Consumers are setting higher expectations and demands from their retailers, therefore products are being purchased, shipped, and returned across all channels—offline, online, and through mobile applications.
Modern technology enabled today’s customers to cancel the order of a product, return the product or even change the shipping address, thereby making their shopping hassle-free. Consequently, products can be moved to multiple locations during their selling lifecycle and hence complicating inventory tracking.
To create a positive customer experience, accurate management of inventory is critical which may require newer technology to track it properly. Inventory management systems are valuable tools in helping to provide a clear view of all stock, allowing retailers to better handle things like inventory allocation, excess inventory, and other stock-related processes. Let us look at the benefits of an inventory management system so that you will see that investing in one is worth your time and money.
Accurate Order Fulfillment
Imagine this scenario: A customer places an order and an eCommerce brand receives the order. The brand sends it to the warehouse only to discover that the product is out of stock. Or just as bad, the eCommerce brand ships the wrong item. This isn’t an uncommon story if inventory is poorly managed. Taking the time to develop a more robust plan can help brands avoid inaccurately filled orders, high return volumes, and a loss of customer base.
Trusting the report system
Having stock levels constantly up-to-date builds trust in the inventory management software by those who use it. This leads to better task performance, as you and your employees can be certain that the offers you are putting together or the purchases you are approving will be accurate and beneficial for the company. In turn, you will all use the technology more, resulting in better data collection that can then be used for future business decisions and team collaboration strategies.
Improved Warehouse Organization and productivity
A good inventory management strategy leads to an organized fulfillment center. An organized warehouse results in the more efficient present and future fulfillment plans. This also includes cost savings and improved product fulfillment for businesses utilizing the warehouse for managing inventory.
Also, with proper inventory management in place, less time and resources are spent invested in managing inventory and can be allocated to other areas. Technology is often used to speed up tracking and fulfillment operations, ensuring inventory records are accurate.
Satisfying your customers/buyers
Inventory management systems mean a clearer view for reporting. And better, more accurate reporting leads to better fulfillment, and less under or over-shipping and selling. You can also sell customers what they want because you are certain that the stock you see is the stock that is in your warehouse. This helps you sell and ship what you have, leading to fewer unfulfilled orders and disappointments.
Detecting problems sooner
Inventory management systems provide a real-time view of stock levels, allowing retailers to monitor and immediately react if levels ever go amiss, indicating that something is wrong. Being able to spot problems sooner, and thereby make changes faster, ultimately saves the company money by limiting the losses from an unnoticed issue.
Inventory forecasting for holiday and peak season readiness
When order volumes increase substantially because of holidays or events throughout the year like a major marketing push from an influencer, the amount of inventory you have will keep up with demand because of accurate demand forecasting. Historical and seasonal data can also be utilized to understand any sales patterns that require adjustments in stock levels at different times of the year.
Investing your cash better
Having a real-time view of inventory levels with full confidence in the accuracy of the numbers allows you to be able to know earlier what products are not selling and will remain leftover for off-price sales. This allows for better-planned sales. Additionally, these call-outs for poor-performing products allow you to make changes to your re-orders sooner and alter wholesale buying strategies going forward. Ultimately, good inventory management allows for smarter business decisions and better cash flow.
Missing fewer sales opportunities
Knowing exactly what you have allows you to better cater to your off-price buyers and gives you the ability to identify specific buyers by their purchasing history and habits. This then enables you to reach out to a specific buyer with specific product assortments catered to that buyer. In-stock product identification and buyer product preference lead to better-catered offers and thus an increased chance of a sale that would otherwise have not occurred.
Improving profit margins with higher returns
Accurate stock levels update automatically with new inventory management system technology. This gives you access to selling the product still in stock as soon as possible, leading to less money lost on warehouse space. Additionally, the quicker the product is sold, the higher the price it can be sold at since the product loses value every day it sits in the warehouse. And a higher selling price leads to higher monetary returns on that product.
If you are serious about competing and consistently generating strong profits, you need to purchase an appropriate inventory management software solution. Proper inventory management is a competitive advantage that will drive your company’s performance. The commitment to do it right might seem hard at the start, but the long-term benefits can’t be ignored if you are trying to build a sustainable and profitable business.