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Business Technology

5 sure shot techniques to reduce costs in the retail supply chain

Creating a highly competitive retail supply chain depends on how well you’re able to control/reduce your costs. Incurring unnecessary costs can mean that your processes aren’t efficient enough, your funds are blocked in too many fixed assets, or your supply chain isn’t performing at an optimum level. These factors could pile up costs, impact margins, affect your competitiveness, and eventually make your business falter. 

Keeping costs under control is therefore one of the most essential aspects of supply chain management. Let’s look at 5 sure shot techniques that can help you reduce your costs:

  1. Localize fulfillment

Transportation accounts for about 40 to 50 percent of logistics costs, and 4 to 10 percent of the selling price of final products. Reducing the distance between your warehouse and customer clusters is, therefore, necessary to control overall costs. The closer your warehouse, or fulfillment center, is located to your customer cluster, the quicker fulfillment will be, which also means a significant reduction in fuel consumption. Regional Utilisation (RU), the idea of fulfilling maximum orders locally, is one of the topmost solutions for cost management in supply chains today. 

RU becomes even more effective when coupled with new-age merchandising solutions. Powered by data insights, this enables brands to conduct Pincode level analysis to place the right products at the right warehouse, or store, as per demand in a particular market. Shelving the right styles and size combinations can boost regional sales significantly while saving costs on logistics.

  1. Rethink warehousing!

As a brand expands, operating from a centralized warehouse can raise distribution costs and impact business quite significantly. In fact, as per Logistics Bureau, up to 12 percent of companies are unprofitable after distribution costs are taken into account.

This can be tackled with Distributed Warehousing which enables brands to expand into other regions, and support efforts toward regional fulfillment. Fulfillment of orders from various local and widely distributed warehouses is quick and cost-effective. 

Technology solutions like Increff Cloud warehousing allow brands to rent out spaces based on regional requirements. This means investment in warehouse infrastructure is not required and brands are able to convert CAPEX into OPEX thus controlling their overhead costs. In recent times, this has been further augmented with the rapid rise of 3PL players with whom brands can partner for renting warehousing spaces and adding value to the supply chain. 

  1.  Manage manpower costs

Costs incurred due to human labor is another significant portion of your expenditures. These include their wages, training and development costs, costs incurred in hiring additional/ad hoc labor during peak season sales, and adjusting manual errors committed by the workforce. 

With new-age WMS and merchandising solutions, brands can successfully avoid a lot of unnecessary labor costs and reduce errors in decision-making. Simple UX/ UI facilitates easy training which is extremely useful during crunch times when the technically skilled workforce is scarce or expensive. The ease of use increases the fungibility of staff and maximizes the use of the available workforce.

Automated solutions ensure continuous, seamless workflow with minimum decision-making errors. Digitizing inventory through serialization allows easy scanning of individual pieces of inventory for efficient tracking and reduces training time to 5-10 mins. This minimizes efforts and costs related to elaborate training and development of the human resource operating the system.

  1. Make data-backed decisions

Holding on to obsolete inventory can add up to 25 to 30 percent more to the unit cost of your products. Besides, the capital tied up with this inventory could account for about 15 percent of opportunity costs. Obsolete inventory is mostly a result of the inability to forecast demand accurately.

However, new-age merchandising solutions backed by relevant data enable brands to create product assortments with the right styles and sizes. This helps them meet the customer demand perfectly, without causing problems of overstocking or under-stocking, both of which impact costs, the former causing wastage and the latter calling for in-season redistribution. 

New-age solutions facilitate analysis of future demand over a time horizon of the next season or business year. Analyzing past sales data helps create a favorable estimate of the upcoming season stock requirements so the right quantity can be placed in the right location. Manufacturing the right quantity as per demand avoids overproduction, unnecessary expenditure, and resource wastage. 

  1. Use multiple channels for order fulfillment

Last mile connectivity is known to be the costliest part of the supply chain and accounts for about 53 percent of the total shipping costs. This calls for transforming order fulfillment through omnichannel retail, which is a fluid vision of fulfillment that allows customers to receive their orders in the faster possible time. 

Fulfillment options like Buy-Online-PickupIn-Store (BOPIC), store fulfillment, curbside pickup, home delivery, etc. are getting popular. Conversely, a customer visiting a store who is unable to find the desired product can make use of the ‘endless aisle’ online option to purchase it and get it delivered at home or the nearest store. This doesn’t just offer immense customer ease, but also allows brands to resort to the most cost-effective fulfillment option.

