Innovative companies know how crucial it is to have a seamless online and offline presence that enables customers to connect and purchase through various touchpoints and channels. All of this is fantastic for expanding retailers, and you can broaden your reach, boost revenue, and attract more clients.
Yet, one of the biggest problems in retail and e-commerce is optimizing inventory planning methods for multichannel businesses. However, those logistical difficulties become even more difficult and expensive when you include actual stores and fresh openings in the mix. Overstocks and stockouts can account for around 12% of sales every year.
By having a Multichannel inventory planning strategy, retailers can easily manage inventory kept in numerous places and sold through several channels such as online marketplaces like Amazon or eBay, physical stores, B2B channels, and online storefronts on social selling platforms like Facebook Shop and Instagram are among them.
Essential Inventory Planning Strategies For Multichannel Retailers
Analyze Sales Data
Multichannel retailers should analyze sales data from all channels to understand consumer behavior, product demand, and market trends. This data can provide insights into which products are selling well and which are not, allowing retailers to adjust their inventory levels accordingly. By analyzing sales data, retailers can also identify seasonal trends, promotional periods, and sales spikes, allowing them to plan their inventory levels accordingly. For instance, if a specific product category sells more during a particular season, the retailer can increase the inventory levels of that category during that season.
Implement an Inventory Planning System
A good inventory forecasting software can help multichannel retailers keep track of their inventory levels across all sales channels. By centralizing inventory data, retailers can get real-time updates on stock levels, monitor sales, and make informed decisions about replenishing their stock. An advanced inventory planning system can help retailers avoid stockouts and overstocking, leading to lost sales and increased costs. Additionally, it can also help retailers optimize their order fulfillment process, reducing lead times and improving customer satisfaction.
Accurate Demand Sensing
Retailers want a solid system that reliably forecasts demand at the SKU + Category + Store + Warehouse level based on each item’s unique trends, seasonal patterns, price, and holiday effects. Businesses dealing with perishables, fast-moving products, and high-demand SKUs must balance excess inventory and stockouts. Demand Sensing lowers demand latency and incorporates daily sales data to obtain insights and enhance serviceability. Additionally, combining information about promotional campaigns and pricing adjustments based on price elasticity, seasonality, and weather enables demand planners to size their SKU inventory appropriately.
Use Automated Replenishment
Automated replenishment systems can help multichannel retailers automatically replenish their inventory levels based on pre-defined rules. This can help retailers reduce lead times and improve their order fulfillment process. By automating the replenishment process, retailers can reduce the risk of stockouts and ensure that they always have enough inventory to meet customer demand.
Implement a Cross-Channel Fulfillment Strategy
A cross-channel fulfillment strategy can help multichannel retailers optimize their order fulfillment process and improve customer satisfaction. By allowing customers to order online, pick up in-store, order in-store, and have their items shipped to their homes, retailers can provide customers with more options and flexibility. Additionally, a cross-channel fulfillment strategy can help retailers reduce inventory holding costs by using brick-and-mortar stores as fulfillment centers.
Work with Reliable Suppliers
Working with reliable suppliers is essential for multichannel retailers to ensure they can access the products they need to meet customer demand. Reliable suppliers can help retailers reduce lead times, improve product quality, and negotiate better prices. Additionally, working with multiple suppliers can help retailers reduce their dependence on a single supplier, reducing the risk of stockouts due to supply chain disruptions.
Regular Audits
Establish a benchmark for productivity, stock levels, and inventory operations through routine inventory planning audits.Cycle counts for inventory should be performed frequently. They simply compare the inventory in the system to the inventory in the warehouse. As it depends on the size of your company, the number of employees and the range of your items, the frequency is really up to you.
Break it up over a longer time or set out a certain day of the week for counting if you have so many products that completing it in a single day or days will cause slower fulfillment or lost time.
Assessing Optimal Service Levels
Any retail business must control its inventory costs. The most typical method is to choose the ideal inventory level and continuously purchase more of a good when it approaches running low on stock. Overstocking some products, this practice can result in locked-up working capital if it isn’t done effectively. Service level optimization can aid in resolving this issue. To ensure profits, managers should identify the SKUs that generate the most sales revenue and maintain good service standards. This will ensure they always retain sales opportunities for products in great demand.
About the Company
Kronoscope by Fountain9 is an AI-powered demand and inventory planning solution that helps retailers in enabling a multichannle strategy. The software can precisely forecast demand for each SKU item and determine the quantities that need to be stocked to fulfill demand adequately. It assists retailers in keeping a high level of product availability and forecast future inventory requirements to optimally stock inventory to satisfy customer demand at the proper moment hence avoiding overstocking and out-of-stock losses.
Additionally kronoscope also assist retailers in automated procurement & replenishment strategies redcuing mannual interventions. It also ensureses optimum service levels are maintained by categorizing every SKU group into ABC classes, which enables demand planners to maintain adequate service levels based on the sales data..