Ahhh the stocktake…still one of the most common time killers for many retailers.
Traditionally, it has been a highly manual exercise requiring numerous staff members to be paid to do pretty tedious work. And, often, forcing you to close up shop to complete. If this rings true for you – I expect that you hate it, your staff hate it…potentially even your customers do (if you close your stores). But let’s face it, we all know it is a necessary evil right?
Maybe…I would argue that the ‘evil’ is more to do with how they are done rather than why…
Stocktakes are 110% beneficial (…not evil)
Inventory is the one of the biggest input costs in retail operations.
The Retail industry average for underperforming stock purchasing is 8.5% of annual investment – that would otherwise be profit margin! A stocktake is one of the central processes of good inventory management. For most retailers, it's also a mandatory requirement at the end of the financial year. It will help you provide fact-based answers to a number of critical operating questions such as:
• What are your shrinkage levels – theft, damage, unprocessed or missing orders? How much of a problem is it?
• Is the asset value of your inventory on your balance sheet real or fantasy?
• Are your purchasing processes based on calculations of accurate stock on-hand levels (or inflated / deflated levels)?
• Are your stores and website making sales commitments to customers based on factual inventory holdings?
It is pretty hard to argue that this information is not essential, right?
It’s not the why, it is the how that needs to be scrutinised.
Whilst a stocktake is unquestionably a necessary practice – it is the way that is done that I feel is the root cause of all the pain.
So many retailers are still suffering through highly manual processes that simply don’t need to happen. Below, I have identified the 5 most common mistakes we observed made by retailers when performing a stocktake.
If you are following just one of these practices, I strongly urge you to speak to us and learn how other retailers have automated and streamlined these processes.
5 unnecessary stocktake processes - still doing any?
Mistake #1 - Manual or “homemade” counting and reporting system
Clipboard and pen, excel sheet reports…no, just….no! With today’s technology you should be running a completely digital stoctkaking process. Instantly lookup each product in a centralised database, tap a few buttons to capture the key info and then move onto the next product. Reports? These should be auto-generated based on pre-existing templates. In minutes, not hours! Check out our other blog for a complete guide on how to digitise your retail stocktakes.
Mistake #2 - Counting the entire store stock each time you stocktake
Attempting to count your entire stores inventory in one exercise is risky. Doing this takes too long so you continuously put it off. Or, when you do, it takes so long that staff despise it and errors creep in. Instead you should be performing cyclical stocktakes. Simply put, choose one area of the store at a time, or one product category, and stocktake these areas in small batches on each occasion. Staff will be more engaged because it won’t take so long. And you will develop a healthy habit of doing regular, accurate, bite-sized stocktakes. Now, the only issue is that, if you are still relying on manual stocktake reporting systems, then organising these cyclical stock counts can be a recurring admin nightmare in its own right! Whereas, if you have digitised your stocktaking process, the software is going to do all the organizing work for you. You can use the same ready-made stock count input and reporting templates each time. And there is a record of which product / store area you counted last time. So you can simply pick up where you last finished off.
Mistake #3 - Stopping trading just to stocktake
Obvious point alert - cutting down your revenue generating hours should always be a last resort. But if you are running your stocktake processes manually then this likely to be an unacceptable reality. Retail Express customers have the unique ability to factor in sales that occur during their stocktake and offset these during the final count. This means their customers can still come into the store and spend!
Mistake #4 - Commencing a stocktake prior to having a stocktake plan in place.
The expression ‘if you fail to plan, you plan to fail’ is super-relevant to stocktaking. Without a plan in place, your staff will clash over the same areas being counted and layby & display stock won’t be counted correctly.
You need to write up a stocktake procedure in simple language with logical processes. It will ensure the counts are accurate and the labour costs spent on performing it are best utilised.
Mistake #5 - Allowing staff to input count data without a review and approval process
Too many retailers allow their staff to count and submit their results directly into the records without being cross-checked by a manager. This results in inaccurate stock adjustments – which defeats the entire purpose of the stocktake!
A good retail operating software will have built-in processes that ‘stages’ an employees count in a simple report that allows the manager to review it. The manager can then nominate items for a re-count, or accept them into the final stocktake adjustment.
It is easy to digitise & streamline your stocktake process
There is really no reason for any retail operation to be practising any of the above. There is a better way. Using the right retail operating software, it is possible to digitise your stocktake with a fraction of the time and effort.
Thousands of Australian retail stores have seen this pay for itself within a matter of months (we can happily show you the data and case studies to back this claim up). Looking to fast track your growth with a smarter Retail POS System?
Contact the Retail Express team today on 1300 732 618.