Successful inventory management is about much more than keeping track of what’s on your shelves and in your warehouse; it’s about having the right products available at the right time without tying up unnecessary capital. Poor inventory management can lead to stockouts or overstocking, not to mention frustrated customers. Great inventory management, on the other hand, keeps products available when needed and avoids excess stock or shortages. It is proactive, data driven, and seamlessly connected across all channels, keeping costs under control at all times.
To help you find the right balance, here are five practical tips to improve your inventory management.
1. Keep track of inventory movement
The bigger your retail operation – especially with multiple locations, warehouses, or large product ranges – it becomes increasingly difficult to maintain visibility over stock. Are certain items still in the warehouse? Hanging in a fitting room? Or already sold? If you’re still using fragmented systems, it can prevent you from seeing the bigger picture, making tracking stock a logistical nightmare.
Solution: Implement RFID (radio frequency identification) technology. This technology allows you to track products in real time. Adidas, for example, uses RFID to monitor its stock across stores, warehouses, and even fitting rooms, making sure nothing gets lost along the way. At the point of sale (POS), staff can quickly scan RFID tags to identify products in stock. This enables them to locate items much faster than manually searching or using barcode scanning systems. As a result, staff spend less time on inventory tracking and more time assisting customers.
2. Understand how much you’re selling
It’s Monday morning, and your staff are ready to begin restocking. Without a clear inventory system, they’re juggling spreadsheets, manually counting items, and running between the stockroom and sales floor to figure out what’s missing. They’re struggling to find certain sizes of a coat that flew off the rails over the weekend, meanwhile the stockroom is overflowing with last season’s unsold bags.
Solution: Use demand forecasting tools to track sales trends and predict future demand. For instance, a fashion retailer might notice that floral dresses spike in sales every spring. With this insight, they can stock up in advance, avoiding missed sales opportunities. Similarly, an electronics store can anticipate growing demand for gaming consoles during holiday seasons. By using forecasting tools, you can plan ahead, making sure you have sufficient stock on hand when demand surges, rather than scrambling to place last-minute orders or missing out on sales altogether.
3. Connect physical and online channels
Many retailers still fall into the trap of handling their brick-and-mortar stores and eCommerce operations as separate entities, leading to inventory discrepancies. This leads to customers ordering products online, only to be told later that they’re out of stock because the in-store system wasn’t updated in time. Frustrating, right?
Solution: By using a system that connects information flow between your physical and digital channels, you can see exactly how much stock is available both online and in store, keeping your customers and your employees informed about what’s in stock and where. For example, a DIY retailer can let customers can visit the store’s website, check for the availability of a specific product (such as a particular paint color), and see whether it’s in stock at their local store. If the item is available, they can choose to reserve it or pick it up in person. If it’s out of stock online, they can be directed to the nearest store that has it available. This reduces the chance of customers making unnecessary trips or facing disappointment when an item they want is out of stock.
4. Simplify your replenishment strategies
Manual replenishment is a bit like guessing your smartphone battery level without a display: you risk running out at the most inconvenient moment or putting it to charge when you don’t need to. Staff may forget to reorder popular items or overstock slow sellers, leading to wasted space and tied-up capital.
Solution: Automate your replenishment process. Rather than manually tracking inventory and making guesses, automation uses real-time data to trigger orders when stock levels fall below predetermined thresholds. For example, in a grocery store, the system can track daily sales patterns and reorder products like milk, bread, or fresh produce based on real demand rather than assumptions. Advanced systems go even further by analyzing past sales data, seasonal trends, and other key factors to calculate optimal order quantities. They take into account everything from lead times to promotions, ensuring that the right amount of stock arrives at the right time, reducing the risk of understocking or overstocking. This way, popular items stay available, and slow sellers don’t take up valuable shelf space.
5. Use software that cuts down on manual work
A store manager, notepad in hand, moves slowly down the aisles, meticulously counting products on each shelf. In a store with thousands of SKUs, this process takes hours – sometimes even days – of tedious work. Not only is it time-consuming, but it’s also prone to human error. A simple miscount, a missed product, or a delayed update can lead to discrepancies in stock levels, causing problems when customers look for products that are supposed to be available but aren’t.
Solution: By using software like LS Central, retailers can eliminate the inefficiencies of manual stock tracking. LS Central connects sales and inventory management in one system, so every time a sale is made, stock levels automatically update in real time. Not only that, but the system supports mobile inventory, reducing reliance on paper-based systems and allowing retailers to complete stock checks, receive deliveries, and adjust inventory records on the spot.
Stock up on the right solution for success
Retailers that successfully improve their inventory management need powerful and efficient systems that connect all facets of their business. These solutions allow them to track inventory with RFID, forecast demand accurately, unify sales channels, automate replenishment and avoid unnecessary manual work. With this kind of approach, you’ll not only streamline operations but always have shelves that are stocked with the products your customers love – when and where they want them.
If you need help optimizing your inventory with an effective system, reach out to our experts for more information on how LS Central can help!
