As the retail landscape becomes more complex, how can retailers consistently identify and invest in stock winners? With customers purchasing across channels including but not limited to instore and online via websites, eCommerce marketplaces and social media platforms, Iain Coplans, founder of Stok.ly, discusses how retailers can stay on top of demand planning and purchasing, using multichannel software.
Investing in the wrong stock may result in a number of negative outcomes. Cash flow may become tied up in slow moving stock, increasing your cost of stock held and reducing your ability to invest in profitable lines. Investing in the wrong lines may damage your relationship with customers, reduce your profits and at worst, threaten the ongoing viability of a business.
Investing in the right stock is likely to improve cash flow, improve your profits, enhance relationships with customers, reduce your cost of stock held and perhaps most importantly, free up cash to invest in more winners.
Selecting the right multichannel software for your business is the first critical success factor in successful demand planning and purchasing.
A data driven approach to Demand Planning and Purchasing
They say, “data is king”. The right multichannel software for your business should deliver a big picture view of your sales performance across all the channels you participate in.
Yet to understand which products drive profit in your business, the devil lies in the detail. To access the detail, you will benefit from reporting and insight tools that enable you to click through to more granular data on each channel, category, and supplier. This detail provides clarity on your winners and losers and removes personal bias or anchoring bias that may otherwise influence your buying decisions.
It is common to see the sales performance of a product vary dramatically across instore and online, across website, social and marketplaces. Prominence of place and merchandising in a store, search optimisation online and selling history and customer ratings on marketplaces all effect the turn rate of an item.
For the above reasons, although this is not an exhaustive list, understanding the sales performance of an item across each channel is critical to effective demand planning and purchasing.
Effective multichannel reporting and insight tools will enable you to compare the performance of winners across each channel, identify fast moving stock and your most profitable lines.
Identifying winning suppliers
Certain items may perform well on one channel and not others. Multichannel software can help you identify your winning suppliers on each channel.
With this information on your most profitable suppliers per channel, you can look to expand into other product ranges from that supplier, and maximise sales on a per channel basis.
Investing in stock proportionally to channel performance is a critical success factor in effective demand planning and purchasing.
Identify winning bundles
The right multichannel software will help you understand which items are most commonly purchased together, on each channel.
Basket analysis reports will highlight your stock winners and break out the most commonly purchased items in those baskets.
Using this information, you can ensure your demand planning and purchasing reflects the buying habits of your customers and work towards increasing the average transaction value of your sales.
Taking this one step further, you can use this data to optimise web pages to show the most bought complementary items, increasing the average transaction value and the average number of items in a basket.
Customer Insight
Segmenting your customers in real time, based upon behaviour and purchase history can provide you with meaningful insights that enable personalisation of your marketing.
With data on your best sellers and the most commonly bought items in bundles, you can personalise your marketing to promote complimentary items based on purchase history.
Identifying customers by average sale value and frequency of visit can help you further personalise your cross selling and upselling promotions.
If you understand your customers and your stock, you are well placed to maximise sales while generating active loyal customer relationships.
Find out more about our real time inventory management, demand planning and purchasing
Find out more about our Advanced Reporting and Customer Insight Tools