US Retail industry Overview
The specialty retail industry in the US operates in a high-visibility and consumer-focused environment. It is exposed to the vagaries and shifting whims of target audiences, which are increasingly demanding and segregated into specific demographics. In order to be successful in such a heavily competitive marketplace, companies must adopt retail inventory management strategies and technologies that go far beyond the traditional focus on cost savings efforts alone. Also, they must gain greater visibility and offer a smoother multichannel shopping journey delivered seamlessly across bricks and clicks.
Business Challenges Faced
A $5 billion specialty retailer operating 500 stores under multiple banners, store formats and brands in the US was faced with the implementation of a new retail inventory management strategy to support softlines. As a part of this project, there was a need to maintain inventory levels that could meet demand without over-purchasing. The objective was to identify improvement opportunities as well as uncover business processes that posed a risk to achieving the transformation’s benefits and adoption of the new strategy. Moreover, the client also wanted to manage the money spent on inventory, optimize the storage space and identify effective purchasing and pricing procedures to avoid dead stock.
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Our Research Approach
The experts at SpendEdge assessed the client’s existing retail inventory management techniques and processes to recommend areas of maximum value related to the handling and merchandising of products. They reviewed the organizational structure, roles, and standards and helped the client to reconcile against industry-leading practices. This enabled the client to identify multiple opportunities for improvement to store inventory operations and overall business performance within operational areas such as restocking, price changes, and store transfers.
The engagement further enabled the client to gain real-time insights into every aspect of their business — from sales and inventory counts to product performance and profits. The retail inventory management best practices identified action items and prioritized tactical plans for both immediate actions and as part of the system rollout. High priority action items included developing SOPs for item ticketing and inventory counts. Additionally, a formal store-to-corporate communication channel was implemented to improve the business process.
The retail inventory management engagement helped the client to achieve an average increase of over $45 margin dollars per square foot in the softlines business. Also, it empowered the client to improve sales, reduce markdown, and increase replenishment efficiencies.
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How Can Retail Inventory Management Solution Help Businesses?
- Mostly the cost of storage is directly dependent on the amount of inventory stored. With the solution, companies can make use of planograms and optimize inventory storage.
- A retail inventory management system reduces the possibility of lost inventory, thereby minimizing revenue losses.
- It can help companies manage their supply chain and stay on top of changes in the industry.