How to Boost Retail Profits with Automated Inventory Management
Automated inventory management has become a cornerstone of success for leading regional and mid-market retailers. It is a unique lever, available to all retailers, that benefits customers, employees, and your bottom line.
Yet, these techniques remain largely untapped.
Inventory automation uses algorithms to extract insights from broad sets of data. Inventory management software uses these insights to optimize ordering and merchandise movement from suppliers to consumers.
The benefits of inventory automation extend across your operation when implemented to its potential. Business results include better customer experiences, significantly lower costs, and increased sales.
Technological advances have now put these benefits within reach for all growth-oriented retailers.
This article clarifies the benefits of inventory automation and lays out the requirements for adopting it. We'll look at the ways automated retail inventory management is helping mid-market retailers navigate turbulent times to come out ahead.
Why is the Automation of Inventory Essential for Retailers Today?
The pandemic led to profound shifts in consumer behavior which moved the digital transformation in retail forward by several years. This acceleration caught many retailers flat-footed as consumers pressed them to provide unified shopping experiences with flexible fulfillment options.
At the same time, retailers have faced unprecedented challenges including supply chain disruptions, labor shortages, and soaring inflation.
Volatile periods are a risk to all retailers. Yet they offer considerable opportunities to those positioned to capitalize on them.
At FieldStack, we help mid-market brick-and-mortar retailers leverage their advantages to out-maneuver the competition. Effective inventory management offers the potential for outsized returns, and it’s one of the first places we look.
A unique opportunity for regional and mid-market retailers.
We’ve all watched the largest global retailers struggle to predict demand and get their assortment mix right. This has extended the window for smaller, more agile retailers to make moves that enable them to fully leverage their strengths.
As a regional or mid-market retailer, you have advantages even during volatile times.
- You have established internal and external supply chains.
- You know how to implement sustainable processes to grow.
- You are large enough that you can make changes that tangibly matter.
- Still, you're agile enough to quickly rotate goods in and out of your supply chain and get substitution goods.
Speed is the advantage in supply chains, and you are well positioned to act swiftly.
Inventory automation helps retail stay human.
Retail is a human business. Much of its history and success have been driven by the passion, instincts, and experiences of exceptional employees.
Still, computers excel at certain things. They can digest massive amounts of data. They apply complex math, produce accurate demand forecasts, measure results, and handle repeatable tasks with great speed and precision.
Data-driven automation, with appropriate oversight, is demonstrably more accurate than humans at predicting buying demands.
Effective inventory replenishment combines the power of technology with the instincts of your best people. Experienced buyers are critical for new items and special situations. From there, technology is great at optimizing the work of these individuals and amplifying successes across your organization.
Three necessary conditions must exist for successful inventory automation:
- You must collect data at every touchpoint — including customer, supply chain, and inventory data.
- This real-time data must flow smoothly throughout your retail systems –- without the many limitations of integrations or human intervention.
- Your data needs to be clean and actionable — meaning a single version of the truth is available. And insights are timely, allowing your people and your automated systems to take action.
These three things allow leading retailers to automate giant portions of their operation, making informed decisions based on bottom-line impact. FieldStack's Lean Retail Platform makes this possible.
How will Automated Inventory Management boost your retail profits?
The implementation of retail inventory software like FieldStack can produce massive benefits across three key areas:
- Better inventory performance with optimized stock levels, improved inventory flows, and lower inventory costs.
Inventory optimization is a natural result of automation, offering phenomenal financial benefits.
At FieldStack, we see inventory reductions of 15% or more soon after implementation while improving assortments and minimizing out-of-stocks. Plus, just-in-time inventory replenishment and reduced operating costs improve cash flow and free-up capital for growth.
- Improved customer satisfaction and loyalty
Inventory automation ensures that you have what customers want. This results in robust cart sizes while also reducing attrition.
According to Gartner, 62% of consumers have experienced out-of-stock situations that prevented them from making a purchase. And 32% of those customers switched retailers.
Not only will you prevent your customers from leaving, but you will also use inventory to your advantage to attract new customers.
Automated Inventory software enables customers to buy products where, when, and how they want. Online, in-store, BOPIS, and shipping items quickly from your store — you name it. This is the flexibility and convenience customers will continue to demand.
- Employee engagement
Inventory automation software helps your retail chain optimize labor. This means your staff will be handling tasks that add real value to your customers while making their roles more fulfilling.
Imagine allowing your best staff to be freed from the back room to focus mainly on customer service. Out on the floor, they are creating relationships, offering mentorship, and building store culture. Armed with customer information, detailed product specifications, and product availability data, your staff will feel great about the value they provide.
Take a Closer Look at Automated Inventory Management
Watch the Lean Retail Web Class
Many retailers will spend the next several years mapping data sources, integrating point solutions, and dealing with legacy systems. See how Lean Retail presents an alternative for growth-oriented retailers who want to move quickly and beat the competition.
Download the Lean Retail Case Study
See how one pet specialty client grew sales and reduced costs by implementing FieldStack's Lean Retail Platform.
We'll discuss your goals and explore the impact FieldStack might have on your business. We'll share how clients have implemented FieldStack in as little as 18 weeks. And how they are benefiting from automated inventory management and much more.