Strategic Moves
To place inventory in the most efficient and profitable way, merchants can define product objectives, like minimum credible display and service levels, which should be used to decide each inventory placement decision. This enables retailers to make sure every product is in their assortment for a reason.
Though fast-moving products create the most revenue, even slow-moving products need to have a strategy. It’s not just about ensuring availability; it’s also about choosing the right mix of products and ordering the right amount for each location. It is even more critical in grocery, as perishable products create wastage and erode profit, especially in a retail sector with already slim margins. In the past, retailers have not been able to drill down into individual item behavior on a store-by-store basis because of the complexity and time involved, but modern technologies are changing that.
Retailers who understand the needs of the market at a lower level of granularity and can react to current buying trends will be much more successful. As channels grow and become more complex, planners and strategists require technology with the ability and intelligence to turn real-time data into actionable knowledge.
Smart Technology
Localization practices and strategies take time and manpower in order to manage store need at such a granular level. But there is smart technology available to retailers who want the best insight into consumer behavior that can enable them to scale. These technologies can tell the retailer what the demand is at every level of their chain, and can automate order planning by learning and recommending execution of the right products at each store. This type of technology makes allocation and replenishment a simple task and proves a very profitable decision for progressive markets.
With smart inventory management tools, retailers can track real-time sales and demand data to learn from the behaviors of customers and create a more accurate forecast that can help them understand the changing patterns of shoppers.
For retailers who desire to align their inventory, reduce waste and gain consumer insight, applying new strategies and technology is the answer. Merchants who can fulfill customer needs at a local level will quickly become profitable and gain a competitive advantage.
Chris Allan is the chief strategy officer at Quantum Retail.