Retail inventory management can be challenging for retailers operating a network of locations and online marketplaces. With several warehouses and stock locations to keep track of, inventory control could spiral into chaos without the right set of tools and processes. Retailers have been at the forefront of adopting new technologies and finding effective ways to provide their customers with the best shopping experiences. Retailers often underestimate the importance of accurate inventory control, leading to stockouts and cashflow issues.
What is Retail Inventory Control?
Retail inventory control is tracking stock levels across sales channels and warehouses. Inventory control gives a comprehensive overview of your inventory, including your products and where you can find them in your warehouse. It also involves tracking stock movements to identify slow-moving products and products running low on stock so that businesses can optimize their inventory performance and maximize revenue.
Challenges of Retail Inventory Control
Today, retailers can maximize their reach and grow their revenue by offering their products on online marketplaces and eCommerce websites. Opening new sales avenues for your products can help grow your revenue, but it can also expose your business to several inventory control challenges.
#1 Optimizing Warehouse Space
An efficient warehouse is crucial for minimizing lead time, improving fulfillment accuracy, and minimizing product returns. How you organize and manage your warehouse space has a significant impact on efficiency. Planning your warehouse space to maximize efficiency and adapt to the ebb and flow of consumer demand can prove to be highly challenging. Having inadequate buffer zones at bin locations to deal with an upsurge in demand could lead to workers storing products in underutilized bin locations. On the other hand, an unoptimized warehouse design could significantly increase travel times and picking efficiency.
#2 Delivering Consistent Shopping Experiences
Today, retailers can maximize their reach and grow their revenue by offering their products on online marketplaces and eCommerce websites. With the growing popularity of Omnichannel commerce, consumers expect seamless and consistent shopping experiences across multiple sales channels. Delivering such a shopping experience requires retailers to use advanced systems capable of managing orders and inventory across various sales channels.
#3 Carrying the Right Amount of Inventory
Striking the right balance between having sufficient quantities on hand to meet consumer demand and not having excess inventory can be challenging for most retailers. If your products are seasonal or have highly varying lead times, it can be challenging to forecast inventory needs accurately. Avoiding potential stockouts and overstocking is critical to improving your bottom line, but achieving it requires thorough inventory planning based on accurate demand forecasting. The vast majority of retailers often lack the tools and knowledge to plan their inventory and therefore have too much or too little stock on hand.
Solutions for Retail Inventory Control
#1 Use Real-time Inventory Management System
Managing inventory across multiple locations and sales channels using spreadsheets or legacy systems is time-consuming and prone to human errors. When left unchecked, Inventory errors can impact your bottom line and lead to dissatisfied customers. Real-time inventory management systems can automate inventory control, improve accuracy and give you up-to-date information on stock levels.
#2 Use Minimum Stock Rules and Safety Stock
Defining minimum stock levels and carrying sufficient safety stock is critical to avoiding stockouts. We all know that stockouts can lead to dissatisfied customers and lost business. Relying on your instincts to decide on safety stock levels and reordering points can cause more harm than good. Having too much safety stock means tying up capital unnecessarily, whereas having too little could have you staring at a potential stock out. Ideally, it would be best to have enough safety stock in your inventory to meet the demand while waiting for replenishment.
#3 Optimize your Warehouse for Efficiency
We’ve discussed the challenges of managing your warehouse space as a retailer. Here are some strategies to improve warehouse efficiency and optimize space usage:
Rack slotting significantly improves picking accuracy and picking time while reducing travel time.
Creating hot zones dedicated to high-velocity items can minimize travel time and improve picking efficiency.
Optimize your warehouse layout to suit our picking strategy and picking equipment.
Read: 5 Proven ways to improve warehouse efficiency
#4 Forecast Demand Accurately
Making purchase decisions based on accurate forecast data is critical to your retail business. Analyzing sales trends and using proven statistical models to predict demand is key to improving forecast accuracy. However, retailers often lack the tools and resources to predict future demand with a reasonable amount of certainty. Today, AI and Machine learning are helping even small retailers plan and optimize their inventory based on sales history without employing additional resources.
#5 Use Automation
Modern retailers sell their products on various channels, including their eCommerce websites and popular marketplaces like Amazon, Etsy, and eBay. With retailers adopting multi-channel sales strategies, the need for inventory automation is more apparent than ever before. Manually managing inventory and orders across sales channels is inaccurate and inefficient. Multi-channel inventory management systems can automatically track inventory across multiple sales channels and dramatically simplify catalog management.
Use AccelGrid for Retail Inventory Control
AccelGrid is the right inventory management system for retailers looking to optimize their inventory and increase efficiency. AccelGrid helps you automate mundane inventory management tasks and lets you focus on growing your business. From tracking inventory across multiple warehouses and online sales channels to automating fulfillment and shipping, AccelGrid can optimize your retail inventory and improve profitability. Start your 14-day free trial today or get in touch with us to learn more about our product.
