Making Omnichannel Work: Unifying product, pricing and inventory information

photo from retailpro.com

Omnichannel retail is no longer a prediction; it's a foregone conclusion. Shoppers are demanding cross-channel conveniences and retailers are gearing up and reorganizing to meet the challenge.

But, to put matters simply, the challenge is all in the data — data such as purchase history, inventory status and product information that has been managed independently by different departments and systems.

Despite efforts to get systems "talking to one another," more often than not, customer-facing data fails to match up from channel to channel. Today, according to a CFI Group study, nearly three quarters of cross-channel consumers experience price and promotion inconsistencies between stores and websites under the same banner.

To overcome the shortcomings of legacy master data solutions, retailers are turning to new platforms that offer out-of-the-box, cloud-based capabilities. These solutions build powerful, centralized caches of data that can enrich how customers interact with a brand by assuring that information is continually updated and transferred between channels.

The benefits of a unified, omnichannel e-commerce platform are exemplified in Walgreens' newly updated mobile app that now offers an extended array of personalized and store-specific promotions to customers who shop via mobile and in-store channels. The app offers extensive product information and delivers inventory transparency to in-store shoppers that was previously only available to desktop users.

To View Original Article: http://www.retailwire.com/tip/1362/making-omnichannel-work-unifying-product-pricing-and-inventory-information

Quick! What's Your Inventory Turn?

By Kizer and Bender

That's a fair – and an important – question. Inventory turnover is a measure of the number of times inventory is sold within a period of time, usually a year. There are a number of ways to determine your inventory turn figure, but the easiest way is to simply divide your last year’s total retail sales by your year ending inventory at retail value.

Retailers with a better turn rate achieve that rate because they closely control their inventory. They are empathic about delivery dates so that the product arrives at the store when it needs to be there. And they are pit bulls about managing the inventory on hand and about reducing the selling price when necessary to recoup as much of their investment as possible. Here are some things to think about:

 

Take Control

 

So, how do you control inventory? Sell it at regular price in a reasonable amount of time or at a reduced price to clear it out – it’s just that simple! The only markdown exception is basic merchandise that you must stock every day of the year. Beyond that, reviewing your entire selection of items at least once a quarter is mandatory. With very seasonal items this review needs to happen at least once a month.

 

We recommend that you adopt a bin ticket system: a sticker with a date code that you place on fixtures so that each item has a designated home, and so that you will always know when each item in your inventory arrived. It’s an easy way for you to instantly know which products are selling and which ones are not. You will also want to encourage your store associates to keep the sales floor neat and tidy. They are not just cleaning, they are organizing the inventory. Face it: shoppers are expected to play with the merchandise. They move things around and leave them in places where they are not supposed to be. Don’t let misplaced items account for lost sales or the repurchasing of something you already own.

 

Adopt KIZER & BENDER's Dot System

 

Have you ever been on the sales floor, looking for a certain product, only to find that that merchandise has sold out and has been for weeks? Or maybe that shelf on the sales floor is empty, but there’s a load of what’s supposed to be there in the stockroom. Aside from those bin tickets that tell you what’s supposed to be in that empty spot, you need a backup plan.

 

Adopt the Dot System! Stop by your favorite office supply store and buy a bunch of small red and green adhesive dots. (Avery Labels makes the perfect size.) Place a green dot on the bin ticket if there is more of this product in the stockroom; add a red dot if there is no more of this product available in the stockroom. Instruct your associates to check the stockroom when they come across an empty shelf, and a bin ticket with a green dot – they need to refill that product ASAP. Once there is nothing left in the stockroom they can replace that green dot to a red one. The Dot System will quickly alert you to areas on your sales floor that need your attention.

 

Okay, we know what you’re thinking: “Why do I need to do this? My point-of-sales system tells me all I need to know.”  Now honestly, if you scan your POS reports on a weekly basis then you're good to go. But there’s a BUT coming here, and it’s a big one: You still need to do physical cycle counts to further control your inventory. This is important because non-selling products are expensive to stock; they tie up dollars that you could re-invest in merchandise that will turn (sell).

