In-store inventory: Curating to compete against ecommerce’s endless aisle

 

 

One of the most difficult things for a retailer is understanding what items to have in-store and which could be successfully handled in online as part of an endless aisle strategy.

For brick and mortar retailers, physical in-store space is finite, and what’s available must be used effectively.

That is particularly challenging as brick and mortar retailers face the vast breadth of inventory that ecommerce competitors offer.

However, sometimes that enormous ocean of product can overwhelm customers.

 

Get insight into inventory

 

Traditional retailers can augment what’s in-store with online offerings, but one of the highlights of being brick and mortar is the ability to offer “look and feel” in a curated environment.

The “inner sanctum” of any retail store is the inventory area.

Making the most of that space will save any retailer money.

Storing inventory and supplies in a warehouse comes at a cost, especially if it eats away at display/retail space. Off-site inventory incurs rental and transportation costs, as well.

However, retailers must have “the right” inventory on hand so shoppers don’t leave stores empty-handed.

Retail inventory management keeps the backend in line with the front-end’s needs.

Good retail management software helps you see:

  • The quantities of each product in stock
  • A sense of when reordering is necessary
  • The number of items that should be ordered regularly
  • Best selling items
  • Items that are unpopular
  • The amount of inventory on-hand is adequate
  • If overstocking is a concern
  • If your inventory space is not big enough

Getting a handle on inventory management affects a business’ bottom-line, allowing it not only to continue operating, but also to grow.

Without a strong inventory management process, it’s easy to lose track of stock.

Mismanaged items are more easily stolen and seem to vanish without a trace – precisely because there is no traceability.

In a worst-case scenario, a retailer spends money on unknowingly replacing stolen goods, while paying to store an item that was ordered to replace a product that was never actually sold.

Additionally, not having a firm grasp on inventory levels can also mean running out of stock more easily, missing sales opportunities.

Today, many retailers offer a buy online, pickup in store option.

Not having inventory in sync with on-hand counts is a customer experience disaster.

In addition to keeping accurate inventory numbers, some stock management can be handled within the product displays.

The cost of storage depends upon the amount of inventory needed to be stored.

Planograms, or the blueprint of a store’s layout, can help retailers improve sales with visual merchandising.

 

Digitize the in-store experience

 

Today’s shoppers are used to a much higher level of convenience, choice and accessibility than in the past, because of the influence ecommerce has had on retail.

Therefore, it’s important for stores to “digitize” by providing personal recommendations, customer reviews and increased assortments, so that when customers enter a physical store, their expectations are met.

Planograms help to arrange merchandise in a way that catches the customer’s eye, organizing in a way that provides more room on your shelves, and helps estimate how much to place on the sales floor.

Brick and mortar retailers should focus on effective use of inventory space.

Too much is as detrimental as too little.

By employing retail management technology to count and manage products, they can offer what customers want, when they want it, while maintaining a healthy profit margin.

 

 

 

How retailers are actually spending their customer service dollars

 

 

When companies describe themselves as having "excellent" customer service, the claim sounds user-centered but too often it's actually just a company-centered focus trying to position themselves as user-centered.

Those companies are generally concerned with efficiency and reducing costs first and foremost, and are just hoping to improve customer relations by osmosis, without actually doing the work to get there.

 

Questioning ROI on CX investments

Some retailers resist customer experience investments, believing they do not provide a significant return on investment.

However, Gartner reports that when it comes to making a purchase, 64% of people find customer experience more important than price.

Constantly trying to be the lowest-price provider of goods is futile: Competition is steep and low price is not an effective means of cultivating loyal customers, who are the foundation of success.

According to a Walker study, by 2020, customer experience will overtake price and product as the key brand differentiator.

Customers are loyal to a retailer because they believe they are getting a better experience, higher value and benefits than they would get from other brands.

In addition, a recent study from RetailNext found 57% of respondents said customer service is the only reason they go to a retail store.

Not selection, not price, but service.

Here are 4 pairs of categories in which retailers invest their customer service dollars. You decide which ones will actually create better customer experiences.

