Bricks and mortar retailing across the world continues to face challenging times. The UK witnessed around 8000 store closures last year, with more than 9000 in the US, creating some of the toughest global trading conditions in modern history.
With 2020 set to be equally challenging, as both margins and customer loyalty come under increasing pressure, retailers are leaving no stone unturned in their quest for market share. Many are looking to optimize sales across the majority of categories in order to offset lower margin products and loss leaders, while enhancing the customer experience.
Managing complex categories
However not all categories are as easy to optimize as others. More complex ones such as DVDs, music and books require different processes and systems in order to meet margin expectations.
A new film or video game release for example, will typically see a vast spike in sales which diminishes over a certain time period, while a music album might see a huge resurgence in the event of the artist’s death as seen with the likes of Prince and Michael Jackson. This inherent volatility presents a number of challenges and for many retailers, a lack of effective systems is impeding potential profit.
While the majority of supermarket retailers have robust inventory management systems, not all personnel tasked with merchandising or replenishment on the shop floor have access to these. This leaves merchandisers and other third party service providers having to rely on paper records to track stock availability, or in some cases, a physical search of the warehouse for boxes to locate a product which might be out of stock, as this insight simply isn’t easily available. Clearly this is inefficient, poses potential for errors and increases the risk of lost sales.
360 degree vision
Forward looking retailers are addressing this challenge through the deployment of advanced mobile inventory management capabilities which not only bring inventory management to the shop floor to allow staff to check stock levels, but allow stock adjustments to be made on the shop floor in real time. In order to encourage adoption and promote best practice, these capabilities must be flexible enough to be deployed on existing devices, whether those are store-specific, Android-based or on an iPhone or iPad, rather than requiring additional expensive hardware.
Using either barcode or photo recognition, mobile inventory management capabilities can identify gaps on the shop floor, and look up whether stock is in the warehouse or in transit at a given time, as well as ensuring display layout compliance. It also provides shop staff or merchandisers with the agility to react to trends quickly. For example, if a new film release has received a lot of good reviews, they can elevate its position, confident that the stock is available. Similarly, it minimizes the cost burden of excess stock and the associated processes of discounting or returning products.
These mobile capabilities also facilitate more informed conversations between store managers and merchandisers, and offer the ability to evaluate the sales performance of a store relative to another in the region. When discussing displays, specific products can be evaluated without the need for numerous trips to the stock room to ascertain whether the stock exists to support a particular format or promotion.
Winning the race for market share
As retail conditions continue to be turbulent, and the race for market share shows no signs of abating, few can afford to lose out to a competitor because of outdated inventory management processes or systems. Modern mobile capabilities on the shop floor not only allow retailers to build better customer relationships and instill loyalty, but maximize profitability of the product categories they support.
For more information on how Avolin can help bring inventory management to your shop floor, please contact [email protected].