Picture this scenario. It’s just two weeks to Christmas, and you’ve found the perfect winter jacket online for your mother. It’s in dark red, her favourite colour, best of all, the website says it’s 50% off. Free shipping is included. Excited about the deal you click on the option to select her size, your credit card in hand. Suddenly an error message pops up, “No size available”.
If this was your customer, it’s likely their next step is to move on to another merchant. Statistics from US shoppers reflect this, with 98% of online consumers doing just that because they couldn’t get whatever they needed from your website.
In the pursuit of clearing stocks and turning a profit, don’t forget to factor in customer experience and satisfaction, which are cornerstones to positive business growth. Making sure inventory is aligned across your database is important, even more so for brick-and-mortar stores with options to purchase online. You could redirect a customer to purchase your product from your physical store, especially if the product is available in store but not online.
So this entire process of managing your inventory is key to planning your promotions, getting your customers to what they need and increasing sales. Here are four reasons why you need to consider inventory management:
- Helps a company decide which products to promote
Inventory management is important because it helps a company determine which products to sell, when to sell them, and how much to promote them. This can help a company invest more in products that will sell, ensuring that they can move all of their inventory – increasing profits.
Many retailers view inventory planning as a strictly operational process, looking at metrics such as in-stock rates and fulfilment percentages to reduce costs. But inventory planning can help marketing, and merchandising teams increase sales and gross margin.
For example, visible inventory reports can help you understand fast and slow movers and determine when to launch promotions. This reduces the need for massive discounts, which erodes profit margin. In addition, a smart point of sale (POS) solution can assist business owners in tracking inventory so that they can make better decisions.
- Aligns inventory levels with business cycles
Managing inventory supports the process of planning your promotions, allowing you to select the best time for introducing new products or changing pricing schemes. If you notice that a product doesn’t sell well during its first season on the market but has high demand during holiday shopping, increasing your stock during those times would benefit your company’s bottom line. It will also attract customers who might have been sceptical about purchasing something new at first glance.
Therefore, using inventory management data to plan your promotions is critical because it helps you identify the points in your business cycle where you need to create or change promotions.
In addition, data help stores use a “made-to-stock” method for their inventory planning. This means they can anticipate demand by looking at business cycles and ordering enough stock to serve their customers’ needs while still having small amounts left for sales and promotions.
- Improves performance and order fulfilment across sales channels
If you are selling via brick-and-mortar stores, your website, third-party merchants such as e-commerce marketplaces, and promotional planning help you identify what products will sell well in each channel at different times. For example, if you sell food products, you might realise that hamper sales tend to increase online in January or February due to the Chinese New Year. However, walk-in sales tend to improve in the last few weeks around the start of Chinese New Year as businesses rush to purchase corporate hampers for clients. You can plan promotions based on those trends. This makes it more manageable to decrease excess inventory during slow times and increase it when the peak seasons roll around.
Overall, It allows you to make better decisions about when items should be ordered from suppliers or manufacturers so that there’s enough time for delivery from when the items leave stores or warehouses. If this happens too late, there will be no time for shipping from the warehouse again, and customers may not receive their items in time.
- Improves consumer satisfaction
With online marketing, the Instagram post or marketing email you send out today reaches anywhere from a single person to all loyal or potential customers. When customers share promotions on social media and third-party sites publish, the audience can grow amazingly fast. However, if your staff is not ready or has yet to learn what promotions are offered, they cannot respond in time to get to the inventory. Even if your staff is aware that a promotion is coming, it is challenging to act accordingly and deliver goods on time if they do not have the resources. Imagine if you run a cafe and decide to give a free coffee cup with every purchase that customers make. Your customers get really excited and ask for a coffee cup when they buy a coffee – only to be told that the cups are not ready or that your staff cannot authorise the promotional price.
Therefore, it’s clear that retailers need real-time inventory information, especially if they are running promotions which can cause a surge in customer queries. That way, they can react quickly by reordering, transferring stock from another location or dropping shipping to the customer. When customers get the products they want faster with fewer mistakes or out-of-stock, it increases customer loyalty.
Strategic inventory management is key to improving promotional sales
Promotions are beneficial if you’re trying to clear out old stock at a discount, which can help bring in new customers and increase sales overall.
If you are looking for a way to integrate inventory levels across various sales channels without increasing your staffing budget, it’s time to tap into Qashier’s inventory management. Our powerful built-in inventory management system allows you to manage your inventory across multiple stores and warehouses.
Qashier’s smart POS presents an integrated solution to meet all kinds of business needs with multiple digital solutions, including QR code payments, employee management, customer relationship management (loyalty programs), inventory management, data analytics, and cashless payments, all in one terminal.
Qashier promises a seamless setup within 10 minutes, without any need for technical expertise. It boasts a user-friendly interface that is simple for anyone to learn and use.
One Qashier POS solution comes with integrated payment processing. With just one terminal, you’ll be able to accept an array of payment types, from major credit cards, e-wallets and EFTPOS. Speak to us to see how Qashier Smart POS can meet your business needs. Schedule a meeting with us here, or reach out via email [email protected].