barcoding and wireless mobility requirements are already in the market for years now.
In recent years, RFID technology has made its way into retail stores. Radio frequency identification (RFID) uses a microchip to transmit information (like type, manufacturer, serial number etc) to a scanner. It should be noted that all the good systems still leave some room for human decision-making. They do their tasks brilliantly but still leave a final call option to the managers.
As we can see all around us, most retailers have bought into the multiple advantages offered by such retail inventory management systems. Advantages like high efficiency, lesser space, effective rolling of cash without being tied up, more effective information sharing between retailers, vendors and customers etc are given advantages by implementing these systems.
There is also a multi-channel move that is happening in the retail sector. In-store channels and mechanisms like mobile-shopping and virtual dressing rooms are now being utilized to offer shoppers a choice to experience shopping on multiple devices.
This practice is growing tremendously in retail. Retailers are competing hard to provide a seamless shopping experience at any place or device. For these reasons, real-time inventory management across all channels is becoming more important.
In short, retail inventory management has become a very important aspect of the retail industry itself. Though such automation measures are making things easier (for both online and offline activities), it is recommended to use some crafty measures and techniques that will help retailers manage their inventory much better.
A few of them are explained below:
Accuracy in tracking
Retail inventory management systems need accurate calculation. Simply considering how much you can stuff in your facility is not the right way to go. There are factors to be carefully evaluated like how much you have sold in the last month and the month before that. For example, if you have been selling 100 stock or merchandise every month for the last couple of months, it is better to project a number around 100. Of course there are other factors to consider too (like season).
Inventory tracking is an area where mistakes are bound to happen (during order-fulfillment for example). This is where inventory management systems like barcode scanner & electronic data interchange (EDI) should be actively used.
When calculations and tracking are erroneous, the purpose & some advantages of inventory management systems are often defeated.
Fast moving & slow moving items
This is a simple process to understand but a tricky one to satisfy. Items that sell quickly need to be stocked accordingly and its procurement & availability automatically becomes a top priority. All retailers are aware of this process.
But, there are periods where the slow moving product suddenly goes up in demand and you might be caught unaware with no supplies to back it up (just because your inventory management system suggested keeping that stock low priority). Large retailers install costly and complex inventory systems for demand forecasting while small retailers predominantly communicate with their suppliers. This is one challenge that can pop up any time in the retail sector.
Therefore, discriminating between products and calculating accordingly is an area that retailers always have to keep in mind while managing their inventory.
There is a common rule that most retailers are aware – that 80% of consumer demand is generated by 20% of all their merchandise. We recommend you to continuously review the stock position of those items and others because both are your priorities (but in order of importance). Again, using automated inventory management systems highly reduces your difficulties for these tasks.
Stock optimization
Continuing from the above point, stock optimization is an important area that provides efficiency in inventory control and which gives you some leverage against the uncertainties of fast moving & slow moving items.
Some proven techniques that strengthen your stock optimization efforts include updated stocking policies, automatic retail inventory management systems, inventory turnover ratio, inventory audit and budget etc.
Selecting the right software features
Retailers should narrow down the most important features that suit their requirements (for example, features that optimize their stocks, manage their inventory effectively etc). Some of the features that are crucial to retail inventory management are:
Multi-channel selling: It is already common but still important. Any software needs to have this feature so that customers can access your site from different devices.
Paper flow reduction: Paper flow reduction plays an important role in increasing warehouse productivity.
Scheduling: Any advanced retail inventory software should schedule tasks that are repetitive in nature
Operation consolidation: This is fast becoming a norm and a necessity. Inventory optimization for multiple tasks and areas under a single unique dashboard is tremendously helpful for retail inventory management.
Exciting times and new challenges lie ahead – Be aware of your Retail Inventory Management System requirements
Retail industry is rapidly turning virtual. We can already sense a tremendous race that will accelerate in the years to come in their quest to satisfy the growing appetite and needs of the customers. The most visible impact of these changes is often seen in the retail sector.
Mobile commerce, omni-channel retail experiences, integration technologies, home-delivery trend etc are some of the areas that could explode to new heights. In this scenario, an effective retail inventory management system could make or break a retailer. Upgrading or purchasing a new software depending on the ever-changing industrial requirements is the key here to continuously improve your processes, boost performance for that all-important competitive edge.