 

1: Self-service tools vs well-trained sales associates

Shoppers like that expect to find associates equipped with the information and training necessary to assist shoppers and close sales.

Too many retailers do not have that staff, so customers are frustrated and disappointed.

Today's shoppers want knowledgeable associates in the stores they frequent, as well as convenience. They also want to build a relationship with the retailer.

Retail management misreads customers’ disdain for associates as a desire for self-service.

But customers are happy to be served by well-trained, engaged salespeople. The frustration comes when the associate knows little about the product or has no enthusiasm.

Training goes a long way to fix that problem and helps build a sales team that is a contributing factor to customer loyalty.

 

2: Market saturation with new locations vs pop-up stores

While some brands focus investment toward market saturation via geographical expansion, others use pop-ups to build excitement about their brand.

Event-and experience-driven retail is becoming more popular, as department stores create pop-up locations or marketplaces in their stores and in hip shopping meccas.

Such temporary installations are smaller and more focused with their offerings and are replenished much more frequently, creating the impression of a “fresh” experience at every visit.

 

3: Promos to attract new shoppers vs rewarding repeat customers

Newvoicemedia.com reports that the top reason customers switch away from products and services is that they feel unappreciated.

Once customers have demonstrated their loyalty, it's important to reward them.

Too many retailers use incentives only to attract new customers. That, in effect, "ignores" loyal customers, leaving them frustrated and unappreciated.

 

4: Advertising costs vs experiences that drive WOM marketing

Nurturing existing customers and improving customer service can cost considerably less than launching advertising and marketing campaigns, but can have just as powerful an impact.

As Tony Hsieh, Founder and CEO of Zappos has said, “We take most of the money that we could have spent on paid advertising and instead put it back into the customer experience. Then we let the customers be our marketing.”

75% of Zappos' sales come from returning customers, and the company earns more than $2 billion in sales annually.

The Zappos's commitment to having happy customers and employees ends up being good for business.

 

Walking the customer service walk means more than just talking the talk.

Strong training, with an emphasis on earning customer loyalty, will result in a truly user-oriented business.

 

3 POS capabilities retailers need to give shoppers what they want

 

Pleasing shoppers is simple: Give them what they want.

It’s simple… it’s just not that easy.

Here are three things every retailer needs for controlled inventory that helps you get customers the goods for which they come to you.

 

1. Inventory accuracy

With Retail Pro, you can improve inventory accuracy, so you don’t lose sales due to out of stock or mismanagement.

You can see exact inventory location down to the bin.

With integrated RFID, you can see location of individual inventory items within a 6-foot diameter in the store or warehouse.

 

2. Real-time updates & reporting

Real-time communications in Retail Pro help your records keep updating throughout the day so managers are always on top of sales trends and proactively replenish stock.

With deep reporting capabilities in Retail Pro, managers can evaluate core KPIs and make needful adjustments in their store-level operations to ensure the store stays on track for sales performance.

 

3. Send sale & store fulfillment

Because you can see inventory at all locations from your Retail Pro POS, sales associates engaging shoppers can check inventory availability at other stores.

Associates can help customers get what they need by helping them order online or by sending the sale of an item to a different store.

The item can then be delivered to the customer’s home or to their nearest store location for in-store pickup.

That means customers never leave your store without having their needs met.

 

Put shoppers first

Keeping inventory operations is critical for reinforcing the trust and expectation shoppers have of your ability to get them what they need.

Efficient store operations capabilities in Retail Pro help you take control of inventory, so shoppers won’t leave disappointed.

Request a consultation or talk to your Retail Pro Business Partner today to learn more about store operations capabilities in Retail Pro.

 

 

The first step to recognizing customers with AI

 

 

Retailers are increasingly looking to AI to unlock insights that will help you better reach customers.

AI learns from your data to help you recognize customers and anticipate needs – but the conclusions AI will generate are only as accurate as the data that feeds it.

Business author Luis Perez-Breva comments in his article, Why retail’s artificial intelligence bet is all wrong, “Machine learning needs vast amounts of data that needs to be formatted and cleaned for use. Computers aren’t good at automatically cleaning data; humans are.”

