Inventory Management and Retail Store Experience
on Monday, December 24, 2018
From the Desk of Rob Baumhover, Director, Retail Services, VGM Retail
Providers looking to drive their businesses forward must form operational strategies in the following areas: Marketing, Product and Store Experience. These pieces are the core of every business. To perform at an optimum level, each play an important role towards success.
To highlight just one aspect, I would like to focus on the inventory management piece, which falls under the product core concept. In my career, I have often seen owners take a back seat with managing inventory correctly. Unfortunately, the severity of holding too much or too little inventory can have a negative impact on the bottom line of a business.
For instance, by having too much inventory on-hand, a store and stockroom can feel like it is bulging at the seams, taking a direct hit to a store’s overall experience. Due to consumer value placed on store experience, this can unfavorably affect a business and a customer’s likelihood to shop a store. In addition, too much stock can cause inefficiencies and hold up excess dollars in non-performing merchandise. Hence, giving owners a reason to lay awake at night.
The latter, holding too little inventory, can be just as harmful. Not housing enough inventory will make stores look and feel bare, maybe even feel like the store is going out of business. Again, causing the overall experience to be poor. Customers might also find themselves frustrated that the item(s) they need are consistently out-of-stock, which can cause a lost sale and further deter a customer’s future business to your store. Outside of these issues, owners might find themselves with ordering issues that cause pricey shipping costs and unnecessary expense. Consequently creating another bad situation.
So, how can Providers manage their inventory more effectively?
- Check and analyze sales reports weekly (at minimum), allowing employees to maintain a read on the store and customer buying trends.
- Use the findings from sales reports to set an ordering schedule for each product category and/or vendor partner.
- Properly set minimum and maximum amounts to carry for each product.
- Repeat and repeat. Managers cannot just do this process once, but must look at inventory management as the ongoing project that it is.
Providers follow these steps and you too can eliminate the discrepancies of the issues above!
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