 

Let’s say you have $500 at retail in items that have sat on the shelf for a year with no sales, throwing off zero profit. Nothing. Nada. Zilch. If you sell these items by taking a 30 percent markdown you would get back 70 percent of those inventory dollars or $350. Now, if you reinvest that $350 in new and in-demand merchandise (that’s $750 at retail markup) and then turn this merchandise two times in one year, your sales would be $1500. Those bin tickets and little sticky dots will make you a better investor of your own money.

 

Encourage Sales with Daily Goals

Having a daily goal will help your keep your associates focused on selling. Set aside a few minutes each morning to complete a Pre-Opening Checklist that outlines everything that’s planned for the store that particular day. This checklist should include the daily overall store sales goal, departmental goals, item of the day, in-store specials, classes, sales events and promotions – anything and everything associates need to know about what’s going on in the store that day. The closing manager can fill out a Store Closing Checklist of tasks that need to be completed before the store reopens the next day. Drop us an email and we’ll be happy to send you customizable templates for both checklists.

 

Hold a Daily 10 Minute Meeting

Call it your Daily 10. Gather associates on the sales floor each morning for a short meeting before you open for business. Take 10 minutes to talk about what you expect form them that particular day. Talk about product, techniques, applications, customer requests, policies, trade shows, industry news, associate experiences, and upcoming events – whatever makes sense that particular morning. Clear and consistent communication will keep everyone in the loop and on their toes.

 

Everyone Needs to Add On

 

We call it Gimme 5!, a daily exercise that’s geared to increase sales. Hold up an item and ask associates to call out five items that could be added-on to this item to increase the sale. Add-on selling is good for you and it’s good for customers – you’ll up your average sale and customers won’t have to return to the store to pick up the additional items they needed to complete their project, but forgot to buy. And if you come across the rare item that had no add-on potential, recommend whatever is on special that week.

 

Manage Your Markdowns

 

Now, about those markdowns… Do you take markdowns in a timely manner? Kick the dogs to the curb before it’s too late? Good for you! Remember, as tough as it sometimes is, the first markdown, the one that makes merchandise more appealing to customers, is almost always the cheapest one to take. Be vigilant about keeping a close eye on your sales floor. If you wait too long you’ll start eating into the real money you have invested and your profit margin dollars will disappear.

 

You are in business to make money. Smart inventory control, plus a focus on selling, keeps your cash less tied up and opens opportunities to keep your assortment fresh. There are many schools of thought on inventory control, how to determine turn rates, flow of items and more – so many that we could never cover them in just one post. But no matter how the calculations are made, remember that the most devastating damage is caused by a lack of inventory management.

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Inventory Management Is Crucial To Your Business

Peter Pishko, VP of Operations at One Step Retail Solutions

Inventory management is crucial to your business; from cash flow to customer service, having the right product on hand at the right time all depends on the careful management of your products. In order to assist you, we’ve put together a successful inventory management guide that can be broken down into the following points:
1) Classification- The breakdown of your inventory should be based upon specific classifications. I often meet with customers that classify their inventory by vendor. Telling a vendor story is a great way to display your merchandise but it falls short when it comes to inventory management. It is your business not ABC vendor’s business, classifying your inventory in the same manner as your vendors could lead to disastrous results.  It does not allow for flexibility in your assortments or is just too dependent on vendor performance.  The viewpoint I like to take is that every retail location can be viewed as a mini department store.  Break your merchandise down by departments and classifications at a minimum, so you can follow historical trends in your assortment. Do not be too specific in your department breakdown, or it will not allow you to view trends easily.

Holiday Bootcamp Webinar on 8.25.15

 

Join us for our annual Holiday Boot Camp webinar to help prepare yourself for the busiest shopping season of the year with these tips and tricks from industry professionals!

The Right Inventory In the Right Place

 

Amazon: No fear of failure

By Daphne Howland | March 18, 2015                                                             


Since the mid-nineties, America’s premier e-commerce site has habitually and utterly disrupted retail. But recently retailers have hit back, with more nimble e-commerce sites of their own, price matches, and delivery options that continue to rival whatever Amazon comes up with.

And while other retailers created and improved their omni-channel strategies, Amazon overplayed its hand and launched an entire phone when a mobile app may have been the better trick.