With Retail Pro, you already have a solid foundation of structured data.

And, since Retail Pro is a platform software, it acts as the foundation to which you can connect all your other retail technologies, including ERP, WHM, dropship, ecommerce, CRM, email & SMS marketing, loyalty & rewards, and any other technology you use.

When connecting these data sources, your IT team already does the heavy lifting needed to clean and structure your data – so why not make the most of it?

With all your data connected on the Retail Pro platform, you can recognize shoppers and see their activity across channels.

By recognizing your customers and knowing their past purchases and preferences, you can better anticipate their expectations and make your outreach more relevant to their needs.

Request a demo or talk to your Retail Pro Business Partner today to see how you can unify data in Retail Pro for a more holistic picture of your business that helps you anticipate your customers’ needs.

Streamline retail operations with integrated POS and ERP data

 

 

Retail is alive with changing trends like omnichannel that give your customers more ways to shop your stores.

With more ways to get your goods into shoppers’ hands, smart inventory and operations management across channels is becoming a bigger focus for serious retailers.

Integrated Retail Pro® POS and SAP Business One® ERP software enables a smooth exchange of data, streamlining in-store and head office operations for greater efficiency.

By capturing retail data from the POS at all your store locations into a single centralized platform, you can access critical real-time information to make fast, informed decisions.

You can even take proactive control through automatic alerts and automated merchandise planning, forecasting, and replenishment – so you always have the right amount of trending inventory in stock to meet demand and sell more.

Want to learn how you can increase efficiency with automated operations for your stores? Request your consultation today.

 

What can leading indicators do for the bottom line?

 

Think of the data that makes up your Business Intelligence as being made up of cause and effect factors.

Those two factors are lagging indicators and leading indicators.

The difference between them isn’t complicated, but it is critical.

 

Lagging Indicators = Effect

These are made up of accounting and historic measures.

In other words, these are the financial ratios you build based on the income statement.

 

Leading Indicators = Cause

These are also historic but look at internal processes and external events that occur prior to revenue.

Some examples of what they are include the number of qualified sales leads, time to market, conversion ratios, employee satisfaction, etc.

These are the indicators you should focus on if you want to improve results.

 

Why the big difference?

According to Gartner, 80% of current Business Intelligence content is made up of lagging indicators.

However, all of that current Business Intelligence content should actually be made up of leading indicators.

Why the big difference? One word: value.

Lagging indicators are valuable if you only want to look at current conditions, but it’s important to look at future projections to better guide your company toward greater success.

Leading indicators give retailers the ability to “look into the crystal ball” and take proactive instead of reactive action, which can save both time and money.

 

So what can leading indicators do for the bottom line?

When you have the right information and understand what truly impacts success and failure in your business, the investment brings dividends quickly and abundantly.

Leading indicators are truly valuable for businesses of any size because they:

  • Define what is critical for your business
  • Direct where investment is needed
  • Direct where focus is needed
  • Act as a big data filter to help you focus on what matters
  • Point you to relevant, company-specific data sources

 

Business Intelligence and analytics is what a particular clothing retail company uses to closely monitor what’s hot and what’s not in stores throughout Europe.

The precise control of inventory, turnover, and production has delivered improvements to the company’s bottom line by an estimated 30 percent.

The old adage “you have to spend money to make money” couldn’t be more true when it comes to investing in Business Intelligence and analytics.

 

 

Get Whitepaper

 

This blog is an excerpt from the Retail Pro Decisions whitepaper, From KPIs to Profit: Understanding Your Leading Indicators for Better Retail Results. Get this whitepaper today to read more.

 

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Which data is most valuable for analysis in retail?

 

For all the good that data can do for retail businesses, there is one major issue it presents: information overload.

Many companies try to focus on too many different metrics without focusing on those that truly matter.

They have an ocean of data inside the company from every type of software supporting their business processes.

In our experience, marketing departments typically have three to five different systems and manufacturing departments have even more.

As the big data tsunami overflowed the media and blogs over the past years, many companies try to grasp what to do with all that external data that is becoming available.

