Owning a retail business can have some pretty handsome prospects in the contemporary world we reside in. Gone are the days when retail businesses ran traditionally without the support of modern technological developments that have paved the way for retailers to better understand and cater to customer needs and requirements. One of the essential tools for retailers today to run a successful business is an Inventory Management System that empowers them to run their business seamlessly.
Today’s companies with premier inventory management procedures don't guess how much stock to buy. They keep a steady flow of raw materials, work-in-progress items, and finished goods that move from the manufacturer to customers through various distribution channels.
What is Inventory Management?
Inventory management is a process of hoarding and selling, obtaining, or using the four major types of inventories: raw materials, works in progress (WIP), finished goods and maintenance, repair and operations (MRO) stock.
Generally, all inventory-intensive industries, such as manufacturing, retail, and foodservice must avoid investing more funds than necessary in inventory, while minimising waste and shrinkage with the help of inventory models.
Inventory Management Trends in the Indian Retail Industry
Staying abreast of the latest trends in inventory management is essential irrespective of which business it is. Here are the top retail industry trends that are focused on helping companies make better use of data and are also showing them a roadmap to growth:
- AGVs and AMRs: Customers demand swift deliveries, so businesses are increasingly looking for efficient ways to deliver. Automated Guided Vehicles (AGVs) and Automated Mobile Robots (AMRs) are tools that support warehouse operators in their collection of products from decks and pallets. While AGVs have been around for a while, AMRs are new on the block.
- Artificial Intelligence: When it comes to warehouses and inventory management, systems with artificial intelligence (AI) and machine learning (ML) capabilities work together with IIoT initiatives. Artificial Intelligence can help spot defective products or packaging so that customers only receive the best quality items.
- Cloud-Based Solutions: The power to track inventory in real-time can be a game-changer for any business. Since cloud-based solutions allow secure storage and access to all company data, from anywhere, decision-makers can quickly respond and solve inventory issues. Cloud, like Software as a Service(SaaS), delivers other benefits over on-premises applications. Lower upfront costs are enjoyed, since there's no hardware to buy and implementation is faster, with consistently updated software, resilience, and better security than most organisations can build on their own.
- Success Strategies for Trend Adoption: Which trends are ideal for your business? That depends on your company's budget, strategic objectives, size and appetite for technology. Make sure to consider these points when evaluating a trend. Weigh the benefit/cost against other long & short-term projects on the table and ensure an executive sponsor can define the plan's success.
- Creative Financing: Using creative financing to pay for inventory can deliver a competitive edge, primarily for new manufacturers. On the other hand, think about sites like Kick starter that enable ’pre-tail’ sales, where a manufacturer can rack up retail revenue before the product gets produced. These sales can fund purchases of manufacturing capacity and raw materials.
- Auto-Replenishment Strategy: Constantly monitor stocks, sales and demands with an automated replenishment strategy. Not owning such a strategy can result in human errors, such as missing out on essential orders. An approach like this also addresses changes in demands and tweaks replenishment orders accordingly. As a result, increased service levels and sales can maximise customer satisfaction, by catering to demands on time.
Types of Inventory Reports
To stay at the top of your game, you must ensure that your product assortments are relevant and innovative. The first step to doing this is efficiently tracking your inventory with the following types of reports:
- Inventory On Hand - This report should show how many product units you have in each store and the current stock value. This information indicates how much capital you have in your inventory, which can further help you in your financial plans and forecasts.
- Low Stock - Being out of stock of a product is a non-negotiable affair in the retail world. It leads to lost sales, reduces customer satisfaction and redirects loyal customers to competitors. An efficient stock report will inform you about which items are low in stock. To achieve the best results, ensure that you're notified when your stock levels reach a certain point so that you can replenish as necessary.
- Product Performance Report - Which products are making the most money? How fast are items selling? Your Product Performance Report can't exhibit how much merchandise you've sold over a given period, as well as a summary of items sold per week or per month. Utilise this Product Performance Report to determine which items are worth investing in and which items shouldn't be re-ordered.
- Benchmark comparisons - The best comparison you can make is a comparison against yourself. With time, you'll be able to set up benchmarks in your data, so you can monitor whether you're meeting those inventory standards or not, leading to progress.
How Retail Reports Help in Generating More Sales
In achieving retail success, sales are critical, which is why you always need a clear idea of how much money is coming into your business. Here are a few types of retail sales reports that can provide the best insights:
- Sales Summary: It provides a large-scale view of your retail sales by giving an overview of your last month's sales or comparing your year-to-date sales to that of the previous year. These numbers offer some general insights into the advancement of your business and they can help you make medium to long-term decisions.
- Sales Report Per Product and Type: This report makes it convenient to identify your best (and worst) selling products, so that you can determine the right course of action. For instance, when a particular product is selling well, you could consider ordering an additional amount of it and vice versa.
- Sales Report Per Customer: This will enable you to identify your VIP customers and those who aren't fully engaging with your brand, so that you can tailor your marketing and communication strategies accordingly.
- Sell-Through Report: A sell-through is defined as a percentage of units sold versus the number of units available for sale. It is a retail metric that tells you how fast an item is selling. Some reporting platforms may have the sell-through metric as a separate report, though other solutions can have this under Product Performance.
Taking Inspirations from top retailers
- Choppies, the African retail giant, discovered a team with a matching spirit, with Intellect Commerce. Intellect Commerce supported the building of customised capabilities in the software solution iRetail Suite, which offers productive benefits to Choppies.
- Future Group - after a careful study and analysis, the Indian conglomerate found Intellect's iRetail to be the best fit by accomplishing 100% stock visibility at the Point-of-Sale and rationalisation of workflows with a single implementation of solutions across the brands.
To know and experience more for your retail business, Book a demo for iRetail Suite today!