Every item on every shelf represents cash that’s working for your business, but is that cash working as efficiently as it could be? Too much stock means cash is idle, while too little stock loses you potential profits through unsatisfied demand. Moving stock that’s in the wrong place eats into profits, and stock that becomes obsolete is just a sad waste.
A single view of stock
The solution to the problem of having too much, or too little, inventory starts with a bird’s eye view, showing what you have and where it is. A truly global picture also tells you what’s on order and what’s already allocated to customers across every channel.
Almost one in two multi-channel retailers has limited visibility across channels.
This single view of stock is already a reality for businesses who’ve made the investment in the technology required to deliver it.
Faster stock movement
For the most successful multi-channel retail operations, ‘just-in-time’ is a daily experience, not a distant ambition. Powered by information from integrated systems, stock flows in from suppliers at just the right moment for it to be shipped out to customers.
The benefits of just-in-time for retail:
- Working capital is only tied up in stock for the minimum time.
- The business can grow without requiring more warehouse space.
- Overstocks and understocks are avoided.
What’s needed for retail just-in-time:
- Excellent visibility of stock movement across the business, as close to real-time as possible.
- Detailed coordination with your suppliers, ideally with integrated systems.
- Clear inventory strategies with well-defined triggers for key actions.
Slow moving stock eats profits. A recent audit revealed to one business that over 16% of its distribution centre was given over to slow selling inventory.
Management of multi-channel and multi-location
There’s no reason why selling through a mix of channels and from a variety of warehouse and retail locations should create inefficiencies and costs. Overcoming the challenges of multi-channel retail is possible, as firms such as John Lewis, Multichannel Retailer of the Year 2013, are demonstrating.
There’s no denying that multi-channel success requires investment. John Lewis is open about spending heavily on the technology that allows them to operate click and collect, mobile commerce and new format stores blending online retail with the traditional retail experience. Sales are up, and so are profits.
Flexible delivery services such as Click & Collect, Collect+ and Hermes are just some of the ways successful multi-channel retailers are achieving stock efficiencies as well as increasing sales.
Offering a choice of delivery options allows the consumer to choose the delivery option most convenient for them. Companies such as Next, Marks & Spencer and Arcadia Group utilise their extensive store network as a delivery and collection point for online orders. For companies without a store network, services such as Collect+ and Hermes offer a collection and returns service via local convenience stores and independent retailer network, allowing consumers to collect and return goods from as early as 6am through to 11pm at night.
This service generates higher stock turnover by fulfilling and despatching stock from central warehouses. Some companies also use their stock in-store to fulfil click and collect orders and other companies such as Argos have redefined their proposition with the ‘Reserve and collect’ service at their stores, which allocates stock direct from the store warehouse. Uncollected orders are put back into stock after a 48 hour period.
A solution for today and tomorrow
The ideal multi-channel retail stock management system goes beyond addressing today’s challenges – it’s also a platform for the future.
The retail landscape has reshaped dramatically in a single decade and more change will come as technology and economic recovery develop and buying patterns change.
It’s with an eye to this future that forward-thinking multi-channel retailers are installing adaptable and flexible solutions, cutting costs, boosting efficiency, all of which is sharpening their competitive edge.
150 years of experience: learning from John Lewis’ multi-channel approach. Read this guide to their success to find out: Multi-Channel Leaders, We Salute You.
This first appeared on the Sanderson Multi-channel Blog.Business & Finance Articles on Business 2 Community