Brands: when you list a product at retail, your control immediately becomes compromised. You rely on your retailer to keep shelves stocked and product available – after all, you can’t be there to monitor it 24/7. Supply chains are becoming increasingly complex, as they now span multiple channels (including online) that need to be fully integrated to maintain accurate assessments of inventories. Inventory management issues happen everywhere, no matter the size of the store.
In an attempt to deal with issues, many retailers have inventory management systems in place and provide auto replenishment to brands. If a particular product or SKU falls below a minimum instore, it is automatically replenished (ordered through distribution). However, if product goes missing thanks to theft, damage, miscounts, etc., these inventory counts become incorrect. If something is showing as available in the system instore but it’s actually not there it will not be reordered – meaning shelf space that is empty. This is a big problem.
How big? According to a study conducted by IHL Group, a global research and advisory firm for technologies deployed in the retail and hospitality industries, retailers around the world lost well over half a trillion dollars in the past year due to out-of-stock inventory. Yes, we said big – and we meant it!
However, what if you (and the store) are not really aware of the issue? If the shelf becomes empty, and there is no stock to replace what has been sold (even when the system identifies product instore), this can mean lost sales and losing your shelf space and distribution. Make sure that you are aware of what is taking place on the floor by conducting a retail audit on a regular basis.
One of the best ways to deal with inventory management issues is to first identify the problem. Training, employee shortages, forecasting, even a lack of communication through the various channels can lead to problems. Starting out by finding the root cause of the issue is the best way to combat it.
Ok, so a retail audit has identified a problem, and you’ve found the root cause. The next step is to take action. If the problem is an easy fix, make sure that you fix it (common sense, we know). If, however, the problem requires resources that you may not have at your disposal, take advantage of the services of a retail merchandising company that offers control over inventory management issues. Ensuring shelves are well-stocked, inventory numbers are correct, and that no deficiencies exist are ideal ways to eliminate losses due to inventory complications.
At Storesupport, we deal with righting inventory wrongs on a daily basis. For all types of bricks and mortar stores, we can make sure that your product is on the shelf at every location – both on the sales floor and in the back room. Don’t let incorrect counts hurt your sales – call us today at 1-877-421-5081.