The Complete Retailer’s Guide To Making Complex Inventory Management Simple

Table of Contents
  • Why is inventory management so important nowadays?
  • The costs of an outdated inventory management system
  • How to complete an audit of your current inventory management system
  • Building an agile inventory management system

Why is inventory management so important nowadays?

Whether you are a long-standing retailer or new to a venture, you won’t be a stranger to the near-constantly evolving demands of consumers. 

Gone are the days of your customers making purchases using one channel. Now, there is bricks and mortar retail, eCommerce, marketplaces, and customers wanting to purchase products straight from their social media channels. 

Stock needs to be available in the right quantities, across the right channels, and at the right time to keep customer satisfaction high. Without an inventory management system that can supply this level of stock control and visibility across every channel, you can face lost revenue, sale opportunities and end up with some seriously mismanaged stock.

So how do you keep your stores in balance and operating smoothly?

Retailers can now choose from a plethora of sophisticated systems to take the burden of inventory management off of their shoulders and tell them exactly what they need, when they need it.

But if understanding exactly what kind of inventory management system to go for, and what the costs are to your business if you run the wrong system is all too overwhelming, that’s what this guide is for.
  • Learn how serious business costs from overstocks, understocks, poor supply chain visibility and manual admin work can happen with an outdated system
  • Complete an audit of how your current inventory management is performing
  • Understand what features and integrations to look for in an agile inventory management system to build an omnichannel offering and lower costs for your business.

The costs of an outdated inventory management system

Inventory control, stock transfers, fulfilment — the goal of proper inventory management is to allow you to manage everything your company buys, sells and orders in one central, streamlined place. It ensures you have the right range of products available to customers without overcommitting to orders, spending extensive admin time and making decisions based on guesses instead of data.

Every retailer has different processes, but if yours includes lots of folders of spreadsheets, paper-based checklists and plenty of manual admin hours, it’s likely your inventory management could be doing more harm than good. 

Manual inventory management means you often don’t have a real-time, accurate view of your stock coverage or customer demand across all your sales channels. 

Here are just a few outcomes of using outdated inventory control processes.

Overstocks and understocks

Not having an accurate, real-time view of customer demand and sales data can lead to you misjudging what stock to buy and ending up on either end of what should be a balanced stock placement. 

Under-ordering stock can mean missing out on revenue opportunities, while overstocking can result in excess stock that’s left taking up space or being sold at discounted prices, affecting your bottom line.

Poor supply chain visibility

Stock moves fast through your supply chain, especially if you have multiple stores or an omnichannel presence. When inventory levels can change minute-by-minute, a manual approach means you can risk selling the same stock to multiple customers. You might also risk delays in shipping and fulfilment, which otherwise could be preempted and prepared for.

Extensive admin work

The right inventory management system reduces the amount of time spent on all stock related tasks, something that can quickly ramp up as you expand your product range or store locations. Manual stocktakes, calling other stores for inventory checks, purchasing and managing deliveries for multiple stores are just some of the endless tasks that will cost you in the long run.

Limited expansion

It’s important to think about your business’s growing needs. Are you planning on expanding your stores? Opening an eCommerce website? Or partnering with an online marketplace? As your business grows, you’ll need to manage multiple channels, stock locations and availability with a system that can offer automated, omnichannel processes.

Take stock of how inventory management is working for you right now

Understand where your inventory management can improve needs to begin with assessing where it’s sitting now. Take some time to put your current processes under the spotlight, and evaluate areas of your business, your needs and your daily activities.

Not only are you looking for areas where your processes can be streamlined, but you also want to think about how they would scale if you expand your business. 

Run through the following questions and audit your processes against them. Note down where you’re finding issues, delays or complications.

Start with a review of your current stocktake process. How often are you doing them? How long do they take? What are you doing with the information you get from them? Are they prone to human error and therefore bad data?

Compile an up-to-date inventory report and compare it with prior reports. Are there signs that your stock is moving too slow? If it’s meeting your benchmarks then are you actually losing out on sales due to being understocked? What is your inventory turnover rate overall and for different product categories?*

How easy is it to pull together an inventory report? Is it clear to read? Does it date quickly, leaving you without a real-time view of your inventory?

How much time is your staff spending planning what stock to purchase and creating purchase orders?

Have you lost money due to overstocks, or lost revenue due to understocks?

How are you currently predicting inventory demand?

