Going into this peak season, many retailers are asking the same question: “How in the world will I know how much inventory I need when the last two years of demand data are skewed?” That’s when you realize the inevitable truth: you won’t know how much you need this year. So, retailers must maximize the inventory they have to fulfill as much demand as possible.
During these uncertain times and in the ever-fluctuating market, entrepreneurs and brands need to be scrappy by being smarter with their inventory management. For brands, especially startups, intelligently deploying your inventory is critical to your business’s longevity, as a company’s inventory can typically represent most of the investment in the business.
Unlocking inventory that was previously only available to a portion of the market can help you fulfill more demand from less inventory. Let’s explore three ways you can relieve peak season pressure and unlock flexibility by thinking smarter about your inventory management.
To maximize your inventory, you must first know how much you have. An accurate view of your total inventory position can help you strategically position your products to fulfill demand faster.
And I’m not just talking about the inventory in your or your suppliers’ warehouses. Your holistic inventory data should include product lead time data and the often-forgotten products that are on-order and in-transit. A unified, holistic view of your inventory can help ensure you can maximize the demand you can capture.
You can be smarter when fulfilling orders now that you have accurate inventory data. Shipping only from warehouses means you are risking long wait times for your customers. With today’s expectation of one- and two-day deliveries, those customers might not purchase from you again if you can fulfill orders quickly.
So, what can you do? Get closer to your customers.
Fulfilling e-commerce orders from alternative locations, such as retail stores or micro-fulfillment centers, closer to your customers helps you fulfill more orders quickly. You can better capture customer demand and save on shipping costs.
You can also ease peak season pressure by spreading out customer demand. One way to do so is to incentivize your customers to buy during typically low-demand periods, such as running promotions a few weeks ahead of peak season. Offering discounts earlier in the season entices people to purchase your products ahead of your typical buying surge.
This can help flatten the demand curve for your warehousing team and allow you to service the same net number of orders but with a lower average delivery time.
Unlocking the full availability of your inventory could mean changing your operations. Reserve Online, Pickup In-Store (ROPIS) and Buy Online, Pickup In-Store (BOPIS) are relatively common features for an omnichannel e-commerce strategy. But Buy Online, Ship from Store is less common.
Retail stores are typically not set up to ship out boxes. Pulling inventory from a store display to pack and ship to customers is a lot of work and is typically a manual process. Point-of-sale (POS) systems typically have some inventory tracking capabilities, but they are generally restricted to what is in the store and don’t facilitate outbound shipping. Shipping from a store requires a different workflow, and you need a system to manage that process.
A second option is partnering with micro-fulfillment centers close to where you think your customers are, helping you fulfill orders quicker. Note that this requires a distinctly different process than the ship-from-store option.
I recommend using manual processes to first test these alternate fulfillment strategies. But you will soon find you’re outgrowing those manual processes. When that happens, know there are specific systems designed for store fulfillment.
However you implement these processes and add additional fulfillment capacity, you could capture more revenue.
This peak season, you’re probably not going to have the exact right amount of product, so you must maximize what you have. Being scrappy and positioning your products in alternative locations gives you the flexibility to fulfill orders quicker to customers in different areas.
Rest assured that no one knows how to plan inventory accurately this year but unlocking your entire inventory position can help relieve pressure and give you the flexibility to weather this turbulent peak season.
Want to learn how you can unlock your full inventory position, contact PorterLogic today.