It’s October. Summer just ended. But retailers have been thinking about the holiday season long before you even left the beach.
Inventory management: the problem
Black Friday, Cyber Monday, and the rest of the holiday shopping season seem months away, but for retailers, they’re right around the corner. Early holiday preparation and proper inventory management during the holidays could make the difference of a great season and a poor one, especially since 40% of annual retail sales occur during these few months. And while it’s currently only the beginning of October, experts have already published their projects about this upcoming season’s numbers. Many retailers use these projections to help them put together their holiday planning. RetailMeNot calculated an average of $743 will be spent by each holiday shopper during Black Friday and Cyber Monday alone, a 47% increase from last year. Retail Dive says most millennials (92%) this holiday season plan to spend money in a physical store.
And on top of this, consumers are constantly demanding more from brands and retailers, as 78% of millennials would rather spend on experiences than tangible items (Eventbrite Study). They want their shopping experience, whether in-store or online, to be personalized; they want to be able to buy now wear now; they want the fastest shipping and easiest returns. And they are more budget conscious, looking for deals and preferring to purchase on-trend items rather than long-term investments (think “fast fashion”).
Inventory management: the solution
Because of this pressure from consumers, retailers must focus on how to best appeal to their market and out-compete their competitors. This starts with inventory management. As discussed in the previous blog in this Inventory Blog Series, investing in a real-time inventory management system is the solution for retailers, especially during the holidays. It can allow retailers to make themselves more attractive by focusing on upcoming trends, creating simple shipping/return policies, and implementing loyalty programs. The ability to view stock levels as well as product and shipment locations in real-time is an advantage that hasn’t always been available for retailers, and it is one that needs to be put to use.
Inventory management systems allow retailers to view stock levels as well as product and shipment locations in real-time - an advantage that hasn’t always been available for retailers, and one that needs to be put to use. Nikki Baird, managing partner at RSR Research, told Sourcing Journal: “Retailers have been investing a lot more into inventory visibility and more around locating items in store for e-commerce purchases. It gives them more flexibility and takes the pressure off because they don’t have to do as well at making the right guesses about how to allocate stock. They just need to be able to find it and grab it.”
The more visibility brands and retailers have have, the less they need to “guesstimate”. Real-time inventory management allows retailers to take immediate action rather than to be reactive to purchasing trends later on in the season when it is too late to optimize their inventory. Real-time knowledge gives better control over how much inventory they need, what shoppers will be buying, and when they will begin shopping, allowing for better accuracy when planning their inventory. And it also allows retailers to address consumer-facing issues, providing their customers with what they want. For example, retailers are able to limit sold-out items because they can restock fast-moving product sooner, creating more happy customers and ultimately leading to better sales. In short, an inventory management system helps brands stay on top of their stock and maximize profits.
Happy customer, happy retailers, happy holidays. That’s the goal of the season, and while the pressure is on, there are ways retailers can stay ahead of the game and “win” the holidays. By using real-time inventory management systems and focusing on consumer-facing issues, retailers are eligible to come out successful and have a great start to 2018.