But Amazon’s willingness to try and fail may ultimately be the key to its continued success. Retail Dive looks at the challenges Amazon faces these days.

 

Showrooming goes in reverse

There was a time when retailers large and small were crumpled by shoppers showrooming—where they would check out the goods they wanted in stores and buy from Amazon at significant discounts. But retailers of all sizes have learned to match prices, provide added advantages to being in store, or both, and now consumers are just as likely to reverse the process: search for things online and head to the store to get it immediately, a process now known as “webrooming.”

That has helped spark a dizzying array of delivery options from retailers—of all speeds and conveniences. Cheap or free shipping with increasingly lower minimums, same-day delivery, and pick-up in-store.

“While showrooming is centered on price, 'reverse showrooming' is all about discovery,” writes Jeff Fagel, CMO of G/O Digital, in Entrepreneur magazine. “Therein lies the real opportunity. As our research found, 30% of holiday shoppers said they always use their desktop/laptop computers to research on-sale items before heading to stores. If that stat isn’t convincing enough, another 25% said they go online to ‘compare products and prices between retail stores’ before making their way to stores.”

 

Prices don’t matter so much anymore

These days, consumers are in the driver’s seat, demanding good value from retailers of all kinds, not just Amazon. For one thing, they’re wising up to the fact that Amazon doesn't necessarily present the best way to shop, and its prices aren’t always the lowest any more either.

Larger retailers like Target, Wal-Mart Stores, and Best Buy have risen to the challenge and have done a good job of matching Amazon’s once-always lower prices.

And retailers like local booksellers, which can’t meet Amazon’s cut rates, have found other ways to please customers with services and loyalty programs that require in-person relationships.

"There is this larger, cultural shift ... to buy local,” Stacy Mitchell, a senior researcher with the Institute for Local Self-Reliance, told CNN. "Rather than pulling back and buying into the idea that they could save a few bucks elsewhere, in many communities, people seemed to make even more of an effort to steer their spending to businesses owned locally.”

 

E-commerce is still being disrupted

And not always by Amazon. In addition to pricing, delivery, pick-up, and return options offered by many retailers, soon-to-launch Jet will be introducing even newer ways for consumers to save money.

Amazon initially freaked out retail by undercutting on price, then disrupted itself (and everyone else) further by offering ways to get free shipping. But Jet, much like bulk e-commerce site Boxed, is adding layers of disruption by providing more variables and choices to consumers. Also like Boxed, Jet plans include nimble mobile commerce, Jet CRO Scott Hilton told Retail Dive.

The site will work with retailers’ inventories to locate items a shopper wants and provide options. The item, price, speed, basket size, and basket mix are all variables that may be under a shopper’s control, and Jet shows the potential savings.

“We have a unique tech angle—live dynamic pricing and repricing,” Hilton says. “There are options that steer shoppers to more economically efficient orders. Jet members will be able to pay more to speed up shipping or waive the right to return to save money.”

Jet will be based on a membership model. At $49 a year, it’s way below Amazon’s $99 Prime membership and will be Jet’s only source of profit.

Of course, Amazon’s Prime membership is a formidable thing: Amazon Prime members spend $1,500 each year, more than double the $625 non-Prime members spend. Amazon doesn’t release its figures on Prime membership, but Consumer Intelligence Research Partners, LLC (CIRP) in January estimated that the retailer has some 40 million Prime members, bulked up in part by free trial offers over the holidays.

And Prime members enjoy a raft of extra privileges that greatly boost Amazon’s value to them, including access to the company’s streaming entertainment and music services and access to its Kindle lending library at no extra charge.

 

Is pure-play e-commerce doomed?

New York University marketing professor Scott Galloway makes a strong case that pure-play retailers, whether just brick-and-mortar or just e-commerce, are doomed. He includes Amazon, whose approach he dubs a "last-man strategy," meaning that Amazon is waiting for its competitors to struggle under the challenges it presents to retail (free shipping, fast shipping, one-click orders, low prices) until they essentially cry "Uncle."

Galloway says that retailers (and delivery services like Uber) are successfully taking on that challenge, though, and that Amazon will stumble as stores beef up their e-commerce and especially their fulfillment options.

Others don't buy that, saying that Amazon is in many ways as special as Jeff Bezos seems to think it is.

