Data Power: Effective Inventory Management Through Retail Sales Software Solutions
Smart retailers know how important inventory management is for good business. But does your retail management software truly handle data effectively?
All too often, mid-market retailers are equipped with a host of disparate systems that generate disintegrated inventory data. A retailer that uses one piece of retail sales software for traditional brick-and-mortar sales, another program for e-commerce and yet another piece of software for mobile retail sales is generating crucial inventory data from a variety of places.
But even with a common database architecture that allows for some tracking, the data these programs accumulate are not always integrated effectively. Add a separate enterprise resource planning (ERP) system into the fold and you see how these disparate data sources lead to less than ideal data visibility.
Data is only useful if it’s relevant, and with inventory management, problems arise when retailers make important business decisions based on bad data. The key to good inventory management is data visibility, as it provides sales opportunities, prevents loss and helps to predict future sales.
When you have seamless, integrated data coming from a single source, you have the clarity you need to make good decisions for your business and maximize success.
The traditional retail model relies on point of sale (POS) software to accumulate sales data all day, and then a separate ERP system that at the end of the day gets one file detailing everything sold.
With real-time, integrated data between your ERP system and your POS software, you’re made aware of sales as they’re happening, which enables you to react to unexpected consumer demand and capitalize on unexpected sales opportunities.
For example, say you’re a purveyor of rock band t-shirts, and Radiohead announces a surprise concert in your city this weekend. If you see real-time data showing a spike in Radiohead shirt sales on Monday, you have the opportunity to react to that customer demand and make a quick order to transfer Radiohead t-shirts from your other stores to your outlet near the concert venue.
Fully integrated data, and the visibility that comes with it, allow you to anticipate sales opportunities and react accordingly.
Additionally, integrated retail management software enables you to use historical sales data to make forecasts on future inventory needs. If you unexpectedly sell 200 more Radiohead shirts due to the band announcing a surprise concert, you gain insight into what your customers are looking for. You’re then able to use that data to your advantage in the future, making sure to have plenty of Radiohead shirts in stock when you see the band is next scheduled to play in your area.
Fully integrated sales data also gives you the tools needed to manage both physical inventory and loss detection.
What are you doing to ensure that what your records indicate is in your inventory is actually in stock? Simple errors in data management present opportunities for product loss, inventory mismanagement or even theft. Ensuring data accuracy is essential to preventing these sorts of problems.
Something as simple as human error could cause you to think you have a stockpile of items on hand, when in reality you have none. If an employee enters a transfer of 25 lawnmowers from one store to another into your ERP system, but then forgets to actually execute the transfer, you won’t have accurate data. Eventually, this kind of mistake is noticed and corrected, but the time between the error and its resolution could lead to missed sales opportunities.
From an inventory management standpoint, data visibility is essential for good business. Not only does seamlessly delivered, accurate data provide you with the information necessary to forecast sales, prevent loss and make you aware of sales opportunities you may have otherwise not have known about, the inventory clarity that good data provides also trickles down to your customers.
Think about it this way: When you’re able to tell customers how many of a specific product is in stock or whether their order has been processed, they’re more likely to do business with you again, because customers appreciate data visibility as much as you do.
See firsthand how our solutions deliver retail agility and performance. Schedule a no-obligation free demo of ArcherPoint’s retail management solution.
Author: Wm. Matthew Street, Solutions Consultant/Retail Product Lead at ArcherPoint