Sales season, dead stock and decisive technology: How retailers can win the inventory battle
In an industry where brands are battling for space in the consumers psyche through constantly trying to keep up, grab attention, deliver experience and answer impatient demands, top lines have been taking a hard hit and the British weather has, as ever played its part.Its these battles that have ultimately led to strained bottom lines as many who haven’t stepped up to the technological omnichannel mark, are beginning to stand out and their sales begin to drop out.
There are lots of ways to protect that essential bottom line such as pushing for sales with clever CRM, a savvy digital strategy and that all important paid for presence on socials. But perhaps the oldest solution that is the easiest to fix with the right system in place, is that of being able to buy and produce more effectively and efficiently and therefore limit the amount of stock sitting dead in the warehouse or store room when the end of the season comes along, such as like it does this month (August).
Measurable success is usually defined by how full-price stock sold and how that amounts to the full percentage of sales for the season. Average industry standards are around 60 per cent of stock being sold at full price and the remaining 40 per cent at sale price. But when those slashed priced items don’t fly off the shelves and instead sit in a warehouse or on the shop floor or hanging around on the most clickable grids of their eCommerce site, what happens next?
It’s a problem that is costing retailers, in particular independents, huge amounts of vital cash, that needs to be freed up and ready for the next season start, or fresh talent, improved in-store experiences...the list goes on. Instead the stockroom holds the cash and the next season starts slower and more abridged. The knock-on effect can be disastrous.
A Cloud-based EPOS system, which offers a holistic view of stock, sales and demand, has a role to play in solving the problem. Neal’s Yard Remedies - one of the UK’s leading organic skincare brands recently switched to RetailStore’s platform after its team found that traditional system silos, re-ordering of products and forecasting and thus manufacturing was problematic. Add to that the fact that they didn’t use synthetic ingredients, with many orders placed 24 months in advance.
Jason Cook Head of IT said: “You can’t have fresh herbs sitting around on the shelves for months waiting for production, neither can you have product going out of date or being unsold because of a lack of stock data. That’s what was happening and that is what needed to change.We migrated to an intelligent Cloud platform from RetailStore (powered by Cybertill) which now helps us be certain we get the ingredients we need, to manufacture them and get them to the shop.”
“The whole cycle really relies on having good information, such as what your sales patterns are going to be so you can forecast what your growth is going to be. Our supplier orders are now placed based on intelligent data enabling our entire manufacturing process to become leaner. It just makes more sense.”
Addressing purchasing and becoming more ‘lean’ in the approach to inventory is key. However, without intelligent data from the likes of RetailStore, human heady predictions can be both costly and damaging - not only in terms of dead stock but caution can halt the brands full sales potential.
“For us, we've seen a worth in having all our data stored in one place, not only for stock but also for promotions and a more holistic view point when it comes to franchises, concessions, stores and the business as a whole, including mail order and e-commerce.”
The switch to Cloud was one that had a fundamental impact on the business and while it and other retailers still need an element of excess inventory to provide a level of flexibility for their consumers, the cloud has delivered a solution to the problem of out of date and wasted stock on the shelves.
“We’ve stood by watching competitors who fail to embrace this new shift in consumerism to a more multi-channel approach. Meanwhile we’ve seen the vast improvements this new ‘intelligent’ approach has brought to the business and it’s showing no signs of slowing down.
“Despite still being a relatively small skincare business, we’ve looked at what both consumers and larger competitors are doing - their behaviours and their demands and we have embraced change,” added Jason.
So as the sales season kicks into full swing this month, isn’t it time that you embraced change so that the stock room is slick and dead-stock free for when March comes about in 2018? Driving footfall into your store may be valuable over the next 6 months, but preventing piles of stock that won’t sell is more important we think. Don’t you?
by Ian Tomlinson, RetailStore