Cost control is the first step towards business process efficiency and with the above-given tips, brands can simply rule the roost among their competitors. Effective cost control has great benefits for not just the business stakeholders, but also the environment and society at large.

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Business Warehouse Management

10 Unrealized Benefits of Serialization

Itemized serialization pays rich dividends to your business by optimizing processes, making inventory 100% traceable, minimizing human errors, and increasing transparency throughout the supply chain. Here are 10 unrealized benefits of serialization for the brands:

  1. Inventory accuracy and traceability

Serialization detects and prevents duplicate scanning of items thus ensuring 100% accuracy. Since all the information is stored in the barcode, it is very easy to trace its journey within a warehouse and through the supply chain.

2. Easy tracking of user and machine actions

Since barcode scanning allows capturing 100% data in the system, in case an incorrect step is taken by a staff member it can be easily tracked. Brands can get down to the exact item barcode which is faulty, and the staff member that has made the mistake. This makes error mapping quick for training purposes and helps identify loopholes in the processes. This is not possible to record on SKUs as the number of items having the same barcode are many and zeroing in on the exact faulty item is difficult. 

3. Automate processes to reduce the resource time investment

Rather than using lengthy spreadsheets or approximations for taking crucial warehousing decisions, serialization enables easy automation of processes. Consolidating multiple steps helps reduce manpower and handle repetitive tasks more efficiently allowing managers to focus only on important tasks. It avoids costly errors and consequent business losses.

4. No need for wall-to-wall audits

In an SKU-based system, conducting wall-to-wall physical verification of the items require all operations of the warehouse to stop in order to avoid recounting the same items. This is not an issue with itemized serialization as each item has a unique ID and is perfectly mapped to the bin. With real-time inventory sync, in case there is any change the barcode will ensure it gets captured in the system. With 100% bin level inventory accuracy, regular wall-to-wall audits are not required.  

5. FIFO and FEFO for order picking

By having all the information accurately stored in the barcodes, brands can prevent piling up of aging inventory, obsolescence, and wastage. As the product expiry date of each item gets mapped to the barcodes, brands can use the First-In-First-Out (FIFO) algorithm to push out those items that entered the warehouse first. This method is widely used in industries where inventory is prone to obsolescence, such as fashion. 

Likewise, the expiry date of each item being stored, items expiring first are sold off first by the First-Expiry-First-Out (FEFO) method. Companies dealing in perishable products such as packaged milk or pharmaceuticals mostly use the FEFO method.

6. Location Adherence in Picking

In a scenario where an SKU is distributed among several bins and the whole SKU is represented by a single barcode, the picker may pick the items from any bin thus impacting bin level accuracy. SKU-based order picking will either not specify which bin the item needs to be picked from, or the system will not prompt an error when the item is picked from a mapped location. This can lead to inventory mismanagement, obsolescence, and errors in counting. On the other hand, when picking is done by following the individual barcode of each item, the picker will pick the item from the bin specified by the system. This ensures the inventory count is accurate at all times, there is no need for regular audits, and there is 100% traceability within the warehouse. 

7. Effective price analysis with the possibility for daily margin adjustments

Processes get interrupted whenever prices are revised in the stores. With serialization, brands can keep track of their cost prices and sales prices dynamically for different items. Margin adjustments can be made at individual style and piece level. Given the fact that the inventory is completely digitized, brands can easily adjust the prices of their stock depending upon the demand and location. 

8. Efficient returns management and processing

Serialization allows brands to link each returned item’s barcode with its reason for return. This makes for great insights into why customers are rejecting the products and what corrective measures must be taken. Repeatedly returned items can be quarantined for a thorough quality check, to understand the defect. Rather than creating new SKUs, serialization of inventory enables brands to send the exact item back to the vendor in RTV (return-to-vendor). As soon as a serialized item is returned, it can be made live immediately (depending upon its condition), expediting re-commerce and increasing the chances of resale. 

9. Easy SPF (Seller Protection Fund) claims to process 

When the exact reason for return is mapped to individual pieces of inventory, along with the image, it is easier for marketplaces to file a claim with brands for the rejected item. This ensures quick reconciliation with the brands.

10. Simple UX/UI for faster order processing

Serialization helps digitize the warehousing process and allows brands to use handheld devices or Bluetooth scanners for scanning items. This eliminates chances of human error and enables working with an automated system accessible through a simple UX/UI. All of this precludes the need for costly high-skilled labor, cuts down on training time, easy cross functioning, and ensures faster order processing.

