A retail shop software helps in knowing the real time stock availability across the channels of your organization leading to lucrative profits.
The excess inventory is an issue faced by most SMEs due to the non-visibility of stock in real-time, but retailers & distributors have some other unique challenges not as common at other businesses a retail shop software can address all such issues by showing real-time stock and making stock predictions.
Based on a research
- Over 60% of the customers were willing to seek another retailer if a brand isn’t able to offer their preferred products fulfillment.
- 2/3rd of the customers reported that they are less likely to buy from retailers who are unable to confirm product availability.
- Studies have shown that the annual additional cost of holding excess inventory can be 25% to 32% of gross margin.
As a result, this lowers operating profits. When there is no real-time inventory visibility, you may hold more inventory than you need, consider for instance we cannot identify the availability or SKU of the products when it’s needed for sales.
Your Income Statement suffers in two ways
- Lower gross margin due to lack of effective conversion of potential prospects to customers&
- Increased Operating Expenses for additional space, labor to manage, excess investment on the stock, and taxes.
How can poor stock visibility negatively affect a brand?
There is no mercy for bad stock visibility, if you have a product it would need that bringing to the customer’s attention at the very start of the shop, or either at the very end it should be arranged as such.
Brick and mortar stores can be at risk of bad stock visibility, primarily due to not changing their layouts often enough and not considering external environments.
For example, it is summer outside and you find the store is pushing heavy on raincoats, it does not work, does it?
You would want your shorts, t-shirts, sunscreens, cooling glasses, and flip-flops at the very front of your store.
How retailers handle this problem?
As a result many large-scale retailers usually hire expert retail installation companies that usually take care of stock merchandising, store layout design, and attractive signage installation.
Therefore, Hiring a Retail Installation company will also provide real-time insights and performance indicators through store audits and surveys which will further help in future planning and regular reshuffling initiatives, like updating customer-facing shelves and stock movement activities. Above all, helping in getting a positive return on investment through maximized sales and customer engagement.
In the coming years, inventory visibility will become very important to omnichannel retail strategies therefore, we need to choose the right inventory management software such as ENON to improve real-time stock visibility.