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Inventory is at the centre of your retail business and keeping track of it is a critical job. You can’t sell products you don’t have in stock, and you don’t want to take up valuable warehouse and shelf space with items that are slow sellers. Yet, surprisingly, 43% of businesses use manual methods or don’t track inventory at all.
But if you sell across various platforms or through multiple locations, relying on paper logs or spreadsheets and periodic physical counts opens the door to disappointed customers or wasteful resource allocation. Using a multichannel inventory management system that keeps up with your business in real time is essential for tracking and managing your inventory and can yield benefits that help your bottom line.
What is multichannel inventory management?
Multichannel inventory management is the process of tracking inventory that is sold and stored across multiple sources. Using cloud-based software, the system syncs all stock levels for an accurate and single source of truth.
Multichannel inventory management is an invaluable tool for today’s retailer, who likely sells across many channels, such as in-store, online and on social media. Cloud-based systems also manage inventory across locations, which is important if you have multiple stores, hold pop-up or mobile sales or sell wholesale to other retailers.
What are the benefits of multichannel inventory management?
Since manually managing inventory across platforms and channels can be challenging and time-consuming for retailers, multichannel inventory systems offer a variety of benefits.
Real-time visibility
Imagine a customer comes into your store and purchases the last lavender candle you have in stock. A few minutes later, an eCommerce shopper buys the exact same item before you had the chance to update your inventory. Multichannel inventory management helps you avoid this predicament by automatically syncing levels across all platforms, hiding out-of-stock items on your site.
Having real-time visibility across your business is also key for maximising profits during peak seasons. You can easily determine which products need to be reordered to avoid lost sales and automate the process for greater time savings. Visibility also helps you avoid overstocking items that are stale or can be redistributed to other locations.
Improved customer service
Not being able to fulfill that lavender candle order might lead to an upset shopper – one who may turn to your competitor now or in the future. By maintaining accurate inventory levels, you reduce the risk that your customer will shop somewhere else.
Multichannel inventory management also enhances customer satisfaction by improving delivery options. For example, real-time stock levels can help you maximise buy online, pick up in-store (BOPIS) by directing customers to the location where the item is in stock. You can also offer to ship or deliver an item to a customer’s home from the warehouse or store that is closest to their address, reducing shipping times and cost.
Valuable insights
Multichannel inventory management also provides key insights that can help with business decisions. For example, you can analyse past sales data to get a clear understanding of products that are in high demand. Data can inform new product selections by identifying categories that are most popular with your customers.
Insights can also help you forecast the optimisation of inventory levels to ramp up during busy cycles and scale down during off seasons. Data helps pinpoint slow-moving products that can be discounted with a flash sale and removed from automatic reorders.
Cost savings
If you sell an item that is out of stock, you’ll need to refund your customer’s money unless they’re willing to wait until the item is replenished. In today’s world of overnight or two-day shipping, consumer patience isn’t required. Cancelled sales can be costly and impact your bottom line.
Keeping inventory at optimised levels helps you save money that might otherwise be locked up with dead stock inventory that is taking shelf or warehouse space and may later need to be liquidated. Multichannel inventory management can also help save money by allowing you to ship an item from a location closest to the customer, reducing transportation costs, which is key for retailers who offer free shipping.
Business growth
Multichannel inventory systems can help you scale your business by making it easier to sell across more channels. By leveraging tools that automatically sync sales and inventory across channels, retailers have more room to expand to new platforms and reach new customers with an omnichannel commerce strategy.
How to manage inventory across multiple channels
Multichannel inventory management starts with a cloud-based inventory system that integrates with your retail point of sale. The system should offer real-time analytics to ensure your stock levels are automatically tracked and adjusted every time you make a sale, receive a return or get a new shipment.
Your retail POS system should sync with other platforms and channels you’re using to sell, whether that means connecting to your online store, social channels or to POS systems at your other brick and mortar or warehouse locations. When you make a sale or log new stock into your POS, your inventory count across all sales channels and locations automatically syncs to reflect the change.
Choosing the best multichannel inventory management software
As you look for a multichannel inventory management software, it’s important to choose a system that simplifies the inventory management process and has features that can help you grow your business. Here are some things to consider:
- Automation capabilities: Your multichannel inventory management system should automatically adjust your inventory levels whenever your stock count changes. But automation capabilities don’t stop there – look for a system that allows you to set alerts when inventory dips below a certain level, generates automatic purchase orders with your vendors at certain inventory thresholds and has the ability to generate daily stock-alert emails, so you always know where your inventory stands.
- Ease of use: Look for a system that’s user-friendly and allows you to easily upload product photos from a mobile device or iPad to your POS and catalogue them with descriptions. This makes it easy to identify and search for products in your inventory library and simple to expand your product line.
- SKU generation: Systems that auto-generate SKUs help you catalogue new inventory when you add a new item variation or create a barcode label. Auto-generating SKUs can help reduce costs and improve the accuracy of your data so you can ensure individual inventory is meeting your business objectives.
- Analytics: Inventory management software should offer robust real-time analytics that can help you with inventory forecasting and inform decision-making, including sales, profit, cost of goods sold (COGS) and sell-through reports. You should also be able to access these analytics from any device connected to your POS to track your business analytics at any time, whether you’re in the store or not.
- Integrations: Your system should offer easy integration with the other tools you may use, such as staff rostering, loyalty programs and accounting software. The software should also offer a variety of delivery options, such as in-store pickup, that can help you boost sales with local customers.
Overall, your inventory management software should allow you to easily create a centralised hub from which to operate your business for greater visibility and control. As your business grows, your multichannel inventory management software should scale with you, offering efficient methods to sell across platforms and channels.
Learn more about how Square for Retail can help you manage inventory across channels to reach more customers, save time and scale your business.
This article is for informational purposes only and does not constitute professional advice. For specific advice applicable to your business, please contact a professional.