As is clear from the above pointers, serialization lies at the very heart of automation in warehouses and is the first step toward making supply chain processes more efficient, cost-effective, and highly competitive. 

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Business Smart Merchandising

5 Ways to Control Inventory in the World of Lean Retailing

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.

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Business Warehouse Management

How Technology is Propelling the Growth of D2C Brands

Brands that have a well-established presence among their customers can benefit significantly by opting for the D2C route of marketing. In the US alone, D2C sales are expected to reach $175 billion by 2023.  Even new and emerging brands find tremendous merit in D2C marketing as they wish to gain better control over their brand, eliminate the intermediary and acquire complete ownership of the customer’s journey. Technology has helped build a strong foundation for D2C brands to promote business growth:

– Emergence of easy SaaS-based website development platforms like Shopify, Magento, etc. have made it easy for merchandisers to open their own stores. 

– Quick preintegration with marketplaces have made it easy to expand the network and reach. 

– Smooth integration of SaaS-based, cloud-hosted Tech solutions help analyze demand and inventory levels.

Benefits of D2C

  • D2C enables brands to gain complete ownership of the value chain as well as the customer experience. They can create on-brand experiences throughout the customer journey and build rapport without having to rely on intermediaries. 
  • In a business world dominated by data, D2C gives brands a unique opportunity to capture comprehensive information about their target customer groups, thus enabling them to craft the right products, services, and communications.
  • Logistically, D2C makes a lot more sense as brands can directly reach out to their customers if they have a healthy online presence. It may even result in lower costs and better margins for the brands.
  • D2C is in line with the emerging trend of omnichannel commerce which allows customers to interact with the brands through multiple touch-points. Intermediary platforms like Amazon can hardly be expected to provide omnichannel services for each individual brand.

Challenges in going D2C and how technology is helping brands solve them

While D2C enables brands to retain and consolidate their identity and reach out to their customers directly, it also comes with its fair share of challenges. 

One such challenge is the direct confrontation with retailers who invariably have well-established marketing and communication channels. Brands pitting themselves against these intermediaries could get bogged down, as they will have to invest heavily in the marketing efforts that would otherwise have been borne by the intermediary.

But many of the challenges that D2C brings forth can be tackled with the help of technology-driven solutions. 

  • Maximizing the reach: Exposing 100% inventory and maximizing reach through a brand’s own website and multiple marketplaces through a single tech platform.
  • Real-time inventory-order sync: To ensure 100% of orders are captured and there are no cancellations due to overbooking.
  • Cloud warehousing: Possibility to outsource warehousing, without CapEx, to Industry experts and 3PL providers. This allows brands to build a strong warehousing network to capture customers at every point of sales.
  • Efficient and error-free fulfillment: Efficient warehousing is ensured with the use of technology and automation. Automation of processes helps minimize human decision-making errors and delays in order fulfillment. Digitization of inventory ensures 100% traceability and prevents wastage or loss of products in the warehouse. 
  • Simple UX/UI and easy accessibility: Ready dashboards to view brand, SKU & style performance at individual stakeholder levels from warehousing manager to Brand CEO. 
  • Reports of actionable insights: Easy to generate reports for analysis. Understanding channel performance and brand performance so that quick revisions can be done. 
  • Returns management: Easy returns analysis to capture the actual pain points and address them to minimize future returns. Rapid recommence to ensure maximum sales.

The emergence of D2C aggregators (Thrasio-style business model) in pushing the growth of D2C brands

A new trend on the D2C horizon is the emergence of Thrasio-style D2C aggregators that acquire new promising brands and help them expand. These brands often lack the support and technical know-how which is provided by the acquiring company. The companies also offer a common base of infrastructure that helps them support multiple brands. Besides, smaller brands also get ready access to technology upgrades which is essential to survive in the highly competitive marketplace of today. 

Companies like Perch, Moonshot, GlobalBees, Mensa Brands, G.O.A.T Brand Labs, etc. are following the footsteps of Thrasio to power the growth of D2C brands. Thrasio-style aggregators identify brands that are doing well on marketplaces and acquire them to provide expertise in marketing, brand development, and supply chain management, thus pushing for exponential growth. Having a coherent customer base, quality niche products, and a Thrasio-style backer now seems to be the perfect recipe for creating a successful D2C brand.

