As an established retailer, you always carry multiple styles and sizes to meet 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, money to buy new stock, and minimum display requirements added to regional demand predictions, determine how this stock will be distributed across a chain of stores.
“If only we could time-travel into the future, rearranging stock will not be required!“
In situations when you know you have stock that is present in another store where the demand is not so much, or when the fresh inventory becomes leaner in terms of both width and depth, inter-store transfer plays a critical role. It is a process of re-filling pre-purchased inventory, balancing the quantity between 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:
- Improve inventory health – Boost sales of slow-moving articles by reallocating them to top-performing stores.
- Increase inventory turns – Increase sales of available stock by redistributing its basis true in-season regional demand.
- Improve stock cover and reduce stock-outs at SKU level – Minimize loss of sales by identifying the true Rate of Sale (ROS) for every SKU at the store-level. Ensure there is no over-stocking nor understocking anywhere which directly impacts the top line and margins.
- Increase full price sell-thru – Push stock from the stores with lower footfalls to those with higher footfalls and higher bill value. This directly increases the chances of selling at full price, thus impacting the top line and margins.
- Reduce brokenness: Minimize the broken stock (styles with only fringe sizes available) by consolidating broken stock from all the stores and transferring full-size sets to the ones where the likelihood of selling is maximum as per the latest trends.
- Improve Omni-Channel distribution: Identify the right stock to be pulled out of Offline stores and transfer them to the Click and Collect stores or other stores that can be used as hubs for online fulfillment.
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.