The fast-changing retail industry is increasingly adopting a customer-centric approach. Customers have a wider array of options and are no longer willing to buy whatever brands offer them on a platter. In the past, retailers used to purchase merchandise based on their gut instinct or mere hunches. But today, staying relevant in the market calls for a scientific and data-driven approach.
The growing dynamism of customer preferences also means that brands can no longer pile up stocks indiscriminately in their warehouses, as this could lead to wastage and obsolescence. This is where lean retailing comes in!
Lean retailing is all about ‘rightsizing’ your inventory and maintaining a minimal stock while relying more on the JIT deliveries as and when a product style is demanded. Lean retailing is a highly data-centric and customer-oriented supply chain practice and calls for strong supplier relationships and seamless communications. It enables businesses to cut down on unnecessary carrying costs and avoid the innumerable risks of overstock.
In this blog, we take a look at 5 simple methods you can adopt to make lean retailing a roaring success.
Regular replenishment of stock
To ensure reducing your in-stock inventory doesn’t impact your day-to-day sales, it is necessary that you replenish your stores and warehouses regularly. Optimum replenishment of stock aims at keeping your inventory costs low, while still being able to meet customer demands on time.
The optimum rate of replenishment is determined based on the data related to customer demand and preferences, and also the physical storage available with the brand. These can be factored in using inventory management software which can help brands arrive at the optimum reordering levels and also the timings of stock replenishment.
Redistribution of stock with inter-store transfers
A pre-season forecast of demand is necessary and can provide a fair idea of the customer behavior patterns over the longer time horizon. But developments during the season can also impact the trends and thus brands need a more proactive approach to ensure no sales are lost. For such contingencies, inter-store transfers are a great way out.
The inter-store transfer allows easy circulation of stock from areas of low demand to those of high demand. It is very effective in improving the health of your inventory, reducing stock brokenness, and supporting omnichannel distribution.
Suggest pullbacks for dead/slow-moving inventory
Slow-moving inventory doesn’t just occupy space on your shelves, it also prevents better-performing products to be exposed to the market. Besides, the longer your products lie on your shelves, the greater are the chances of damage, eventually making them completely unsuited for sale.
It is necessary therefore that you identify your slow-moving stock early by tracking your inventory regularly. After zeroing in on the slow-movers, pull them back either into the warehouse or transfer them to another store if there is a likelihood of better conversions.
Expose offline inventory to online sales channels
Omnichannel commerce is fast emerging as the most disruptive trend in retail, and the lines between offline and online sales channels are blurring fast. Exposing offline products otherwise lying in your physical stores can enhance their conversion manifolds and boost sales.
With automation-based solutions like Increff Offline to Online (O2O) solution, brands can get a single view of 100% of their inventory across the board through a simple UI. As soon as an order is received, fulfillment can be done from the store or warehouse closest to the customer, thus saving significantly on logistical costs and dramatically speeding up the delivery. O2O can however be made possible only by having complete transparency and traceability of the entire inventory.
Faster re-commerce to avoid stockpiles
As brands expand their presence and achieve greater sales levels, returns can also grow proportionately. Handling returns efficiently with automated solutions is necessary to ensure the quick resale of the products.
Increff WMS allows brands to sort the returned products on the basis of their condition. Subsequently, the items can be resold through your own sales channels, or redirected to secondary markets as second-hand products.
Faster re-commerce prevents damage due to delays and prolonged transportation, and thus loss of value. This helps optimize the resale value of the returned goods and avoids stockpiling low-value items in the inventory.
Maintaining a lean inventory is the way forward when it comes to building streamlined supply chains to meet the needs of an intensely competitive, dynamic, and customer-centric marketplace. Lean retailing however comes with its own set of challenges, most of which can be mitigated with some proactive planning and smart tactical decision-making.