D2C is one of the fastest emerging trends on the e-commerce horizon. All that brands need is the ability to scale faster with the help of best-in-class technology as well as some Thrasio-style financial backing. While the challenges are many, D2C as a trend is coping well to create a level playing field for smaller and newer brands.

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Business Technology

5 Growing Technology Trends Reshaping the Retail Industry

Cutting-edge technology has left no sector of the economy untouched and is turning out to be one of the biggest drivers of efficiency, customer experience, and profitability. In the last few years, the retail industry has also been experiencing some transformative technological interventions that are reshaping the way business is done.  At the very heart of this transformation is the growth in ICT (Information & Communication Technology) and digital technology. This is going to have an impact on how the industry will evolve in the coming years. In this blog, we talk about the top 5 technology trends that are at the forefront of this global transformation in retail.

  1. Omnichannel retail

Omnichannel retail seeks to provide an unprecedented number of options to customers in terms of shopping and delivery. It puts customers right at the center of the retail process. Omnichannel allows customers to interact with the brand at multiple touchpoints and switch between channels while shopping for products. Customers making a purchase on a brand’s social media page can pick up the product from their brick-and-mortar store.

Omnichannel provides customers a consistent shopping experience across diverse platforms, both online and offline. This however creates new challenges for brands at the backend and compels them to be more agile and flexible with their fulfillment process. 

Omnichannel is driven by a robust technology infrastructure. Connecting all the retail channels and integrating the assortments of all warehouses and stores is essential, and is done using automation-backed solutions. Inventory barcode and serialization facilitate easy tracking of items as they move fluidly across channels. Likewise, analytics and automation help position products at the right locations which helps reduce delivery time as well as logistics costs.

2. Need for immediate gratification

As new players enter the retail fray, customers are spoiled for choice, not just in terms of product options but also in the speed of delivery. Same-day delivery is gradually paving way for delivery within a few hours’ time. This requires rethinking the product placement and logistics on the part of the brands.

Accurate forecasting and data analysis, coupled with automation, can help brands make better decisions and place the right products close to their customer base. In-season sales and inter-warehouse transfers can further help meet the changing demand of the local market. More and more brands are now opting for distributed warehousing and on-demand warehousing, allowing brands to place the most sought-after products as close to customer clusters as possible.

3. Automation of processes to reduce dependence on skilled labor 

One of the most formidable challenges that companies faced during the pandemic was the shortage of skilled labor. This often made handling of equipment and technology difficult as most of the workforce lacked adequate training. 

But with technology solutions like Increff WMS, there is a greater role for automation and much lesser reliance on a trained or skilled workforce. The UX/UI is often very simple and easy to use. Besides, the automatic pop-ups act as warning signals in case of any errors in the input, and prevent the user from advancing, unless the error is cleared at each step. This means just about anyone with basic training can operate the system and keep the show running.

4. Meaningful partnerships for value addition and hyper-localization

The hyperlocal delivery industry is expected to grow up to $3634 billion by 2027 at a CAGR of 17.9% between 2019-2027. An increasing number of brands are now relying upon local partners for their last-mile logistics and other specialized tasks. 

Hyperlocal partners are most effective in supplying goods like drugs and groceries that require quicker fulfillment. They reduce the reliance on the larger supply chain and provide for better business continuity in case of disruptions elsewhere. However, establishing a meaningful partnership with hyperlocal players means brands must integrate with them seamlessly on a robust technology platform, making them a part of their supply chain.

5. Sustainable retailing

Using technology and automation to route goods through the shortest possible pathways means savings for brands and other stakeholders, and also reduced levels of emissions. Greater levels of accuracy mean the reduced likelihood of returns and therefore elimination of additional transportation. By leveraging options like distributed warehousing and placing goods closer to the customers, brands are also able to create shorter supply chains, maximize sales and boost sustainability in retail for a better future. 

With technology as the main driving force, these crucial trends are all set to reshape the retail industry and make a lasting impact on how the business is going to evolve from here on. Quite evidently, these trends are expected to create value for all stakeholders, including the environment.

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Business Smart Merchandising

Inter-store transfers; An inventory optimization solution

You have probably heard about the concept of inventory optimization, but do you know how to make the most of it?

Inventory management is a tricky business. Too much inventory and you are tying up valuable resources that could be used elsewhere, too little inventory and you risk losing sales. What if there was a way to optimize inventory to always have just the right amount in hand? A way to ensure ideal inventory at all times?