Some companies have started to collect external data but are not yet effectively utilizing it.

According to Gartner, the confusion around big data is so apparent that they indicate companies will delay spending on analytics and Business Intelligence in general until they figure out how to handle data better.

Actually, most big data investments made to date have been big data services, such as consultancy projects to clarify what they should be examining.

And only 8% of respondents in a recent Gartner survey of CIOs say they have deployed big data investments.

But big data -- or any data for that matter -- doesn’t have to be a daunting task if you start from within.

 

Determine your end goal

As with anything else in life, the way to successfully move forward, even with developing KPIs and identifying leading indicators, is to first determine your end goal.

That can be anything from increasing revenue to reducing costs.

Next, consider what in your internal and external environment can truly impact whether you are capable of reaching those objectives.

 

Internal Data

Internal data has to do with the internal processes of the business (product design, corporate vision, etc.).

You most likely own this information inside your company solutions already.

Otherwise, it is time you start tracking and registering.

 

External Data

External data has to do with economic factors outside of the company that still have an effect (the needs of customers, competitor actions, etc.).

The data needed to understand the external indicators is what is traditionally referred to as big data or external data sources.

Don’t worry too much about whether it’s big or small data; worry about what impacts your company.

 

 

Get Whitepaper

 

This blog is an excerpt from the Retail Pro Decisions whitepaper, From KPIs to Profit: Understanding Your Leading Indicators for Better Retail Results. Get this whitepaper today to read more.

 

Get whitepaper

 

Inventory counts

 

Retailers are constantly attempting to determine the "right" mix of products — one that won't leave them empty handed, yet not linger too long on the shelves.

Predicting what may be sold and when too often results in retailers getting stuck with the high costs of inventory and storage.

Other times, retailers fail to recognize trends and fads, and therefore miss out on sales because stock has been depleted.

Analysis of retailers' POS data can offer insight regarding customer preferences, and tech savvy retailers crunch those numbers to make an inventory "best guess."

The challenge lies in determining how to effectively manage inventory levels without sacrificing customer availability.

 

Online channels and stores working together

 

 

One increasingly popular method is to use brick and mortar stores as the fulfillment centers for the e-commerce channel.

The shopping mecca for do-it-yourselfers, Home Depot, has embarked on a new strategy that aims to avoid the overstock/understock conundrum.

As part of "Project Sync," Home Depot has created a steadier flow of more supplier deliveries with fewer trucks into its network of 18 sorting centers.

So, a center might request three trucks deliver five times weekly, rather than twice weekly deliveries from seven suppliers.

Spreading out deliveries might increase logistics costs, but that's still more cost-efficient than taking up shelf space for long periods of time.

In addition, real-time inventory systems like Retail Pro Prism help with incremental product adjustments during the week.

Home Depot competitor Lowes also acknowledged the need to improve conversion and gross margin while better managing inventory via technology, in a recent earnings call.

"We'll better empower associates by deploying more user-friendly interfaces," said Richard D. Maltsbarger, chief operating officer. "Later in the year, we'll significantly improve our associate connectivity, expanding the functionality of our in-store handheld devices to improve the efficiency of our order staging and management, daily tasking, and inventory processes.

This year, Lowes plans to spend 55% more on capital expenditures than the $1.1 billion it spent in 2017.

A new direct fulfillment center is in the offing, to accommodate the expansion of the home improvement giant's online product offering and to provide faster order processing.

It will also improve Lowes' buy online, pickup in store (BOPIS) experience.

 

Tech is key to better inventory management

 

Implementing IT solutions that identify customer trends and buying behaviors helps retailers identify which products will resonate, and which will not.

Today's largest retailers are using strategies that evoke just-in-time strategies used by manufacturers: Product is pulled in as-needed, and inventory levels are extremely low, perhaps only a few days of stock is on hand.

Moving goods more quickly, efficiently and accurately creates happy customers, which provides shelf space for more products that, in turn, creates more happy customers.

Metrics that Matter [Webinar]

 

 

Looking to improve inventory productivity and control?

