Modern inventory management is about more than simply knowing what’s in stock in the back room or warehouse. With advances in the way merchandise is delivered (pop-up shops, online, clicks and bricks, etc.) and how it is sold (offer based, bundling, back-end deals and so on), retailers expect more from their inventory management tools than ever before.
However, the core function is still the ability to track items reliably, and provide feedback on items that have been sold.
As IDC’s Bob Parker pointed out in a 2011 interview for Inc.com’sblog : “Before you get fancy, get the fundamentals right”.
Those fundamentals include the processes as well as the tools that support numbering, stocking, picking, packing and delivery of items.
The Counterpoint POS inventory solution, for example, provides a Windows(tm) environment to help do just that. It is a supporting solution that fits around the business.
Besides stock management, there are three other areas that are key to business success, and which an integrated solution needs to provide for:
- Effective demand prediction
Anything from discounting to tagging on services, and implementing JIT stocking for seasonal items will contribute to the business bottom line.
Helping to Structure Pricing
While Amazon has been criticized in the past for their dynamic pricing strategy, the Virginia Journal of Law and Technology points out that it is a reality, and in many cases an acceptable policy.There’s also no doubt that it works for both the customer as well as the retailer. One way that POS inventory solutions can offer this is through margin-driven pricing.
This type of pricing helps the retailer get the right price point to meet their revenue goals, and gets the customer the best possible deal. This can then be combined with offer-based pricing (such as Buy One Get One Free deals) and other, more complex, rule based pricing strategies.
To make the products and services even more attractive, retailers can also consider bundling and cross merchandising. Within inventory management systems, different groups of products can be bundled to provide the customer with a complete solution at an attractive (and automatically calculated) price.For example, an electronic device might be sold with an extended warranty, or serving agreement. Consulting time might be tagged on to a set of audio or paper based training materials.
Taken to its logical conclusion, bills of materials based bundling can be used to make up packs of related items, or even components of a bespoke manufactured item.
Reporting as a Key to Retail Success
A Brainbench report from 2002 puts it this way, “The success of any inventory management initiative is based on its ability to deliver consistent, actionable results.”
To be fair, they were talking about skills, but it is applicable to any business model. The key words are ‘consistent’ and ‘actionable’.
Satisfying both of these needs a process, and reporting to feed into that process. So, POS inventory solution products need to offer two things:
- Basic, built-in actionable reports
- Custom reporting facilities to support business processes
Without both of these, the business owner does not have sufficient information to hand to make decisions that are critical to their business strategy.
And these are not not just fluffy buzzwords. The success of many companies can be tracked back to the management of information (Amazon, Google, and Twitter to name but three), and that’s all it boils down to – accurate reporting and processes that take action on those reports.