Maintaining the right quantity of inventory required to meet demand, keeping logistics costs low, and avoiding common inventory issues such as stockouts, overstocking, or deadstock — make optimized allocation and replenishment in inventory management essential for any retail business. Store-to-store or inter-store transfer effectively manages seasonal and geographical demand fluctuations and is an effective way to optimize inventory. 

How does Inter-store transfer (IST) optimize inventory? 

Demand forecasting is vital for any retail business, but it is not perfect. Demand forecasting often fails, resulting in too much or too little inventory. One way to mitigate the risks of demand forecasting is to use store-to-store transfers to optimize inventory. Inventory management is a crucial part of any retail business. Too much inventory can tie up capital and lead to stockouts, while too little can result in lost sales. Inventory optimization is the process of finding the perfect balance between these two extremes, and store-to-store transfer is an effective way to optimize inventory. 

This technique also ensures that all stores of the retailer have the right mix of products in terms of colours, sizes, fit types, etc., while reducing overall inventory levels and costs. It also improves customer service levels by reducing stock-outs and increasing the availability of products. Overall, it is a powerful tool to help retailers improve their inventory management and bottom line.

Optimize seasonal inventory management with IST

There are several benefits of using inter-store transfers to optimize and better manage seasonal inventory. The very concept of a season has been re-defined in modern retail. Some retailers choose the conventional path of four seasons in a year, viz, Spring, Summer, Fall, and Winter. At the same time, retailers like Zara do twelve seasons in a calendar year, which means new stocks in the stores every month. With significant variations in climatic conditions within a country and during the same period, a store in a warmer climate could be selling more of a different product type than a store in a cooler temperature. Real-Time Data analysis can enable timely Inter store transfer to ensure that stores have the right inventory to meet customer demand.

When inventory is not selling at one location, it can be transferred to another site where it is more likely to sell. This helps businesses avoid the cost of storing excess inventory and better utilize their space.

The Role of technology in Inter-store Transfers

  • Technology Solutions to ease inventory optimization

Technology solutions can help retailers optimize their inventory levels and improve customer satisfaction. Inventory management software can provide insights into customer demand patterns and help retailers plan inter-store transfers to avoid stockouts. 

With real-time data and automated processes, retailers can quickly and accurately identify where inventory needs to be transferred to optimize their overall inventory levels. 

Additionally, tools like predictive analytics can help retailers anticipate trends and plan inter-store transfers accordingly, further enhancing customer satisfaction levels. 

The right technology solutions help retailers:

  • Analyze demand patterns and make recommendations
  • Conduct new-season and mid-season replenishments, 
  • Automate replenishment of fast sellers, 
  • Adjust inventory for seasonal changes and spikes, 
  • Consolidate stock sizes between stores 
  • Avoid stock-outs or over-stocking in any particular store or season

Critical Advantages of Inter-store Transfers

  • Minimizes Dead Stock, i.e. inventory that sits on shelves and never sells. It is a waste of money and resources, as it ties up valuable space in your store. Transfer inventory that is not selling in one store to another store where it might sell better.
  • Helps reduce stockouts or overstocking in stores. Ensure your inventory is constantly moving and never stuck with inventory that you cannot sell.
  • Enhances ROS by making the right product available at the right location 
  • Helps manage seasonal demand spikes
  • Supplements mid-season replenishments 
  • Better inventory turns by allocating stocks in the most appropriate locations 
  • Enhanced customer satisfaction

There are a few things to keep in mind when using Inter-store Transfers. 

First, it is essential to have a good understanding of your inventory levels and needs. Second, Store-To-Store Transfer should be used in conjunction with other inventory management techniques, such as just-in-time (JIT) production and Kanban systems. Adopting a robust inventory management solution with JIT, Kanban, Allocation & Replenishment, etc., tools built-in can make Inter-Store Transfers easier.

Finally, Store-To-Store Transfer may not be a panacea for all inventory problems. Still, it can be a valuable tool in your inventory management arsenal when used efficiently with the help of intelligent software solutions available today.

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Business

Successful Omnichannel Strategies for E-commerce

As retailers increasingly switch to multi channel order fulfillment, they reinvent the supply chain to enhance asset monitoring, outbound & inbound storage, returns management, and distribution of goods. To survive this fast-paced retail environment, retailers need cutting-edge technologies for end-to-end visibility and inventory accuracy to enhance operational efficiency, optimize allocation, and boost turnover.

Improve traceability using inventory tracking software

Inventory serialization with barcodes significantly reduces human errors and enhances operational efficiency by digitizing data collection and process. Barcodes store the complete history of an item to improve tracking efficiency and error accountability. 

