Mistake #1 in Managing Retail Execution: Inventory Management
Out of college, I worked for a 40 year old brick and mortar bedding store. While I do love a good duvet set, I was hired in an effort to launch the online presence for the store, create a customer service platform, help to build the online ordering, and to create a process for shipping items from storage.
While it was an exciting proposition, there was one big elephant in the room: How do we inventory a 40 year old store, get every item with quantities online, and keep track of both what ships and what sells in the physical store?
Note: This blog post is about one of the largest problems in effectively measuring and managing retail execution. While this particular example is a single unit, family owned operation, the inherent problem of inventory mismanagement is compounded for a much larger chain.
My first thought: Let’s close the store for a day or two, create a master inventory, and upload it to the site. It was a great effort that was nearly 48 hours of straight work. However, when you are dealing with 40 years of old shower curtain liners, toothbrush holders, curtain rods, and single shams for no matching set, we could have closed the store for a week and it wouldn’t have worked.
My second thought: This is an impossible task.
My third thought: How did people ever do this without software?
On top of this inaccurate inventory mission, we were receiving new shipments for online orders multiple times a day. Inventory mismanagement is one of the biggest problems in managing and measuring retail execution. Retailers and manufacturers alike have to stay ahead of trends and demand, yet have little visibility into in-store inventory.
Retailers realize how important it is to measure execution, but still fail when there are errors in inventory management. Many a brand that has lost credibility with me over backorders and processed orders for already “sold out” items. No thank you on the bait-and-switch to a product that is “just like it!”
Too many companies are focused solely on what happens up until store delivery. These same companies still have limited or no visibility inside the actual stores. They don’t track or capture that visibility. If they do, it is usually through a third parties or old technology.
It is evident that retailers need to find better ways to manage their in-store inventories and reporting. It seems almost elementary to the casual, non-store owner or manufacturer, but still causes headaches for retailers and retail brands of all sizes.
Where are you getting your solution?