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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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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!

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Business

Incredible E-commerce Sales Performance with World’s Best WMS

Increff is the leader in retail technology innovation. With cutting-edge solutions for boosting both offline and online sales of fashion brands, we ensure immediate order processing, real-time inventory update across multiple channels, and efficient order fulfillment

Steve Jobs once said, “You’ve got to start with customer service and work back on the technology – not the other way around”. This ‘experience first‘ approach of addressing customer needs still holds true for retailers but for customers, it has flipped to ‘Buy first & Experience later’.

Growth in e-commerce & increase in competition

With an increase in internet penetration and local campaigns like ‘Make In India’ and ‘Vocal for Local’ gathering momentum, a large number of National players are competing with Global brands on the same platform. With a world of choices at their disposal, customer loyalty is always at stake. As infinite brands chase a finite measure of customer attention, demonstrating skilled supply chain competencies is an ideal way of creating a competitive advantage. A terrific post-purchase experience is a great source of brand recall.  

As e-commerce becomes part of daily life, its unsaid expectations are set in every shopper’s mind, which are; variety, trust in quality, efficient delivery, and payment security. While brands are known for their products, they are always remembered for their service. As brands take care of the on-portal experience, Increff ensures a smooth post-purchase journey. 

Their leading software, Increff WMS is designed to handle flawless e-commerce order fulfillment journeys.

A recent classic example is LIBAS’s spectacular performance in Myntra EORS this year. Within 15 days of onboarding LIBAS, powered by Increff WMS, inwarded ~500 K pieces across 2 warehouses and dispatched ~170 K orders within 3 days achieving 99.9%+ SLA. It earned the esteemed fAssured quality badge from Flipkart and an Amazon Prime status for perfect delivery. 

Want to experience the world’s simplest, most accurate, and the best warehouse management and fastest order management cloud-based platform, click here.

Contact us today to start your incredible upward journey!