  • Serialization enables retailers to effectively manage orders, inventory, and shipments. Since each product has a unique barcode, its identification becomes simpler and more accurate. 
  • Barcodes help locate items easily within a warehouse and provide insights into the movement of inventory.
  • Barcode and RFID contribute significantly to productivity as they automate tasks thus reducing manual efforts, human errors, and the need for paperwork. 

Build your network strategically

As customers expect same-day deliveries, retailers operating across multiple channels find it extremely challenging to catch up. There is a need to distribute inventory according to regional demand and build shorter supply chains for better demand and supply management and reduce pressure.

  • Strike a balance between CapEx and OpEx: Retailers must selectively and strategically expand their network of warehouses and distribution centers, to keep CAPEX and OPEX under control and increase the speed of delivery to customers across channels and geographies. This is very important as setting up high-capacity warehouses costs a lot. Opting for urban or market-fulfillment center strategies, such as dark stores, and dedicated fulfillment locations helps meet their strategic objectives. 
  • Leverage automation: Refining analytics and automation to better position your inventory in key markets can be highly instrumental in reducing delivery time and logistics cost to customers. Serialization enables faster, accurate order picking and facilitates express shipping of priority orders. With 100% inventory exposure across all sales channels, retailers can significantly increase their ability to maximize sales.
  • Ensure faster fulfillment from the nearest location: By processing orders from the nearest possible location (store or warehouse), the order time to the customer is significantly reduced. Regional fulfillment begins with a pre-season forecast and planning of inventory on the basis of local demand. In-season sales are then optimized with inter-warehouse transfers to meet the changing demand in a particular region. Likewise, distributed warehousing allows retailers to ensure greater supply chain flexibility and agility, and to prevent a broad-based impact across the market in case of disruptions in one location.
  • Build last-mile partnerships: Finally, to complement efficient warehousing, brands need reliable, last-mile delivery partners for faster customer service. Partnering with regional carriers and expert tech providers consistently enhances delivery standards. Such value-adding partnerships and collaborations help address last-mile challenges with greater effectiveness in the future.

Inventory vs marketplace model for inventory management

In view of the growing trend of omnichannel retail, an important strategic decision for new entrants in terms of choosing a marketplace model vs an inventory model. With D2C business gaining momentum around the globe, there is increasing popularity of marketplace-led models for inventory management. 

In the inventory-led inventory management model, large multi-brand retailers source products from merchants and stocks them. The marketplace model on the other hand, simply acts as a meeting place for buyers and sellers, although it offers shipping assistance by partnering with selected logistics players. The marketplace model is in line with the much preferred zero-inventory policy. It is investor-friendly, highly scalable, and gives brands greater control over their inventory and customer data. 

Use omnichannel for expansion, efficiency, and higher CX 

A successful omnichannel strategy puts customers in the driver’s seat. In fact, 53% of leading European retailers implement an omnichannel strategy because it improves customer lifetime value. With omnichannel, retailers can reach new customer segments and realize exponential growth in their business due to plenty of flexibility and convenience.

Operational efficiency is one of the major challenges in retail supply chain management. With the omnichannel strategy in place, retailers have a holistic overview of their market and there is no need to create or implement separate strategies for each channel. By gaining better visibility and exposure to their inventory, retailers are able to increase inventory turnover, optimize stock levels and automate replenishment. This avoids losing business due to out-of-stock scenarios. The most significant benefit of omnichannel retail is increased sales and revenues. Having the right strategies in place to tackle the challenges inherent in omnichannel retail is crucial. Which strategies retailers opt for depends on their business objectives, constraints, assets, and leadership outlook.

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Business Smart Merchandising Technology

How Dynamic Pricing Strategy Can Help Retailers

As consumers started shopping online and omnichannel, price is playing an important role. The internet gives consumers the ability to compare prices instantly. A slight change increase or decrease can mean a customer lost or gained. Hence, the concept of dynamic pricing, or high-low pricing is quickly gaining attention. 

What is dynamic pricing? 

Dynamic pricing is a compelling retail price optimization strategy that can help retailers run their business profitably while keeping up with the competition across channels. To put it in simple words, dynamic pricing is changing the discounts, or markdowns, on the price of products based on their KPIs. It is also called demand pricing, dynamic markdown, time-based pricing, or surge pricing based on its application in different markets.

