By VAI’s Vice President of Sales, Joe Scioscia
The Holiday season is amongst us, and with that brings the holiday shopping rush. This is the time of year when retailers enjoy significant revenues, but the holiday season can also bring challenges for retailers without a proper inventory management solution in place. It is estimated that 87 million people will be shopping during this holiday season. With that kind of demand for goods, it is imperative that retailers properly prepare and manage their inventory, with up to 40% of retailers’ annual sales occurring during the holiday season. (Source: National Retail Federation, derived from Bureau of Labor Statistics data). Along with in-house shoppers, retailers are experiencing a sizable increase to their e-commerce sales as well.
Automate your Demand Planning
Today’s business environment requires retailers and their suppliers to manage inventory more efficiently in order to grow profits and satisfy customers. Advanced interactive inventory management solutions can help a company’s sales and cash flow while reducing inventory costs. By leveraging historical sales data, systems can forecast demand and predict long-range trends, as well as seasonality for each item. Not only should a forecasting system capture seasonality and trends, but it should just as importantly calculate how volatile the sales are for each item. No matter how good the forecasting system is, there are always going to be items with volatile and unpredictable swings in sales beyond seasonality and trends. By incorporating sales volatility per item into the safety stock calculations, companies will be covered for sales spikes that occur above the forecasted demand.
The goal with any automated buying solution is to generate purchase order quantities that support the company’s strategic goals for profits and customer service, while doing so in the most efficient and economic fashion. Automated systems can optimally push order quantities up to get prepaid freight, or to hit vendor minimums, or to cube out a full container, if desired, all while honoring pack sizes. Additionally, automated buying solutions can consider multiple store locations in the network and check for overstocked items and facilitate stock transfers before buyers place orders to the vendor. By calculating the costs and upcoming demand for each of your items, automated systems can tell you if a vendor incentive makes economic sense, and if so, how much more of each item to buy.
Don’t lose sales due to out-of-stock items
Most intended purchases may be lost when a consumer discovers an item is out of stock. Don’t let poor inventory management cost your business – implement tools that will keep you organized and on top of your inventory quantities. Don’t miss an opportunity to make a sale because you weren’t thinking ahead. According to Aberdeen Group; ERP’s Impact on Demand Planning, August 2015, Effective demand planning is an integral component of success in today’s business environment. Through ERP and analytics, organizations can acquire the capabilities needed to ensure that inventory holding costs are low, opportunities are not missed, and materials are acquired at favorable prices.
Leveraging the Web to Grow your Business
Having a strong online shopping season can make a retailer’s whole year a success. From updating website portals and improving order fulfillment, retailers have a lot to do if they expect to succeed. According to VAI’s Director of eBusiness Solutions, Todd Endsley, 93% of buyers prefer to buy online when they’ve decided to purchase. Today’s retail environment is in a state of growth, where retailers are becoming more global and they are dealing with an increasing amount of sales channels.
Much of this has been influenced by the increase in the number of retailers that are offering products online. (Aberdeen Group ERP’s ERP in Retail, February 2015). This new shopping experiences challenges retailers to alter the ways in which they do business. It is really all about making the shopping experience as simple and convenient as possible for the customer, regardless of the channel. According to Aberdeen Group, 64% of retailers have data entry at the point of activity, which also impacts efficiency. Having an integrated view of customer’s behavior can enable things such as online loyalty programs and can speed up transactions and service.
Although the preparation for the Holidays can be a difficult demand for retailers, it can also be just as rewarding. One can argue the fact that retailers play the role of Santa, making sure that everyone gets exactly what they want during the Holiday season.
–Joe Scioscia, VAI Vice President of Sales