How easy is it for different levels of staff to view the status of incoming or available stock?

Are you utilising multiple channels or cross-store selling, and if so, how easy is it to see and update stock levels across every channel/store?

Do staff often have to call other stores or your warehouse to confirm stock availability?

How easy is it to view your supply chain and receive real-time lead times or delays?

Can you offer customers multiple fulfilment options like pick up or delivery etc?

Can you bulk update products across stores and channels?

If you have an online store, can customers view in-store stock availability or have the option to click and collect?

What kind of feedback or reviews does your customer service team receive? What are the most common questions or complaints? Have they been solved or systems updated in response?

*Calculating your Industry Turnover Rate (ITR)

Your ITR calculates the number of times inventory is sold within a timeframe e.g. a year. The ideal number depends on your stock i.e. large furniture pieces may only sell a couple of times a year, while popular jewellery may need to be ordered multiple times a year, but look out for an ITR that’s too low (1) or too high (over 8)

Building an agile inventory management system

Every part of your business is affected by your inventory management processes, so it pays for them to be powerful, scalable and importantly — easy to use. If your audit has resulted in a few glaring areas to improve on, it’s time to think about exactly what a good inventory management system looks like. 

Setting up a system that includes the right tools is crucial to your business thriving now and long term. A good inventory management system should include all of the following and be simple for you and your staff to use.

Digital stocktakes

Any retailer would know that inventory isn’t something you can just leave alone — you need to know what stock you have on hand and make sure you continuously make decisions on what to replenish. This is why stocktakes are so critical. However, traditionally they have been a dreaded part of retail management because they usually mean shutting down your store(s) or paying staff to stay back after-hours to get it done.

We’ve talked about what poor stock visibility and outdated stocktakes can do to your bottom line, now let’s look at what an efficient system can do:

Look for an inventory management system that offers at least one or more ways to digitally scan in your stock, so you can spend less time double-handling counts and can efficiently perform regular cyclical counts with the store open

If you’re performing an inventory count with your store open, look for a system that factors in sales that occur during your stocktake to ensure accuracy

If you’re aiming to implement cyclical or partial counts, make sure your system stores a record of your last count and the product or area of the store you worked in

Retail Express integrates with RFID (Radio Frequency Identification) readers, to give you direct visibility of your stock as it pulls a count without you having to scan a single barcode. You can also go down the route of traditional scanners or a mobile scanning app. The most important consideration is a scanner that syncs directly with your POS to count stock levels in real-time

Setting your store up for a smooth stocktake

An efficient digital stocktake should give you two things; time and visibility. Brava Lingerie discovered for themselves the benefit of precise stocktake data. They were able to view stock turns, identify slow-moving stock, and dramatically improve their inventory efficiency. During stocktake, variances were tracked within Retail Express to accurately pinpoint where errors had occurred before quickly being able to share updated stock information with staff

Automated stock replenishment

Stock levels shouldn’t be a guessing game or a decision based on generous vendor incentives to place large bulk orders. A smart stock replenishment process is calculated based on your past sales data, lead times and optimal inventory mix for each store or channel. 

With the right cloud-based inventory management software, your stock can be automatically ordered and allocated to the stores that need it, when they need it. Not only will this match your customer demand with supply harmoniously, but it’ll go a long way in reducing manual admin time for managers.

Automated stock replenishment doesn’t mean stock will be ordered and delivered without your knowledge. An intelligent reordering process can be put in place with systems like Retail Express’ that automatically recommends reorder volumes and creates purchase orders based on data you choose to focus on, so you can review and replenish without the manual work:

Daily Run Rate

Orders that factor in the average quantity sold per day, inventory already on order, current stock transfers that are in transit and supplier lead time to automatically calculate the best quantity to reorder

Previous Sales Periods

Reorders the same quantity that was sold in a previous sales period — especially useful for seasonal products

Minimum Stock Levels

The quantity of your core inventory that you need to have on hand at all times

Slash manual task hours with auto replenishment

Automated replenishment solutions aim to cut down the many manual admin hours that so many retailers are familiar with. Arts, crafts and gifts retailer, Kaisercraft, found their Store Managers were spending significant time trying to manage stock orders for multiple locations before they implemented Retail Express’ automated stock reordering solutions. Once reordering recommendations were automated for Managers, they could shift their time to value-adding activities and customer experience.