One of the most common examples of this pricing strategy is the end-of-season sales. While off-season merchandise is sold at discounted prices, goods that are not affected by changing styles or weather can be sold at a constant price or minimal discounts. 

Dynamic pricing strategy automates price adjustments based on data-driven algorithms fuelled by personalized information provided by each retailer. Factors like demand changes, inventory, and competitive data are also considered. To be successful, dynamic pricing needs to combine the age-old wisdom of the retailer with machine learning and adaptable software. 

How does it help retailers? 

Though the first advantage that may come to mind is increasing profit margins, there are many benefits of implementing dynamic pricing. 

  1. Create demand to keep the stock health and age in check

A rightly priced SKU, at the right time, can help boost sales. This helps in keeping in the freshness of stock and the availability of sizes/variants of a product. Products that are either discontinued, near expiry, or meant to last only for a specific period, need to revise selling price as per their planned lifecycle. If a retailer is handling this manually across categories and points of sales, it can become near impossible to track and monitor. With the right dynamic markdown algorithm, prices can be tweaked to control the sales of a product. 

  1. Understand your customers 

Collecting data is a key part of implementing automated dynamic pricing. This lets retailers gain insights into the consumer’s behaviour, patterns, and preferences. It can translate to more actionable data which can feed your algorithms to perform better, leading to an efficient pricing strategy. 

  1. Make informed decisions

Implementing dynamic pricing allows brands to access real-time pricing and demand trends. This can help make informed decisions on the price change of a particular product or category. Knowing the competition’s price trends ensures products are priced just right which aids in increasing sales and profitability. 

  1. Reflecting demand 

The digitally savvy consumer is often aware of changes in price as the demand for a product changes. Many a time, they are also willing to pay a premium to get exclusive access to a product. Similarly, it is known to them the prices of seasonal goods will change as the weather changes. Dynamic pricing lets you reflect the demand of a product at its price without compromising on the brand image. 

  1. Increase revenue and profits with a healthier working capital

One of the most significant outcomes of using dynamic pricing software is to take into consideration demand and supply, competitor strategies, and price fluctuation in the market. All of this data is crunched in real-time to deliver an optimum price for staying profitable. Dynamic pricing can be used to lower prices to increase sales, meet sales targets and avoid the accumulation of deadstock, thereby freeing up choked cash for the retailer. 
Try Increff Dynamic Markdown tool to gain deep insights on simple targeted solutions, to complex pricing problems without compromising on your brand value. Its smart algorithm recommends ideal markdowns along with the restocking strategy to ensure profitability and higher revenues, in the fastest time. Learn more about the Dynamic Markdown tool here.

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Business

Sustainable Fashion: A fad or the future?

Our global fashion industry has been heavily criticized for causing irreparable damage to the environment. A recent study, April 2020, published in the Nature Reviews Earth and Environment, states the annual impact of the fashion industry is over 92 million tonnes of waste and 79 trillion liters of water consumption alongside chemical pollution and CO2 emission. The glossy facades of fashion stores hide a huge environmental cost we are paying to set them up which is life-threatening and cannot be ignored now. 

Gone are those days when clothes were made by hand and fashion was for the richest in society. With the mechanization of the industry, manufacturing clothes became faster and cheaper, and fashion was introduced to the masses. The use of cheaper synthetic fabrics became abundant and the industry transitioned from a circular economy, producing no waste, to a linear model where only 1% of textile waste is recycled into new clothing. The luxury brands produce a fine quality style, which is copied in fast fashion at a lower quality. Each year more than 100 a billion garments are made and $450 billion worth of fabric is thrown away, globally.

Where there used to be two seasons, Spring-Summer and Autumn-Winter, now there are fifty. There is an over-supply of fashion where companies have gone from offering two collections per year in 2000 to five in 2011. Brands like Zara and H&M put out 24 collections per year and 12 to 16 respectively. Some fashion brands have taken the route to sustainability in sourcing and supply chain, but 85% of textile still ends in dumps every year. 

Managing fashion inventory is a challenge because products have a large width and low depth. Since planning becomes difficult, the stock ends up piling up due to wrong buying, and to get rid of it brands liquidate sales, leading to margin losses and stuck working capital. 

What can Brands do under these circumstances to help the industry become more environmentally friendly? 

  • The transition from fast fashion to slow fashion by optimizing manufacturing volumes. Analyze true demand potential to prevent stock-outs and increase customer satisfaction, and use smart-tech merchandising and WMS tools to ensure proper oversight on merchandise from the moment it enters the warehouse. 
  • Expose 100% inventory to ensure all channels increase the visibility of long-tail merchandise and no piece is left behind.   
  • Build sustainable partnerships in the supply chain for higher efficiencies.  
  • Donate unsold good-quality clothes for a cause to the needy

What can we do as Fashion consumers?

