Media Release
January 15, 2020
Pronto Software whitepaper summary
Retailers are under pressure to offer customers greater choice and convenience – all while increasing sales margins and controlling cash flow. A strong inventory management strategy allows retailers to meet both demands – in a sustainable manner.
- Consumers demand full visibility
Customers get frustrated when an item they come into a store to buy is unavailable – and they can turn against a retailer who then asks them to call other store locations to find the item. Even when shopping online, the greatest risk to customer loyalty is when they are told, after they purchased an item, that it is no longer in stock.
According to an IBM study:
- in 2011, 68% of consumers said it was important to know an item’s availability
- by 2016, 79% of consumers said it was important for retailers to provide inventory levels such as, “three left in stock”, rather than simply indicating in or out of stock.
- Tell-tale signs of inventory mismatch
Many retail industry experts believe that inventory related issues are the first sign of looming retail failures. While indicators will vary depending on the type of retailer there are some obvious symptoms of poor inventory management including:
- Overstock of inventory
• Low inventory turnover
• High cost of storage
• Decreased cash flow
• Unplanned sales
• High proportion of sale stock
• Poor in-store merchandising. - Data-driven decisions
Effective inventory management offers many benefits including:- Clarity over ordering, shipping, delivery margins and costs involved
- Accurate forecast and planning
- Higher levels of customer-service with access to up-to-date information. For example, if an item is unavailable in-store, the sales staff can check other stores and warehouses and organise transfers, securing the sale. SMS alerts can even be sent to customers updating them on status of the transfer.
- With integrated POS software, updates across the system can be automated. Once the sale is processed in the back-end, the financial postings and necessary inventory movements are recorded – all in a seamless manner, improving efficiency.
As the pressure on retailers to improve return on investment, control expenses and properly manage cash flow continues to mount, retailers are required to pay close attention to the amount of inventory that is flowing in – or not flowing out – of the business.
Without the right inventory, retailers simply cannot make money.
A fully integrated POS and inventory management system significantly increases a retailer’s ability to accurately track, trace and account for every item moving through a supply chain. From source to sales completion and delivery to the customer, retailers gain a complete view of customer demand, costs, margins and more. This provides a clear understanding of where gaps are – and the many opportunities to increase revenue.
Source: Haystac.