"I disagree," writes Oracle's David Dorf in his Commerce Anywhere blog of Galloway's assertions. "Not because the logic is flawed, but rather because Amazon is not a typical retailer. I believe they could be profitable if they wanted to but instead choose to continue investing in widening their competitive moat. Not only is their retail business state-of-the-art, but their investments in AWS, tablets, payments, IoT, etc. are complementary, and help to diversify the business (yes, they can do both). Amazon is not your typical pure-play."

 

The phone, the drones

In addition to greatly increased competition from various directions, Amazon has launched a few high-profile shots that have so far failed to materialize or even outright bombed. Its drone program, for example, has something of a dubious future, considering regulations released in February by the Federal Aviation Administration that would bar the drones Amazon envisioned for its “Prime Air” program.

But perhaps Amazon’s most conspicuous failure is the Fire phone, a pricey device that had little appeal, is expensive, and may have been able to accomplish its aims with a well-designed app.

 

No fear of failure

The thing is, none of this likely matters in the long run for Amazon, for the simple reason that failure is baked into its approach to success.

“What really matters is, companies that don’t continue to experiment, companies that don’t embrace failure, they eventually get in a desperate position where the only thing they can do is a Hail Mary bet at the very end of their corporate existence,” founder-CEO Bezos told Business Insider late last year.

“Whereas companies that are making bets all along, even big bets, but not bet-the-company bets, prevail," he says. "I don’t believe in bet-the-company bets. That’s when you’re desperate. That’s the last thing you can do.”

To view the original article please visit: http://www.retaildive.com/news/amazon-no-fear-of-failure/374996/

10 Things You Should Do This January

From: Retail Concepts

The holiday season has come and gone, and now you are now dealing with the *nightmare* of Christmas past -- the organizing of decorations, returns on returns and leftover inventory. But, before you turn a Santa shade of red, keep breathing and consider our 10 "must-dos" for January 2015.   1. Take a second to breathe. You survived another holiday season. Whew!   2. Take an inventory. So many retailers overlook this, but taking a January inventory shouldn't be negotiable. Take out your scanning guns and get to work. (It won't take long.) It is important to start the year with a clean inventory and have an idea of what you actually have on-hand.   3. Get started with planning. Every month and every year you don't look critically at your inventory, you are missing huge opportunities... You're not identifying key growth prospects and challenges. You're missing out on the opportunity to do more volume (on less inventory!) You're missing the opportunity to bank more cash by making smarter decisions. You're missing the opportunity to take control of your store by having a plan. Make 2015 the year you finally start planning. We promise we'll hold your hand through the process. And we *don't* bite! 4. Have a team meeting. Say "thank you" to your rock star employees that went the extra mile, this holiday season. Get their input on what worked well, and what didn't work as well. Take notes and save them in a place where you can reference them for holiday season 2015.   5. Make New Years resolutions...for the store. Set realistic, measurable goals. Whether they be sales goals, marketing goals, whatever goals -- set them for yourself, your staff and your store. Discuss them at a team meeting and consider steps for implementation and tracking. Don't let these goals be like every other New Years resolution. Follow through.   6. Clean-up. There is no doubt that the holiday season added some wear and tear to the store. Take some time to assess *damages* and start the cleanup process. It's amazing what some new signage or a fresh coat of paint can do to lift the store out of the winter dumps.     7. Use markdowns to your advantage. Stores view "markdown" as a dirty word. Three words...Get. Over. It.  Use a January sale or markdown to clear out inventory that didn't sell over the holidays. Use a January sale to get people back into your store. January can be a great month, too.  8. Enter future on-order. By finally entering all your on-order that you placed months earlier, you can start to re-evaluate if you really need those 6 black dresses to come in, all in the same month.   **NOTE! When you start inventory management/ planning with Retail Concepts (see Step 3) we are going to ask you to do this very step. It's super important to see how much you are bringing in, and in what classifications, to see if orders need to be moved around, trimmed, or canceled.   9. Run a cash-flow report. Do an 8-month cash flow projection to make sure you can pay for all that on-order. Sure, your assortment on line sheets and in the computer may look beautiful, but you need to be able to pay for it...right?   10. Gear up for a great Q1. Scour Pinterest, trade publications, blogs and other media to find something great new lines for Q1, to help give you something other than holiday markdowns to talk about.   Use Retail Concepts and this top 10 list as your checklist to kickoff 2015 in style. We want to make 2015 a successful year for you in-store.   Here's to great New Year!

