Forward-thinking brands understand the importance of maintaining a synergetic online and offline presence, allowing shoppers to interact and purchase through multiple touchpoints and channels. This is all great for growing retailers. You can increase your presence, drive more sales, and reach more customers.
But multichannel inventory management is one of the top challenges in retail / ecommerce. So when you add physical shops and new store openings to the mix, those logistical challenges become even more complex.
And pricy. Overstocks and stockouts can cost you around 12% of sales every year.
So, we’ve rounded up a list of seven best practices to help you get a handle on multi-channel inventory management.
First things first: the more inventory and channels you have, the more important it is to maintain organization. That’s likely why 28% of companies don’t have inventory visibility across stores, warehouses, and vendors.
It’s important to use consistent naming conventions, categories, variants, SKUs, and other relevant identifying information. This makes reporting more accurate and simpler, and it can also have a positive impact on customer-facing touchpoints like receipts.
With a solution like Vend, you can input inventory directly. Vend makes it easy to scan barcodes with your mobile device so you can take counts, edit product information (including quantity), and scan your products into the system.
Organization includes your stockroom, too. “This is key to infrastructural continuity. Disorganization can cause stock to get backed up or even lost, which hinders the replenishing process of the shelves and also puts additional stress on employees,” says Francis Matthew Auriemma, President at Far-Aum Quest, Business Consulting Enterprises.
“If everything is in its proper place, you’ll know when something is missing, thereby minimizing loss and theft at the head and not the tail. Employees will be able to cause stock to flow fluidly, and resources will be freed up for additional tasks.”
Establish and document protocols
Piggybacking off the idea of organization, those systems only work if the people who use them abide by them. Just because you know what goes into effective multichannel inventory management doesn’t mean your team is on the same page.
Standardize processes and put them down on paper so you can share it with the larger team. This creates consistency and empowers staff. Here are some ideas on what to document:
- Ordering and receiving stock at the warehouse
- Getting products for fulfillment or store deliveries
- Counting products
- Record reconciliation
- Handling returns
- Warehouse security and loss prevention
- Health and safety procedures
- POS functions
Upgrade your tech stack
It’s important to have the right tools and technology in place to support your processes’. When it comes to multi-channel inventory management, it’s absolutely critical to have real-time visibility and synchronization into your stock.
But connecting and integrating different systems is a top challenge for 3PLs, and 34% of companies don’t have the software integrations they need. In fact, more than half of ecommerce brands still use manual pen-and-paper processes to manage logistics.
Surprisingly, as many as 38% of companies don’t even have order management, inventory management, POS, or 3PL software. When choosing your POS system, inventory management software, and related tools, consider the integration options in addition to their built-in feature set.
London-based menswear retailer Number Six relies heavily on both their brick-and-mortar and online sales channels. Implementing Vend POS and its advanced multi-channel inventory management features helped the brand achieve 40% YOY growth, maintaining seamless operations along the way.
Get everything you need to know to successfully level up your retail tech stack. Our guide on upgrading your retail management system offers tips + tools on how to do this successfully.
Head to the cloud
Speaking of technology, you’ll want to head to the cloud when managing inventory across multiple channels. This helps you maintain real-time visibility across locations — be it brick-and-mortar stores, warehouses, vendors, and anything in between.
When you use a cloud-based POS, for example, you can make sales from your retail store and it’ll instantly update your master inventory data. This can help you avoid mistakes like making a sold-out item available to online shoppers.
Papersmith takes advantage of these benefits with the Vend POS and Shopify integration that they use to manage in-store and online sales and stock levels. “Vend has improved our efficiency massively,” says co-founder Sidonie Warren. “It saves us time because it links to Shopify and updates our inventory automatically.”
Going cloud-based also gives you richer insight into your business and your inventory. You can view real-time reports and data analyses to make more informed purchasing, pricing, and inventory-related decisions. This means less time crunching numbers yourself and more time making strategic and informed decisions.
Sync online and offline
Regardless of your tech stack, it’s important that online and offline data inputs are synced so you have an accurate, holistic view of your stock. Set your sights on a retail management system that could connect your online and offline data.
Doing so will provide increased visibility has help fuel your growth.
This also makes it easier to analyze online vs. offline sales. There may be particular products that perform better online vs. in-store, and vice versa. Note trends that are both consistent and different for each channel.
Automate what you can
With so many moving parts and pieces, it’s helpful to take the human element out as much as possible. This can alleviate human error and provide more advanced data analysis. This is where automation comes into play.
Automation also saves you time by allowing your team to focus on more important business tasks, rather than tedious and repetitive tasks that could easily be handled by technology. When Viscata started automating inventory management with Stitch Labs, for example, they saved 5-8 hours per week and earned a 10% increase in sales.
Conduct regular counts
While machines can certainly do a lot, it’s still important to conduct “quality checks” by hand, especially when dealing with multiple channels. In inventory management, we call these counts or audits. A physical count is when you tally up the number of products you have in your possession in person. This means a person or multiple people physically go around and count how much merchandise you have.
Sounds tedious, and it is. But it’s important. And that’s also why you don’t need to conduct a count every day. Generally, speaking, you’ll want to do a full count every year. This requires shutting down the store and halting operations so you can solely focus on the task at hand. Try to pick a slow period to do these. Throughout the year, you can conduct partial counts. Essentially, you choose a sample group of inventory to count and apply those findings to the rest of your stock. This is less accurate but also less wieldy.
You can also do more regular inventory counts with your POS system. In Vend, you can conduct a full count at year-end or a partial count for spot checks throughout the year.
Move forward with multi-channel in your retail business
Adding new channels to your traditional brick-and-mortar business is a great way to reach more customers, increase sales, and improve the customer experience. To successfully execute multi-channel selling and inventory management in your retail business, get yourself a retail management system that can keep your stock in check and power your growth.
About Francesca Nicasio
Francesca Nicasio is Vend's Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She's also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.