How to Get Better at Retail Inventory Control
If you want your retail business to make big moves, you’ve got to start focusing on retail inventory control. On this page, we dive into everything about it – so keep reading to find out more!
How to Get Better at Retail Inventory Control
If you want your retail business to make big moves, you’ve got to start focusing on retail inventory control. On this page, we dive into everything about it – so keep reading to find out more!
Running a retail business can be stressful for a lot of reasons; but none of them can take as much of a toll on you as having to streamline and manage your inventory. Even the biggest contenders in the retail game will tell you that getting their inventory right is one of the biggest challenges they face, and just a slight error in one of your stock-related processes can cause your whole retail strategy to crumble down.
To stop that from happening, you need to start focusing on your retail inventory control set up. This is mainly because the more evolved your retail inventory control framework is, the smarter decisions you can make for your inventory and the better you can do as a business.
Contents:
- What is Retail Inventory Control?
- Why You Should Focus on Retail Inventory Control
- Achieving Perfect Retail Inventory Control: Why is it Hard?
- 8 Retail Inventory Control Tips
- Conclusion
What is Retail Inventory Control?
Retail inventory control, as the name itself suggests, the process that allows you to improve and adjust the state of your inventory in accordance with your retail practice. As a process, it revolves around making sure that you don’t have too little or too much inventory; and are working with the right levels all along.
Retail inventory control is an integral part of any successful retail setup – it doesn’t matter if you run physical stores or an eCommerce shop, this process is an important part of your journey and hence, deserves due attention.
Why You Should Focus on Retail Inventory Control
So, we’re sure that at this point, you understand that you should focus on retail inventory control.
If you are confused about why you should focus on retail inventory control, here are a few reasons that will give you a better idea:
Helps you implement better quality control
Your success as a retailer is more or less dependent upon the quality of your goods and services. As such, your top priority should be to improve your quality and make sure that your customers are getting nothing but the best out of their transaction with you.
When you focus on retail inventory control, you get to do that. It gives you a better grasp on all aspects of your fulfilment experience, which puts you in a considerably better position to make decisions that will improve the quality of your products and services. This is something all businesses want to achieve, the key to it is none other than retail inventory control.
Enables you to maintain the right stock levels
As a retailer, you need to ensure that your inventory is operating with the right stock levels. You can simply not afford to overstock or under stock, as this will definitely take a toll on the way you process orders and sales.
Without effective retail inventory control, it would be impossible for you to maintain the right stock levels. This is because this particular aspect requires full visibility and insight, which you can only get with the help of effective retail inventory control mechanisms. If you have them, it becomes considerably easier to stay updated on your stock levels and make sure you never run out of the products your customers want.
Streamlines your inventory accounting functions
For a retail business, inventory makes a huge part of the spending. So, a major job for the accounting department of a retail business is to supervise inventory costs. However, without having the right insights and data available, accounting for inventory would simply be a shot in the dark.
On the other hand, with the help of retail inventory control, you can get just the right overview of your inventory activity and as such, use it to streamline all your accounting functions and allow them to be more accurately attuned to the ongoing retail activity.
Helps you enhance your customer experience
There is nothing a retailer wants more than to be on the good side of their customers. The customer experience is an important factor of your success, and if you can’t make your customers happy then you are surely doing something wrong.
A strong retail inventory control foundation means a better, enhanced shopping experience for your customers. When their order processing is seamless, error-free, they will obviously start resonating with your brand a lot better, which will allow them to be on your good side and vouch for your products and services. This, in turn, will help you grow exponentially, without any restrictions.
Reduces dead stock
Dead stock is stock that doesn’t sell and instead, remains on warehouse shelves simply forgotten and unused. While on the first glance, this kind of stock seems innocent, it can turn into a huge problem for your warehouse! Because the stock doesn’t sell, it doesn’t bring in money. Instead, it sits in the warehouse, takes up space, and may even result in driving up your overhead costs!
If you have a strengthened retail inventory control strategy, it means that you can implement better, more evolved tactics that will help you get the dead stock problem under control; and that too simply effortlessly.
Start Your Demo Now
Enter your details to book a demo of the Canary7 WMS.
Achieving Perfect Retail Inventory Control: Why is it Hard?
Retail inventory control sounds like the magic solution to all our retail problems, right?
Well, the catch is that it is not always easy to perfect. There are quite a few challenges involved in the setting up of a retail inventory control framework – including the following:
Challenge 1: Requires seamless supply chain functioning
Perfect retail inventory control can only be achieved if your supply chain is functioning seamlessly. As you probably already know, the supply chain is an extremely intricate experience that entails hundreds of processes. Ensuring that all of these processes are executed seamlessly can often be a tough nut to crack – especially considering that there are so many factors outside of your control that can take a toll on the overall efficiency and productivity of your supply chain processes.
However, to make sure that you are not going wrong with your inventory control, you need to strengthen your supply chain, which is something most businesses seem to struggle with.
Challenge 2: Is contingent on effective warehouse space management
Although inventory control will help you improve your warehouse space layout and management in the long run, you need to already have something going in that department before you kick start your retail inventory control efforts.
Yet, this proves to be hard for businesses to achieve. Many retailers fail to organise their inventory and warehouse properly, which results in a lot of complications for their strategies. Because of this, it becomes hard for them to introduce inventory control as well, as starting from scratch is bound to be an overwhelming affair.
Challenge 3: Has to be aligned with customer demand and preferences
As a retailer, you probably already know that your retail activity has to be aligned with customer demand and preferences. However, did you know that your inventory activity has to be aligned with customer demand and preferences as well?
