Without retail analytics, are managers fully equipped with the best tools to manage inventory and optimise their margins?
Without efficient inventory allocation, managers risk losing out on potential profits due to out-of-stock items. Alternatively, they may even end up with excess products that sends margins on the decline as large amounts of inventory are marked down to sell-through.
With purchasing, allocation, and promotional activity dependent on high-quality and data-driven insights, retail analytics can empower inventory management and ensure that decisions are based on intelligence and insight, instead of gut feel and instinct alone.
But how can retail analytics truly enhance the inventory management experience, and what does this mean for teams wishing to take advantage of these capabilities? Below, we’re answering some of these questions.
What does retail analytics mean for inventory management?
For inventory managers and other users, retail analytics provides access to a suite of tools and high-quality insights used to support the decision-making processes throughout the inventory lifecycle.
With sturdy, well-engineered data presented in a range of reports & dashboards, retail analytics is a critical tool, especially in a period where the competition between retailers grows fiercer, and margins come under greater pressure.
Learn more about why sales teams should harness retail analytics here.
Why a data-driven approach to inventory management is critical
Retailers around the world are realising the full potential of data-driven decision-making that is backed by reliable Business Intelligence.
With results gained through analytics and supported by centralised information, merchandising teams can drive stakeholder decision making. This enables a tactical approach to your inventory strategy, keeping you agile in rapidly developing markets.
For inventory management, data-driven analytics provides users with critical access to the reliable, secure, and trusted foundations needed to mitigate the risk of profit loss.
Traditionally, analysing current stock levels, understanding reasons for stockouts and quantifying the impact on revenue can be challenging and complex. Data volumes, silos, and a constantly changing footprint of data are all contributing factors. Analytics can streamline this process with a data-driven strategy. As a result, users can get a clearer view of inventory free from unwanted bias.
What’s more, retail analytics also provides inventory managers and other users with access to a more responsive, collaborative, and centralised platform for sharing insights with other teams.
The dangers of poor inventory management
When done incorrectly, inventory management can cause serious consequences felt throughout the entire business – from warehouse operatives to CFOs.
Processes that aren’t optimised can cause many issues, from a decline in customer loyalty to increased shipping times, but there are many consequences of poor inventory management:
A lack of awareness of the current demand
Too much inventory on hand can lead to many challenges. Money tied up in excessive stock can lead to cash flow problems: margin erosion when trying to clear excessive stock, storage issues in warehousing, and even shop floors obscuring new products. Optimising Inventory should help you adapt to customer demand with the flexibility it affords you.
Losing out to competitors
We’ve all been there. With a certain item or product out of stock, it’s tempting to go looking at similar products from competitors.
This is a hazard that any retailer will already be aware of but is one that displays the importance of using retail analytics to ensure proper inventory management.
With clear and established retail analytics tools used in conjunction with enhanced reporting dashboards, retailers can streamline the purchasing process to mitigate these risks. But that isn’t the only advantage.
Retail analytics and a collaborative approach
Retail analytics brings with it much more than innovations in inventory management. With a well-implemented retail analytics framework in place, users throughout the entire enterprise will be able to view the same reports simultaneously, trusting that all the results are accurate and trustworthy.
This centralised approach to reporting can emphasise an inter-departmental approach to decision-making while helping to enforce a data-driven culture.
What’s more, with this collaborative analytical framework in place, users are much less likely to conduct their own isolated analysis, which in turn mitigates the risk of harmful data silos and unknown bias being created.
Empowering analytics with ease
With extensive experience implementing a wide range of tailored services, we’re fully committed to helping reach your goals with ease.
Want to learn more about how retail analytics can boost your margins and help you navigate a wide range of retail challenges?
Download the 5 ways to boost your margins with retail analytics eBook to find out more.
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