Inventory management requires an initial effort to get right, but once you’ve established effective inventory control, ongoing management is much easier, particularly for businesses prone to seasonal spikes or significant periods of peak demand.
Seasonal fluctuations affect both eCommerce and brick-and-mortar businesses equally. If a product is in season, inventory stock can fly off the shelves. However, the moment the season winds down or the holiday period ends, demand can quickly disappear. So how do you stay in control of inventory during the highs and lows of seasonal demand?
Follow these seven tips to improve inventory control during holiday seasons and peak periods.
Categorise seasonal inventory
Categorising inventory stock based on product life cycle helps to differentiate the purely seasonal products from perennial products that are sold year-round but experience times of increased demand according to the season. For example, the market for fresh cream is year-long but demand will spike over certain holidays such as Christmas and Thanksgiving because it is the perfect accompaniment to pavlova, trifle and pumpkin pie.
Purely seasonal products are those items that attract no demand outside of the season with which they are associated. These products include such things as Easter eggs, or Halloween and Christmas decorations and confectionery.
Businesses need to establish effective inventory control to avoid being left with residual stock that has a short shelf life or is costly and impractical to hold because of its limited seasonal demand.
Improve demand forecasting
Forecasting demand is one of the greatest challenges to inventory control for seasonal demand. At best, you’re taking an educated guess at how many sales you expect to make within a given period, but there are many tools available to assist with seasonal forecasting that help predicts basic sales or seasonal trends.
Analyse historic data and seasonal variations to identify issues that may affect the replenishment of perennial products throughout the year and use this information to set minimum stock levels.
A robust analytics module within your inventory control system is invaluable here. A system like Unleashed’s BI Vision (pictured below) lets you quickly and easily drill into your historic data. You can also keep a close eye on metrics such as your Stock on Hand Value at the warehouse and even SKU level to monitor for over (or under) stocking. While the Average Days to Sell metrics lets you spot slow- or fast-moving items to avoid surprises.
Tracking your Stock on Hand Value at a warehouse and product level helps you avoid surprises.
Identify timelines of seasonal demand
To plan appropriately for peak times, you need to understand the length of your peak seasons. This enables you to determine the degree to which you can respond to product sales throughout the season.
With shorter seasons you generally have the full quantity of stock delivered in advance. For example, demand for red roses increases for a single day on Valentine’s Day. Whereas a long season will allow inventory stock such as bucket hats, sunscreen and ice cream during summer months to be replenished several times over the course of the season.
Good inventory control means you must ensure eCommerce channels correspond with physical, on-hand stock. If you’re out of a specific item, it should not be showing as available on websites. Indicate when items are out of stock and if/when another shipment is likely. Customers attempting to add items to their cart only to find out they’re not in stock will readily switch to competitors.
Know your product lead times
Product lead times will influence many purchase decisions. Long lead times dictate purchasing choices are made in advance of peak demand, while short lead times mean sales during the season will inform additional purchase decisions and reduce inventory risk.
A quick response also helps if sales exceed forecasts. Even if lead times prevent re-orders being placed with the original supplier, an alternative source with a shorter lead time may be found closer to home.
Streamline order fulfilment
Managing inventory packing, tracking and shipping can be a challenge when seasonal demand brings an influx of orders. Implement an order management system to overcome issues and ensure smooth fulfilment tasks during holidays.
Software will help you seamlessly manage back-end operations, including inventory tracking, order management and smart, more response replenishment
Systematically label the range of products you have in stock to improve picking, packing and shipping errors and avoid dispatching in-correct products items.
Know your software options
eCommerce businesses will use an inventory and/or retail management platform. These platforms have become so sophisticated that they are able to offer tools such as interactive point of sale, personalised invoicing, the ability to accept credit cards, loyalty programs and of course, inventory management.
Don’t let poor inventory control systems cost you money. By investing in the right inventory control software that will keep your products organised and enable you to sell, pack and ship multiple products swiftly during holidays. Conduct proper research, gather resources, and find the best software solution that will ensure you to automate as much as possible allowing you to focus more on marketing your products.
Inventory management software eliminates the hassle to manually adjust your inventory whenever you make a sale and helps you avoid double selling a product, allowing multichannel integration. An effective inventory control and order management system will be worth the investment for small retailers, especially during holidays.
Timing is everything
Understanding the dynamics of seasonal inventory helps businesses determine the best inventory control method for them. Forecasting, purchasing and channel replenishment need to be approached in different ways for different seasons and products.
The aim is to have enough available stock to meet demand but not be left with a surplus and unsaleable stock post season. Monitor sales and if you do have stock that is not moving as well as anticipated don’t leave seasonal clearance sales to the last minute. You should start offering discounts a few weeks before the end of the season to clear out seasonal inventory.