Success in the retail space boils down to one simple function: the conversion of sales. However, retailers can only do this if they have stock readily available. Missing a sales opportunity due to poor stock management just won’t cut it in today’s marketplace. How can we resolve this basic problem once and for all?
Real-time or no time
For many years, retailers have focused on item availability on the shelf in-store, and in the process they've lost the ability to perform stock measurement outside the store. Since most customers start their shopping journey online, it’s a major oversight. In a connected market where stores are easily accessible 24/7 via anything from a phone to a smart watch, availability and visibility of stock for customers is crucial. Especially as the demand to receive items can quickly intensify.
However, research suggests that as little as 15 per cent of the top 500 retailers in the UK provide stock visibility online. Recent news suggests that some high-street brands have even been reducing the availability of additional services like ‘click and collect’ in favour of controlling omnichannel costs.
Some retailers are succeeding in stock management, though. Take Screwfix, for example. This retailer of home improvement supplies provides insights into the availability of products from the get-go online and on mobile. It even offers real-time updates on when the product will be back in stock, something of considerable value to the customer. Retailers are starting to make steps in the right direction, but more needs to be done.
Focus on supply
Currently, many retailers are fulfilling orders centrally without even looking at the stock that's readily available at local stores or in warehouses. However, the data does exist and, in most situations, online order volumes are large enough to reveal regional and cross-border buying patterns. Isn't it time that online browsing becomes an indicator of demand that can be used to shape supply chain strategies?
Retailers must analyse all the signals affecting demand for specific products and ranges if they’re to fulfil the needs of the consumer. What we’re seeing is that demand complexity has increased. There is a growing need for retailers to review the process that determines reorder volumes when replacing stock across all their channels.
Analytics is the future
In many cases, measuring the relative costs of fulfilment via different methods and modelling is also key for establishing the best possible route to serve the customer. Slowly but surely, retailers are beginning to understand the role that big data and analytics can play in linking multiple demand indicators together. With the market facing increasing pressure to adapt to a mobile first strategy or innovate with the internet of things, retailers must now adopt an analytical strategy to gather data, foresee and plan for demand, then turn that informed decision-making into profit.
As online shopping, changes in customer habits and the increasing costs of operations combine, supply chain managers are under pressure to counteract any downfall in sales. Today, the most critical pieces of data that can be captured are the indicators of what demand is going to be and where. Once demand statistics are established, retailers can look forward to filling those baskets, turning transactions into profit and minimise returns and missed opportunities due to a lack of stock.
Considering how much investment is tied up in stock for retailers, analytics has a lot of value to deliver, that’s for sure.
Find out more about better retail from better analytics.