Inventory control becomes hard for many businesses to implement as it means having to respond to customer demands and preferences at all time – and given the pace at which these two elements fluctuate, change, and evolve, it makes sense why exactly this proves to be such a significant challenge for retailers.
Challenge 4: Requires smooth communication between all departments
Inventory control is a process that deals primarily with the inventory. However, to implement it seamlessly, you need to strengthen other departments of your business as well. For example, for better inventory control, you also need better warehouse management, labour management, and order management.
Needless to say, this can often be very overwhelming for retailers. Many may not even have the resources required to achieve the right efficiency and balance between all these departments, and hence this is one of the elements that makes it very hard for businesses to implement retail inventory control.
Challenge 5: Makes it hard to focus on dealing with competition
Inventory control is great, but at times it may require a lot of attention from you. Obviously, this means that other aspects of your business do not get the focus they require. This is particularly problematic when it comes to the question of dealing with competition.
When you want to deal with competition in an effective way, you have to put in a lot of time and effort. If inventory control takes up this time and effort, you will certainly not be able to strategise and deal with your competition effectively – and for many businesses, this is why they are afraid to start giving inventory control the attention it actually requires.
Challenge 6: Comes with the obsolete inventory problem
Inventory control will make it easier for you to deal with obsolete and dead stock. However, the problem is that it cannot help you avoid obsolete stock completely. This is because whether or not a product is considered obsolete depends on external factors, and there’s not much you can do.
Because it doesn’t help you completely avoid the obsolete inventory problem, many businesses doubt the effectiveness of retail inventory control as a whole – and that’s why they hesitate from implementing it. Also, given the speed at which products go in and out of trend, you will really have to be on your toes with retail inventory control throughout to make sure it is in line with the demands, which a lot of businesses rightly find a little daunting and high maintenance.
8 Retail Inventory Control Tips
Did the aforementioned challenges scare you? Are you still wondering how to control inventory in retail stores?
Don’t be!
Here are a few retail inventory control tips that you can employ to make the most out of your inventory control strategy and make sure that your efforts actually result in unmitigated success.
Remember, not all of these might be for you but nonetheless, they are all worth taking a look into.
Work around established KPIs
Our first tip for you is to establish some KPIs, and then work around those. KPIs i.e. key performance indicators enable you to measure your progress over a specific time period, in an effort to make you meet certain goals more efficiently. When you set KPIs in the area of inventory control, you will have a much clearer guide in terms of what it is that you exactly need to do to make your inventory better.
Not only do KPIs help you make smarter decisions for your inventory, they also provide you with the insights needed to make other areas of your business better as well.
Employ the ABC analysis method
The ABC analysis method is a popular inventory control technique that helps you manage all your stock a lot better. It works by splitting your inventory into three categories: A (high priority stock), B (average priority stock), and C (low priority stock).
In accordance with this, you know how to deal with each category and make the best decisions for your inventory overall. This method will also help you organise your inventory accordingly, and make sure that you are not working with haphazard, disorganised stock – which can of course cause a lot of problems.
Duly maintain record stock receipts
One of the best ways you can make sure that you are making the right decisions for your inventory is to have a clear record of all your stocks. You can do this by maintaining record stock receipts. Having these available for you whenever you like will give you a much better insight into your inventory.
This is also a great way to indulge with your progress in this particular area – having a record of all the relevant numbers will show you what your strengths and weakness are, and then you can make some adjustments accordingly.
Focus on supplier relationships
Successful retail work is also successful teamwork between you and your suppliers! After all, without your suppliers, you can’t create the fulfilment experience you want to create. Therefore, you need to start focusing on your relationship with your suppliers.
There needs to be clear communication between you and your suppliers in order for it to work out long-term. You also need to set clear expectations so that your suppliers can know exactly what it is that they need in order for you to actually be successful and on the right track. The better your relationship with your suppliers is, the easier it is for your business to evolve and bloom.
Be mindful of your minimum stock threshold
As you already know, maintaining the right inventory levels is imperative for a successful retail inventory experience. However, this can only be done if you know your limits properly.
By this, we mean that you should know what is the absolute minimum you can go to before you need to get your stock back for seamless order processing. Calculating your reorder point can help you with this, and will make it easier for you to stocked up on your inventory at all times.
Manage residual inventory effectively
Figuring out how to control inventory in retail stores is not an easy job at all. On top of it, when the problem of managing residual inventory is added to the picture, it becomes even harder for retailers to strike the right balance and make sure that they are not making any errors that may have an adverse impact on your business.
However, with the help of the right tools and technology, you can manage residual inventory effectively and that is what you need to do in order to get your retail inventory control on point.
Get a retail inventory control software
A retail inventory control software is absolutely crucial to your inventory control strategy. Because this software system is designed specifically to help you deal with the unique challenges you face in the inventory control areas as a retailer, it can greatly help you cut back on the costs, time, and effort spent on streamlining inventory control for your stock.
If you choose a software like Canary7 that aligns perfectly with all your activity and is agile, you can even grow as a business and break into bigger markets with wider audiences. A good retail inventory control software, therefore, is the perfect partner in success you need.
Conclusion
So, if to date, you were wondering why you need a retail inventory control software, you now know the answer. Retail inventory control is an important aspect to your success as a retail business. It brings many benefits to the table and makes it easier for you to not only deal with your stock but also impress your customers. However, implementing it can be a hard job and there are many businesses out there that are still struggling with it!
However, yours doesn’t have to be one of them. A retail inventory control software can help you implement some best industry practices, which will allow you to not only streamline inventory control and stock handling, but also grow as a business without any restrictions whatsoever.
So, stop waiting, and get your hands on Canary7’s retail inventory control solutions today!