 

Top 5 Mistakes Brick-And-Mortar Retailers Make That Hurt Their Business

By: Donna Knight, Business Analyst

By now, most retailers know that an increasing number of shoppers are buying online. Does this mean that offline businesses should be afraid? Of course not. There are places where you can still see shopping malls with full parking lots and lines of people at the register waiting to check out. The prevalence of online shopping simply means that brick-and-mortar businesses cannot afford to continue running their business the same way they did 10+ years ago.

As a point of sale consultant, I have worked with retail businesses for 15 years, and I still see old and new businesses making the same mistakes other businesses did over a decade ago. Some of these mistakes include:

1. No Internet Presence: I am always surprised when I come across a well-established business that does not have a web site. Even if you don't want to sell products online, you should at least have a web site that touts your address and phone number, what products and services you offer, and pictures of your store. Many people, like myself, research brick-and-mortar stores online before they actually travel there. And if you don’t want to sell online, you might want to consider whether there are people in other states who are looking for what you sell. They may not have products like yours anywhere near them. You could be leaving money on the table by not selling online. No matter what you decide, you should at least have a simple web site to let potential customers know you’re right there in their neighborhood. 
   
2. Using Outdated Cash Registers: The fact is cashiers can make more sales in a shorter period of time with a computerized point of sale system than they can with a traditional cash register. In addition, the reporting functionality of cash registers, if they have any, are no match for those of even the most basic point of sale system. 
   
3. Little Or No Security Measures In Place: I’m sure your employees appreciate the fact that you put complete trust in them, but no one knows who is dishonest until merchandise starts disappearing without sales receipts to justify their absence. There are multiple security measures you could be using, including:
   
   
   1. Installing security camera systems that not only show you what a salesperson was doing behind the counter, but also what receipt the salesperson was working on at a specific moment in time.
      
   2. Assigning an individual username and password to each employee so you can track their sales or other activity when using a computer.
      
   3. Exercising strict control over what employees can do in your business software.
       
4. Not Collecting Customer Information: One of the things that successful companies do is follow up with their customers. I recently bought a new car. I got a survey from the sales person who sold the car to me and from the car manufacturer. This company clearly cares about the quality of their service since they follow up after your purchase in multiple ways. The best source of future sales is not new customers, but existing customers. You might consider offering a coupon in exchange for your customer’s contact information. If you don't collect any customer information, you have no way to encourage them to come check out your newest merchandise or your latest sale. If the customer didn’t find everything they wanted and doesn’t plan to return, you’ll never know why if you don’t follow up. Building customer relationships should be an important part of your business. It will help increase your bottom line.
   
5. Waiting Years In Between Physical Inventory Counts: How can you be sure you’re not overstocking poorly performing merchandise or underselling due to shortage if you don’t have an accurate count of your merchandise? You should perform an inventory count at least once a year. The largest companies do cycle counts of certain departments more frequently. For example, you might want to keep better track of your best-selling departments so that you can order more merchandise before you run out.

The good news is that all of these mistakes can be corrected. Even if you start by just correcting a few areas, you may see a measurable increase in your sales or decrease in shrinkage. Once you start making small improvements, there’s no limit to how many new insights you can gain into what factors are hurting your business.


Donna Knight has worked for One Step Retail Solutions for 15 years and has been doing training and consulting for 13 years. She is certified in Retail Pro, CounterPoint, QuickBooks Point of Sale, LightSpeed Point of Sale and Retail Teamwork. She has been troubleshooting computer problems for over 20 years, starting out by building her first computer in the 1990s. Donna manages One Step Retail Solutions Knowledgebase. Since she began managing it, the Knowledge Base has gone from 250 articles to 3,071 articles.

To view the original article visit: http://www.retailtouchpoints.com/features/executive-viewpoints/top-5-mistakes-brick-and-mortar-retailers-make-that-hurt-their-business

It’s the Most Wonderful Time of the Year!

