Using Data to Improve Retail Inventory Management

by | Mar 16, 2022 | Retailers, TeamSPS

When it comes to retail sales, a significant percent of local store merchandising is driven by e-commerce. As consumers, we’re either going online to buy our products and picking them up at our local store or we are trying to discover what’s at our local store before we make the trip there.

For example, if you need a new TV, you would probably check reviews online for the best one to fit your needs, then visit BestBuy.com to see if that model was available at your local Best Buy store. If it’s there, you might go buy it immediately. If the website indicates it’s out of stock, you may perform another search at another nearby store until you find what you’re looking for.

Streamline retail inventory management

For the better part of a decade, purchases made online were eating away at the profits of brick and mortar stores. Instead of going to the store to purchase an item, more and more people would simply order it online and have it delivered to their home. If shoppers did enter the store and saw an item they liked, they would check to see if they could find it online for cheaper.

In recent years, as retailers integrated their online presence with their physical locations, online evaluation has become a major driver of local store sales. People now often research a product online and then to check to see if it’s stocked at a local store before leaving the house to make their purchase.

For a retailer to make the most of this new consumer behavior opportunity, you need vendors that work very dynamically to provide sufficient inventory to your local stores at the right time. Moving retail inventory efficiently through your supply chain is critical to your business. But since inventory management is almost impossible when the data you receive from suppliers is missing, incomplete or inaccurate, you need SPS Commerce to help you get the data you need.

In order to succeed in retail inventory management, it is extremely important that the retailer and the supplier maintain accurate, real-time inventory data that can be displayed and automatically updated on the store’s website or mobile app. When the website indicates there’s inventory in stock, but the customer arrives and the product is sold out, it could mean the loss of more than the price of one item. They could have intended to buy a cartful, but if you don’t have that one item they came for, they will likely take the whole sale to a different store.

Supply chain collaboration at a local scale

Having local vendors can have a positive impact on the economics of the logistics of the order fulfillment process, helping retailers reduce overall shipping costs and times. Additionally, retailers have realized how popular shopping local has become and how important it was to cater to local and regional preferences.

For example, in Minnesota, we have completely different clothing needs than what the people in Arizona or Florida might require. We need warm weather clothing by June, and winter clothing by December. In Arizona and Florida, they will only need light jackets over the winter, and won’t sell a single parka.

Local vendors are simply the best equipped to address the needs of local customers. We have many vendors here within our great state that understand and know how to address the clothing needs of Minnesotans dealing with the average Minnesota winter. And there are local vendors in Arizona that know and understand how to address the needs of an average Arizona summer. This requires supply chain collaboration.

To achieve supply chain collaboration, point-of-sale analytics is crucial to examine the data for each individual store, and tailor a buying and inventory plan to optimize your purchasing efforts. A retail network can help you discover local sources of the products that you need, with fast onboarding.

The technology is available and SPS Commerce can help you get started. To learn more about how SPS Commerce’s sourcing, fulfillment, and analytics solutions can help you achieve retail inventory management and supply chain collaboration, please contact us today.

Brandon Pierre

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