Inventory Management is the most significant procedure to master in the retail industry. One must strike a balance between maintaining sufficient inventory of popular items to fulfil client demand without experiencing stockouts and reducing inventory of obsolete products to avoid excessive stock.
Both instances can easily lead to unnecessary losses for your retail firm and should be avoided if at all feasible, or immediately rectified if not.
As a result, good inventory and stock management should be regarded as a great responsibility.
The Significance of Inventory Management for Retail Businesses
Inventory Management enhancement is essential for retail businesses.
Reduces Stockouts of Popular Products
As said earlier, in order to prevent upsetting clients and missing out on sales, a retail firm should avoid running out of stock for its items.
It is not just about being unable to complete a sale due to a shortage of inventory at present; if your retail firm develops a reputation for being frequently out-of-stock for popular items, it could have a detrimental influence on client growth.
An inventory management tool helps in preventing these problems and provides instantaneous information on the sales transactions and present stock of products.
Not only would such a tool assist you in determining the appropriate level of stock to keep on hand in your inventory, but it would also enable you to respond rapidly to diminishing stocks through restocking the product, shifting the stock from one retail location to another, or even drop shipping the product to customers who were unable to obtain one when they visited your retail locations.
Avoid Excess Stock of Expired or Outdated Products
Failing to handle your inventory will result in the expiry of perishable products before you can sell them. This is also true for non-perishable goods, which can go out of style and become outdated as customer tastes change and technology develops.
In both circumstances, your retail firm risks losing income due to an excess supply of unsellable items in its inventory, as well as further losses due to expiration and a lack of shelf space for more profitable alternatives.
Using an appropriate inventory management feature helps your business realize how much stock of each product it has in stock at the moment. It can also assist you in finding out which goods you should refill on a regular basis and which you should reduce when demand drops.
This also prevents you from wasting shelf space on items that are not selling, saving you money on storage and transportation.
Enhance Omnichannel Order Fulfilment
Many retail organizations, including yours, have realized that adopting an omnichannel strategy is vital, especially after the COVID-19 outbreak.
You will need to ensure that your retail firm stores enough items for all of your retail channels as your consumers become accustomed to a smooth customer experience across your brick-and-mortar retail locations and your e-Commerce sites.
However, moving to omnichannel has made it more difficult to confirm that your customers have enough stock because you must now monitor inventory counts across various channels.
This could increase shrinkage - the loss of inventory due to different reasons, but most commonly due to errors in human data entry resulting in erroneous records, counts, and misplaced products in your retail business.
With an inventory management platform, you will have complete insight into your inventory across all of your retail channels. Not only will you be able to have enough inventory on hand to fulfil client demands, but your retail organization will also be able to transfer products across channels.
This would allow your company to fulfil consumer orders for your items regardless of the retail channel they choose to trade with you.
How does ERP Software Help Manage your Inventory?
ERP software with an inventory management function has long been a top choice among retail firms. Since it provides various features that fulfil inventory requirements, including but not limited to the following:
Forecasting, Restocking and Managing Excess Inventory
ERP software can assist you predict inventory changes according to demand and when to replenish certain goods. It achieves this through tracking real-time data points like sales, purchases, and logistics. It connects with your other business systems to unify all retail activities and consolidate all process data into a single source of truth.
As your sales and supply chain operations affect your inventory in real-time, you can track the changes in real-time and be confident in the accuracy of the data. You may configure automated notifications for particular scenarios, such as when inventory levels fall below a certain point. These will remind you to refill the items at the correct moment, especially if you are busy with other retail tasks.
Automation of Inventory Updates
An ERP system enables you to spot overstocks and stop reordering obsolete products in a timely manner. It automates your business's inventory management, reducing human errors and the need to do it manually with spreadsheets. An ERP software's inventory management module also displays information about your inventory in dashboards that are updated in real-time. Not only does this improve your inventory visibility, but it also allows you to respond quickly to any emerging issues with your product stock.
You can always guarantee that the stock is accessible for your consumers with ERP software, regardless of which of your retail channels they use. You receive a centralized inventory database that is updated in real-time because of its inventory management module. This allows you to keep track of your current inventory levels, knowing that the statistics on the dashboards accurately reflect the number of goods currently on your shelves or in storage.
This is especially useful if you have to manage inventory across several retail channels, such as if your company has both a physical store and an online store. You will be able to identify and respond quickly if inventory of a product starts to run short in one or the other, such as by transferring inventory from one to the other or vice versa. This allows you to ensure that stock is always available on your retail channels, boosting the customer experience for your consumers on any of them.
ERP Software Optimizes Inventory Management in Retail Businesses
NetSuite, a cloud-based ERP software, is the best choice for streamlining your retail inventory management process. Because you can use the built-in inventory management module in ERP software to maintain inventory levels and avoid stockouts of your most popular products and excess inventory of expired or obsolescent products through notifications, and use inventory tracking to maintain stock levels across all of your retail channels.
If you would like to know more about the NetSuite ERP software for enhancing your retail business, get in touch with Jobin and Jismi.