Online shopping has changed the way we buy products – no doubt about it. It has also made inventory management a far bigger challenge for most modern retailers.
And that’s because many modern consumers expect to get their product on the same day, especially when they’re visiting a physical store.
You can safely “blame” this on Amazon. With an Amazon Prime account, a customer can make a purchase, and have the product delivered to their home in one or two days. And no, not business days – days. For instance, if you buy something on Friday, you can have it in your hands by Saturday morning. Often, customers can even have a product delivered to them on the same day.
You might wonder – if that’s how online shopping works now, how can midsized retailers even stand a chance? Well, you’d have to make a few big adjustments to your inventory management to ensure you can fulfill customer expectations as effectively as Amazon.
Here are some of the biggest ones:
- Keep the Right Items in Stock
Make sure you have enough items in stock to accommodate the demand. As basic as this may sound, it’s not always easy.
Here are a few things you can do to make sure you have enough product on hand:
- Set min/max levels. Set up the minimum amount of product you need to have at all times to meet customer demand. That way, when your inventory stock dips below it, you’ll know it’s time to order. You should also set maximum levels to ensure you never exceed the demand and save some space in your warehouse.
While this will require some research beforehand, along with continuous re-evaluation, you’ll be able to satisfy more customers, and in turn, make more money.
- Plan for the worst. You need to become good at anticipating problems that may affect your inventory down the road, including unexpected sales spikes, cashflow shortfalls, warehouse space shortage and suddenly-discontinued products.
Whether you like it or not, any of these issues can and will affect your store chain at one point or another. So, it’s much better to be ready for them instead of scrambling to fix them when they occur.
- Make accurate predictions. Forecasting the future is one of the toughest things you can do, particularly when it comes to inventory. Nevertheless, it’s something all retailers need to do if they want to have the right product at the right time.
When predicting your future sales, be sure to account for the latest trends in the market, previous year’s sales for each week, guaranteed sales from regulars, seasonality and the overall economy.
- Make Sure Your Inventory Matches Your Marketing Efforts
No matter how hard you try, being out of stock is inevitable, especially if the item is not a popular seller. In this case, make sure your customers don’t walk into any of your stores expecting the item to be in stock. That will likely just infuriate them and drive them straight back to Amazon.
How do customers get this “crazy” idea that you have the right product on hand? Your marketing. If you have a flyer advertising an out-of-stock product, phase it out. If your website lists items that are out of stock without labelling them as “out of stock,” change that. If you have online ads showcasing the products you currently don’t have, fix them.
You get the point. Don’t mislead your customers into thinking you have what you don’t actually have, even if you can order it for them when they enter the store. It comes off as disingenuous, and customers hate that.
- Deliver Your Products Faster
All right, so what if – despite your best efforts – you do end up with a customer that wants something you don’t have? Tell them that you’ll order the item for them and have it delivered either to the store or the customer’s door.
An online-savvy customer (hint: most of them) may still not like the idea. They may want the item either on the spot, or at the most, on the next day. If you can’t accommodate that, you risk losing the customer to Amazon. Why? Because Amazon provides same-day deliveries.
One way of offering same-day deliveries is by relying on crowdsourced shipping, which is a method of fulfillment that involves networks of local, non-professional couriers to deliver packages to customers’ homes. The benefit of this method is that you can get items to customers in a matter of hours at a relatively low cost.
So, look around – the options to make quick deliveries work are all around you. After all, Amazon is already doing it.
- Streamline Product Returns
Make returning a product easier. Depending on how many locations you have, going to your store physically may not always be the easy option.
So, if you already sell your products online in some fashion, make sure your customer can return your products by mail instead of just dropping them off in person.
This is yet another process Amazon has made easier. Back in the day (but not too long ago), customers had to print their own return shipping labels and pay for return shipping with their own money. Not anymore, and not with Amazon. Now you get a printable return shipping label, and along with it, free return shipping.
You need to offer the same, if you don’t intend to rub your customers the wrong way – especially since returning a product is already a somewhat unpleasant process.
Okay… I Want Better Inventory Management, But How?
After reading all of the above, you might be nodding your head and thinking, “Yes, I do need to improve my inventory management.” However, you might also be thinking, “But, what’s suggested here is not feasible.”
The latter is only true if you don’t have the necessary tools. Luckily, Magstar Total Retail offers those tools to midsized retailers. So, if you’d like to see how they work, Steven Greenwood, Magstar President, can show you. Book a Chat with Him Right Now!
