Amazon recently announced a new one-hour delivery service for its Prime Members in the UK, which will deliver a selection of over ten thousand items, from coffee and batteries, to diapers and sports equipment. This faster than fast delivery option is being offered to a number of select companies in London, but it will roll out to additional UK cities by the end of the year.
One-hour delivery. Think about it.
The world of retail feels as if it’s moving at the speed of light, because it is. The on-demand culture has customers expecting products quicker, and that demand will only continue to grow. Keeping up with the quickly evolving retail customer experience means having smart and savvy control over your stock to ensure you can meet demands.
Ensuring Your Inventory is Accurate
Retailers just starting out and even those that have been in a business for a period of time still ask, “What is inventory management?" and "What is involved in effectively tracking each product through the sales cycle?” So let’s start from ground zero.
The first step towards effective inventory management is developing a process and procedure to keep accurate stock levels, always and in real time.
How and where do you start?
The physical counting of stock, or what’s known as stock takes, are traditionally performed at the end of each calendar year. If you’re not completely sure that what sits in your warehouse equals what’s in your retail system, it’s the best place to start when correcting discrepancies, no matter what time of the year.
This is also a great opportunity to confirm that all your product is in selling condition, removing any damaged product from your inventory numbers. With the correct numbers in hand, you’ve got a fresh and accurate starting point.
If you’re one of the many retailers who started out managing their inventory with spreadsheets or hard-copy lists, you’re not alone. However, as your business increases, these processes can’t keep up with the speed of retail. You need all your channels to talk to each other in real time. When product is sold, returned, or you receive new product from suppliers, a retail management system updates inventory for each channel simultaneously; be it your physical shop, ecommerce store, eBay or Amazon marketplace.
Prompt Inventory Management:
Speaking of returns and supplier receipts, it’s critical that you have a strict procedure in place for your staff to follow. The sooner you get returned products back into your sales channel, or receive and enter in new products into your retail system, the quicker they can go out to a new customer. Handling these inventory tasks promptly will keep them from piling up and throwing off your stock numbers.
The Benefits of Accurate Inventory Management
The first and most obvious reason for accurate inventory tracking is to prevent a stock-out, or a missed sale, and to best deliver that quality retail customer experience. Competition is fierce, and when a potential customer leaves your ecommerce store or shop because you don’t have what they want, it can be hard to get them back.
Other reasons include:
Data reporting - you rely on cost accounting, cost of goods sold and balance sheet reports to effectively run your business. If the numbers are off, management decisions could also be off.
Reordering - when you’re working with correct stock numbers and levels hit a pre-determined threshold, a new purchase order can be triggered to replenish inventory and keep sales humming.
Reducing theft - the stealing of inventory by staff has been an on-going problem in retail. However, if your employees know you run a tight inventory ship, where missing product is quickly detected, they may be less likely to steal. If product goes missing due to customer theft, it’s discovered promptly and actions can be taken to prevent another occurrence and report it to the authorities.
Gartner predicts that by 2018, more than 50 percent of organizations will implement significant business model changes to improve the retail customer experience. Management of inventory effectively and in real time is one of the most important ways to ensure customer satisfaction and support your retail company’s success.
To learn more, download our free white paper, "10 Reasons Accurate Inventory Tracking Matters".