The holiday season is a special time of year for many of us. However, it can also be a challenging time, especially for retail. Whether you’re a manufacturer making the goods, a supplier delivering the goods, a retailer selling the goods, or an employee involved along the way, there can be difficulties with inventory management during the holiday season. It’s a busy time and consumer demand seems to be an ever-fluctuating battle around the holidays. It’s a good idea to slow down and step back before the holidays to highlight potential difficulties and what can be done to manage them in advance.
A stock out is essentially just how it sounds. It is a situation where a good or item is completely out of stock. Effectively, the inventory on this item is exhausted. So during the holiday season when everyone is in a crazy rush to purchase presents, inventory can experience a stock out situation. When a customer tries to buy or request a product that is stocked out, there is a high possibility that they will end up unhappy due to a lack of inventory stock. If stock outs occur frequently, which can happen around the holidays, a business is at the risk of losing customers.
Stock outs can happen to customers both in the store and online. Unfortunately, when customers are unable to find the product they wanted in a store, due to a stock out, over 50% of these situations result in lost sales. Customers decide to take their business elsewhere or forget the purchase altogether. This reaction was even greater with online shopping, where over 65% of customers pressed the delete button or cancelled their entire purchase. This experience can taint a customer’s impression and loyalty to a store. These experiences can compound and impact the future of the retailer’s brand. These customer experiences can not only impact the retailer, but can have a domino effect and impact manufacturers and other key members of the supply chain, with all feeling the pressure to fulfil inventory stock and avoid stock outs at all costs.
With smart phones shopping is literally at our fingertips. The access to online shopping often creates omni-channel shoppers. This means, consumers might purchase online first, and then return the product in the actual store if it is not what they expected. For example, you may order a pair of shoes online and once you’ve tried them on at home, you realise they don’t fit. You take them back to the local shop to exchange them for a different size. This poses an interesting situation for inventory stock. There is a delicate balance of having the right inventory, at the right place, at the right time, with omni-channel shoppers. Creative solutions must be utilised in order to keep both e-commerce and in-store inventory stocks at the right capacity.
What to do?
Inventory management software is a key component to ensuring there is visibility and transparency in inventory stock levels. It allows a company to analyse customer buying habits and preferences and optimise logistics throughout the process. This system makes managing an omni-channel strategy much simpler. The inventory management software can help manage workflow, provide real-time data and can positively influence all members of the supply chain.
The holiday season can bring several challenges, but with inventory management software, you can mitigate these difficulties and reap the benefits of a profitable time of year.