  • Buy good quality clothes so they last longer
  • Open to buying pre-owned good quality clothes 
  • Donate used good-quality clothes to the needy

Increff sustainable cloud-based solutions are built for inventory optimization for both online and offline channels. While Increff WMS allows simultaneous 100% live inventory-order sync for online brands, Increff Merchandising Solution analyses, as recent as, yesterday’s sales data to determine the right product assortment and demand-wise allocation of merchandise for optimum sales and maximum revenue.

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Categories
Business Smart Merchandising

Do you know what Zara and H&M do to be on the best-in-class Supply Chain list?

An efficient Supply chain streamlines everything from sourcing raw material to delivery of the final product, adjusting and adapting to unexpected situations on the way. It not only gives brands the ability to diagnose an operational glitch and address it at the right time but also be more responsive towards societal needs. In the current scenario when the competition is high, a sustainable supply chain is a source of competitive advantage to boost customer service, reduce operating costs, and improve cash flow. 

Gartner’s Supply Chain top 25 list is the distinguished ranking of brand leaders, recognized for their achievement and advancement in supply chain capabilities. For this list, brands are evaluated on business health (ROPA, Inventory turns, Revenue) and Social responsibility metric (environmentally responsible supply chain). 

Only 2 Fashion brands have made it to the list so far, they are Inditex or Zara, and H&M. Zara has been on the list since 2010 and H&M since 2012

What makes them a class-apart? 

Their innovative demand-driven business model is centered around the customer’s decision-making process. The specialized real-time, demand shaping, and demand sensing tools help them immediately respond to market changes, increase flexibility, and speed of bringing innovative designs to the market. Zara offers 24 new clothing collections and H&M offers 12 to 16 collections each year.

Zara’s RFID technology ensures accurate inventory count and faster deliveries to the end consumer, while H&M through Treadler, its B2B service, helps clients accelerate sustainable change by overcoming internal barriers and accessing benefits of its global long-term supply chain partnerships for viable growth. Businesses today are not only implementing best-in-class technology to meet true customer demand but also building sustainable partnerships for Industry and environmental benefits. 

How can you join the leader’s pool?

INCREFF’s sustainable, cost-effective SaaS solutions, WMS, Cloud Warehousing, and Merchandising are built for inventory optimization for both online and offline channels. Our cloud-based platforms are extremely easy to learn and use, without supervision. The best part is, we can get you started in less than 7 days. 

Increff WMS allows simultaneous 100% inventory exposure across all sales channels, so no piece is left behind. Its live-inventory sync feature captures instant sales even during peak time so your potential buyers know the exact availability and there are fewer cancellations. Low cancellations deliver a better customer experience, add value to the brand and build trust. 

While Increff WMS is a fully automated and scan-based tool in itself, Increff’s Cloud warehousing service that runs on Increff WMS lets brands have on-demand access to warehouses in multiple cities. There is no use of paper & pen and no human decision-making to minimize errors or delay in execution. Each piece is assigned a fully trackable unique piece barcode (UPB), which is more accurate than RFID. Once scanned, the location of a piece is recorded and referred to when pick-paths are defined at the time of order picking. Pick-paths are linear so there is no back and forth, and the picker’s time is most efficiently utilized. Return processing is fast and strict as the rejected piece is immediately moved out of circulation and its UPB is tagged with the reason of rejection. 

Increff Merchandising Solution is a cloud-based intelligent merchandising, buying and distribution platform that enables merchandisers to take pre-season and in-season decisions like what, when and how much to buy and where to showcase inventory via 100+ customizable patent-pending algorithms designed specifically for fashion and lifestyle business. For online sales, it analyses order location and distributes stock to ensure fulfillment from the local warehouse, reducing air shipments and logistics costs by nearly 70%.

The Global fashion industry has been heavily criticized for causing irreparable damage to the environment. Luxury fashion brands prefer to burn millions of dollars worth of clothes to prevent counterfeiting and protect intellectual property. We can help you protect the environment through our initiative of donating unsold inventory to the needy who cannot afford to buy good quality clothes.  

If you are sitting on a large pool of inventory and looking for a smart tech-tool that can help your brand realize its true demand potential, then you have reached the right place. Contact us today!