Watch this webinar from Retail Pro International and Management One, the retail consulting brains behind Retail Pro Planning Open to Buy software, to see principles and tactics that will help you manage inventory better and compete profitably.

Part 2: Metrics That Matter

  • Discover science-based forecasting techniques to maximize retail productivity and financial performance
  • Compare your performance against benchmark data from top performing stores around the country
  • See how metrics like GMROI, inventory turnover, initial markup pricing and gross profit can help you achieve better results in your store

 

4 Ways to use POS data better with Retail Pro

 

 

More retailers today are recognizing value in the raw data they collect from every transaction and seeing the need to use it more strategically to create a unique customer experience that will boost their bottom line and keep customers coming back for more.

The challenge then becomes knowing which data to single out from the torrent of data you have available: which data should a retail company track which would give direction for marketing efforts and lead to more conversions and repeat sales? And how do you put that data to good use?

Here are 4 ways you can take advantage of data gathered in Retail Pro POS to personalize your customers’ experience and boost your bottom line.

 

1: Collect better data with user-defined fields

 

Relevant data is where data-driven profit begins, and user-defined fields in Retail Pro POS give you flexibility to add the fields for which you want to gather data.

You can start by collecting the basics, like customer names and emails, and put that to good use immediately to personalize your communications.

Or, get more detailed with information like skin tone when you’ve just helped them pick out the perfect face makeup, so your marketing team can make more tailored offers on items like lipstick or blush.

Plus, you can grow your bottom line more efficiently by reaching out to past and repeat customers. This is where collecting emails at the POS really makes a difference.

Retail Pro Prism’s scriptable XML/CSS user interface lets you collect the data you’re interested in to better understand your customers and reach them more effectively.

Because you can entirely reconstruct the POS workflow to reflect your operations, you can create a popup prompting the sales associate to ask the customer for this information, helping you increase the amount of data points you’ll have to analyze.

 

2: Upsell with customer management features

 

Upselling is easier than selling to a customer for the first time and can help a store’s revenue grow faster. It should make customers feel as though they are winning – not as if they are simply shelling out more money. And when they’re winning, you’re winning too.

A quick glance at a shopper’s purchase history (or all those customer details you’ve started collecting!) in Retail Pro can equip your sales associates with the information they need to determine what products your customer would find most interesting and relevant, and make the offer for an upsell when they’re in the store.

Make it clear why you deserve these customers’ business, and why you offer a better value proposition than competitors. Most importantly, let them know how they’ll profit too.

 

3: Report on and analyze all your data for deeper insight on what your customers want

Getting holistic, real-time data in the hands of key decision makers allows them to take immediate action and improve performance in your stores. And when you give customers what they want, they come back for more.

To help you maximize the value of your data, intuitive dashboards and clear graphic visuals in Retail Pro Reporting allow you to summarize performance, analyze results, and explore trends.

Plus, when you integrate all your data sources in Retail Pro Decisions – like data from your database, ERP, CRM, external statistics, Google Analytics, social media, and any other data to which you have access – you can better understand what happened, why, and what’s coming next.

 

4: Integrate POS data with your CRM and personalized marketing platform to build loyalty and boost sales

Analyzing transaction data as a whole, like what customers purchase from you, when and how often, can be more useful for your longer-term marketing efforts, to better segment your shoppers and create personalized email offers based on their purchase history.

Personalized marketing solutions like AppCard for Retail Pro use transactional data from Retail Pro to trigger behavioral-based campaigns and keep shoppers engaged with your store.

It can help identify brand advocates and nurture prospects with AI-driven, highly personalized offers that helps convert prospects to customers and turn customers into delighted customers.

Watch our recent webinar: How to Use Loyalty Data NOW to Boost Holiday Sales

By combining those data points, retailers can infer a level of interest and reach out accordingly. Remember, actions can speak louder than words.

 

Proactive retailers are constantly striving to increase visibility into exactly who their customers are, how they’re interacting with your stores, and what they want. And, with Retail Pro, you can collect and act on the data you need to drive more sales.

Want to see how you can put POS data to good use? Request your demo today >