Written By: Peter Pishko, VP of Operations

My apologies to Andy Williams; No, not that time, by the time you’re reading this post everything is set and you’re off and running in the great holiday race. Shelves are stocked, everything is decorated and business is booming. I am writing about the next most wonderful time of the year: Physical Inventory.  The key to a successful Physical Inventory (PI) is organization. I have some organizational steps that have proven successful in my past and continue help our customers today.

Start the old fashion way with pen paper and a calendar.

Timeline:

Select the dates that you will be performing your physical inventory count.  Make these dates known now so you are not besieged with vacation/time off requests for that week. Make it a blackout period no one is off. It is very important to have the support of your staff in getting this task accomplished successfully. Taking into account your dates, set some guidelines for your purchasing and receiving areas. You should cut off merchandise delivery for a period of time prior to your PI (I used to cut off two weeks before my count date). A full PI is best scheduled during a period of time when your stock levels are at a low point, obviously less to count and more room for organization of merchandise.  If merchandise is received during this period set it aside and do not enter it into your system until after you have completed your counts.

 

Staffing:

Ensure that you have allocated adequate staff for the task at hand. The physical count should be performed by teams of two, a caller and a recorder. The actual purpose of these individuals has changed from the days of pencil and paper tallies to having teams give credibility to the actual count in terms of checks and balances. It speeds the scanning process along as well (if you are using scanners) and as the count progresses a second count can be completed. It is easier to verify the electronic count with teams of two and expedite recovery after the count is completed.

Maps: 

Draw a map of your store. I use graph paper but this can be done in excel or using various CAD (computer aided design) programs, which is a critical tool for successful preparation for a PI. You probably already have maps of your store(s) that are used for planning layouts, displays etc.  Be sure to include all window displays, warehouses, storage closets, back office spaces,  offsite storage and any place you can possible have stored inventory. The idea of a having a map is to make sure you have gone through all of these locations thoroughly and that everything is counted. Check absolutely everywhere; in cabinets under cabinets on top of shelving units. I have found merchandise in old display units in storage, on top of and under all warehouse shelving (it’s good to check these odd locations where you have found merchandise after the PI has been completed; hidden merchandise is a Loss Prevention issue).  Desk drawers, closets, the rest rooms, I used to check drop ceilings as well. I found a stack of denim in the ceiling once (I’m sure it was just misplaced!). Verify that each of these locations has been checked before your inventory using your map for reference. 

Fixtures: 

Label the map so each of your fixtures, every shelf, hang bar, t-stand and merchandise peg have a number and letter. A corresponding spreadsheet should be created listing each location and fixture; this spreadsheet and map will be used the day of your physical inventory to verify a physical count has been entered and verified by your team. I used to highlight the map to verify that an area has been counted and then check it off on the spreadsheet. Starting with Yellow for first count and then blue, green would mean that an area was finished.  Count your fixture in numerical order not randomly; this is a time for order!

Tags:

Nothing can hold up a physical inventory like merchandise without tags or incorrect tags. It is important to have your staff verify that all merchandise has a bar code label prior to your count. Set up an area in your stock room for your team to place merchandise so it can be properly labeled before your PI and have it retagged. Faded or torn tags should be reprinted so that everything is counted properly.

 If you are scanning tags verify that your scanner can read your barcodes. I once attempted a physical and none of my tags scanned and I did not check prior to the team arriving and so I had to reschedule. It was an expensive mistake I will never make again.

Pre-counts:

Pre-counting merchandise can save you a lot of time. Have a plan for difficult to count items; counting bath beads by hand is not the most efficient way; use a scale.  Chocolates, coffee, soaps and those small items at the POS should be pre-counted.

(Now all of this is simply preparation for entering the counts into your software system and that process will differ based upon the software you’re running.  I am not getting into that process in this post.)

 Remember this is not something that happens every day and it should be made into a special event. I always brought in food throughout the day and held a contest for the team member who found the most items with missing tags etc. The point is that it is a time for cleaning up and getting on to the next page.  Spring cleaning and setting order is actually happening after the holidays at the begging of the New Year for most of you because you are setting the tone for the New Year. Embrace Physical Inventory; it’s the most wonderful thing.

Happy Holidays!