As an established retailer, you require a wide range of styles in multiple sizes to meet the customer demand. The need for instant gratification has become a dominant force in retail, hence the primary requirement of having the right stock available in the right place at the right time.
Constraints on store space, minimum display requirements, and demand forecast based on limited data availability, initially determined how the inventory will be allocated across a chain of stores. All these constraints led to overstocking and understocking across stores a few weeks after the season launch.
In situations where there’s excess stock present in stores with low demand, or when the fresh inventory becomes leaner in terms of width and depth in stores with higher demand, inter-store transfers help in improving stock availability. It is a process of re-distributing the existing inventory among the stores and making corrections to the allocations done during the pre-planning period.
Since every decision involves the resources of cost and time, retailers need to analyze the requirements and benefits before making these shifts. Inventory optimization through inter-store transfer has several benefits:
Increff Iris, our smart merchandising tool, helps in inter-store transfer to optimize stock at the most granular level. By calculating the ideal requirement for every Store + SKU, it utilizes excess inventory to improve stock health and has consistently helped bands achieve 20-30% improvement in stock health and ~30% improvement in sales.
One of India’s leading formal wear brands used Increff Iris across 150+ brand outlets and witnessed a 40% increase in sales at the receiving store. It reduced brokenness by ~40% and prevented sales loss. One of the well-known International brands, expanding operations in India, reduced brokenness by 34% and uplifted sales by ~80% for the transferred stock. The overall store sales increased by 66%.
Overstocking and understocking are some of the major challenges in retail. It not only limits proper exposure of inventory but also hugely impacts topline revenue and bottom-line margins. Increff Iris helps you make quick decisions on stock adjustments basis true demand patterns so the optimum potential of your brand can be realized, any time of the year.
31 March, 2021
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