The holiday shopping season is right around the corner and for many retail owners, this can be a stressful time for many reasons. There are larger crowds, a need for extra staff, the general strain of the holiday hustle and bustle and the guessing game of how much extra inventory you’re going to need in your store to accommodate those crowds.
It is no secret that the retail world is changing. More and more people are choosing to do their shopping online not only due to their hectic everyday lives but also due to product availability and this puts even more pressure on brick and mortar retail stores to compete. If retail owners want to compete with the Amazon’s of the world, they need to make sure they have the customer experience and the inventory to back it up.
If a customer goes into the store looking for the latest and greatest video game for their nephew and it is not on the shelves, their immediate first thought will be, ‘oh I’ll just buy it online’ and then just like that you’ve lost a customer. To avoid this situation, retail owners need to plan ahead.
A new study from the Grocery Manufacturers Association showed that out-of-stock rates for e-commerce purchases of consumer products were nearly twice as many as in brick and mortar stores. Physical Stores had an out-of-stock rate of 8.3%, compared to a rate of 15% for digital retailers. These findings show that retail stores have an opportunity to boost their sales for the holidays, and in general, simply by keeping the right items in stock. However, Seasonal inventory is extra challenging because you’re introducing a whole new set of products each year and it is difficult to predict how well they will sell and how fast. Retail owners want to make sure they are stocked on inventory, but also not overstocked which would leave them with pallets of items that won’t sell past the holiday season.
So, for the retail world, seasonal inventory can face 3 major challenges: how much to buy, where to put it so that it sells, and how to get out of it the profitability that you need at the end of the season.
4R’s Seasonal Buy solution helps buyers answer those questions. We look at the quantity they should be purchasing based on past seasonal buys, sell-through percentage, and forecast uncertainty. Our Seasonal Allocation Solution then handles the distribution of inventory to stores as the season progresses, by calculating the location that would yield the highest profit from an additional unit of inventory based on the point in the season, the store’s current inventory position, and sales velocity.
Our planners make it easy for retailers to use the web interface to track the season’s progress and manage adjustments accordingly. This means fewer markdowns at the end of the season due to overstock!
The holiday season can be a joyous but stressful time, especially for retailers, but 4R’s Seasonality solution is the gift that keeps on giving! For more information, click here.