Omnichannel capabilities that combine your inventory

The future of retail is truly one that spans from bricks to clicks. More than ever, customers are browsing in-store then buying online, or looking for in-store stock on your website to pick up in person. 

Omnichannel is a must for every retailer, but it can get confusing knowing how to truly integrate your online and offline stores for inventory that’s available where and when your customer’s need it. 

Aim for an inventory management system that can handle your expanding channels, maximise customer choice and increase sales seamlessly:

Ability to fulfil orders directly off inbound PO's

Option to place special orders from suppliers and pre-orders to deliver personalised convenience and service to customers

Provides a live ‘stock in-store’ and click & collect option online to open up your store inventory to online visitors

Easily integrates with popular eCommerce and Marketplace platforms to maximise your revenue channels while maintaining control of your stock

Leverages one single stock pool across every location and online to use your stores as fulfilment centres and give customers the widest range of options and avoid lost sales

Adapt your inventory options to shifting customer preferences

Napoleon Perdis has been renowned for providing a second-to-none customer experience, but with more customers wanting to shop both in-store and online, they needed a POS system that integrated with their eCommerce store and used one single stock pool. Using Retail Express’ Shopify integration, Napoleon Perdis started offering same-day delivery by leveraging their stores as part of their fulfilment strategy when an online order is made close to a store giving customers a consistent experience no matter how they shop

Full visibility of your vendor performance & fulfilment supply chain

Your vendors and fulfilment are the make or break for your retail business. And, for many store owners, it’s a delicate balance to maintain an agile, highly transparent relationship with your vendors and keep up your fulfilment needs.

Aim for your inventory management system to hold the capacity to balance the two easily, especially in the following areas:

Monitor vendor margin contribution and fulfilment performance to use for feedback and deal negotiations

Use one master order to centralise purchasing for all stores and to all vendor

Track container status and ETA dates to manage your cash flow and capacity planning

Keep purchase order variances in check with higher visibility over ordered and delivered stock

Track landed costs & margin impacts in your preferred currency

Add freight and duty costs into your prices for better, more accurate margins

Maintaining the right vendor & fulfilment management balance

View all outstanding orders across every store and online

Fulfil and dispatch orders in full or in parts to your customer sooner, without any operational headaches

Create special orders, arrange pickup or home delivery with just a click

Offer fast delivery for online orders using stores close to the customer with decentralised fulfilment

Directly integrate your operations with your 3PL partners

Distribute products to customers or your store with cross-docking for minimal handling or storage time

Optimise your inventory with a clear picture of your supply chain

Iconic swimwear brand, BAKU, decided to switch up their system after reviewing their stock issues, delays in stock transfers, and simply how difficult it was to get a clear picture of their supply chain. A change to a clear, easy to use inventory management system with Retail Express made all the difference to streamlining their stock and adjusting their production runs to replenish each store with the right stock amounts.

Future-proof your business with a centralised, cloud-based inventory management system with Retail Express

Ready to lower your business and admin costs and get started with a powerful retail inventory software that makes purchasing, stock control and fulfilment easy? 

Retail Express is a cloud-based solution that simplifies complex inventory management no matter where you are, or how far you expand your stores and channels.

Made by retailers, for retailers, we know that controlling your inventory starts hard and only gets harder. That’s why our retail software comes with smart inventory and data management tools that adapt to your needs and do the job for you. That way, you can focus on expanding your presence, making your customers feel valued and succeeding in your space. 

Book a personalised demo below with one of our retail experts today to see exactly how we can do it for your business.

See the status of your inventory across every store and channel in real-time

Integrate your physical stores with Shopify, Magento, WooCommerce, BigCommerce and other eCommerce platforms

Schedule special orders, track product ETAs, combine payment types and fulfilment methods all from the POS

Digitise stocktakes and eliminates hours of manual counts and double-handling of data

Automated your stock replenishment based on algorithmic formulas for an optimal inventory mix based on real customer demand

Organise home delivery, store pickup and stock transfers from any of your stores easily

Turn on Live Stock in Store and Instant Click & Collect to allow customers to see stock levels online and pick up in-store

Review real-time financial, supplier and sales reports in just a few clicks

Onboard your entire team with a fully-guided implementation by a dedicated success manager and online Australian-based phone and email support

Try Retail Express today

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Your Success Manager will help format and import your data, get you up and running, guide you with your hardware and everything else associated with setting up a new system.

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