Let’s say you’re running a retail business and managing your inventory without any system support. If that’s the case, you might be among the 43% that don’t track inventory or do so manually. Operating in such an environment, along with other challenges, can make it difficult to achieve success.
In general, tracking your retail inventory is of high importance for effective stock management, efficient operations, customer satisfaction, and making informed decisions. It allows you to strike the right balance between supply and demand, capitalize on sales opportunities, minimize expenses, and improve overall business performance.
So, why would you take the risk of neglecting such a critical aspect of your business like tracking retail inventory? Why would you put yourself in the position of delays in shipping orders because they mistakenly sold products that were not in stock? Or being satisfied with only 63% of inventory accuracy like an average retail business in the USA, when you can do better? The reality is that while challenges exist, solutions are readily available. By implementing effective inventory tracking methods and utilizing suitable tools, retailers can streamline their inventory management processes, prevent stockouts, and optimize their supply chain.
This article will elaborate steps involved in tracking retail inventory and discuss some valuable tools that can assist you in this process.
“You cannot run a successful retail business from memory.”Josh Hartford
Organize Your Inventory
Good organization is half the battle won. To effectively track retail inventory, start by categorizing your products. This can be done based on the following:
- product type
- sales velocity
- price range
- expiration date
- location/warehouse, etc.
By creating well-defined categories, you will have a clear structure for inventory management and tracking. Moreover, you will need to establish an organizational system that aligns with your business requirements and makes inventory tracking more efficient. It is crucial to regularly review and update your categories to ensure they reflect any changes in your product range or business operations.
Implement an Inventory Management System
The inventory management system or simply software, provides a centralized platform to manage and track inventory, allowing you to monitor stock levels, record sales, and generate reports. There are several types of retail inventory tracking systems available:
- Cloud-based systems
- Barcode-based systems
- Radio-frequency identification (RFID) systems
- Point-of-sale (pos) systems
- Mobile inventory tracking systems
- Integrated systems
- Analytics and reporting systems
Inventory management software provides a range of features that can improve the overall process. We will list the nine most common ones in detail.
1. Inventory tracking
Inventory management software allows you to track the movement, quantity, and location of your inventory in real-time. It provides visibility into stock levels, helping you identify when products need to be restocked or reordered.
2. Barcode scanning or RFID readers
Barcode scanners or Radio Frequency Identification (RFID) tags can significantly improve the accuracy and efficiency of your inventory tracking. By scanning barcodes or using RFID readers, you can quickly update inventory levels and track item movements. This technology can integrate with your inventory management software, providing real-time visibility into your stock.
3. Stock alerts
Inventory management software can send alerts and notifications when inventory levels reach predefined thresholds. This helps you proactively manage stock levels, preventing stockouts or overstocking situations.
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4. Order management
Inventory tools within the software allow you to manage and track customer orders, purchase orders, and sales orders. This includes order processing, order fulfillment, and order tracking.
5. Forecasting and planning
Advanced inventory management software offers forecasting and demand planning tools. These tools use historical sales data and other factors to predict future demand, helping you make decisions about inventory replenishment and stock levels.
6. Serial number and lot tracking
For businesses dealing with serialized or batch-tracked products, inventory management software offers tools to track inventory based on unique serial numbers or lot numbers. This enables better traceability and quality control.
7. Multi-location management
If you have multiple warehouse or store locations, inventory management software provides tools to manage inventory across different locations. You can track stock levels, transfer inventory between locations, and fulfill orders from the most optimal location.
8. Integration with eCommerce platforms
Inventory tools in software may integrate with popular eCommerce platforms, allowing you to manage inventory across both online and offline channels. Integration offers several benefits, including the assurance of accurate inventory updates and the prevention of overselling.
9. Artificial intelligence
While non-AI retail inventory management systems can still be effective for smaller businesses or simpler inventory needs, AI-powered systems offer enhanced accuracy, automation, real-time insights, and optimization capabilities. Basic and manual approaches, can now be replaced with advanced algorithms and automation.
Additionally, adopting AI in some other segments of your business can directly or indirectly affect inventory management optimization. Battery intelligence can serve as an example for businesses that rely on battery-powered vehicles, devices, or equipment. By monitoring battery levels and performance, you can ensure that your tools are always ready for use and minimize downtime. These tools can provide insights into battery health, usage patterns, and predictive maintenance, allowing you to plan inventory accordingly.
Megaventory is a cloud-based software that offers several benefits to businesses. It stands out from other inventory management software options for retail tracking inventory due to several reasons:
- Feature-rich – offers a wide range of features specifically tailored for retail inventory management. It covers various aspects such as real-time inventory tracking, order management, demand forecasting, stock optimization, and integration with e-commerce platforms.
- Cloud-based and user-friendly – cloud-based software offers the advantage of accessibility from anywhere with an internet connection. It eliminates the need for complex installations and allows multiple users to collaborate in real-time. The intuitive user interface and user-friendly design make it easy for retailers to navigate the software and quickly adapt to its functionalities.
- Scalability and flexibility – designed to accommodate the needs of both small retail businesses and larger enterprises. It offers scalability as the business grows, allowing for the addition of multiple locations or warehouses. The software is flexible, allowing customization to match specific retail requirements and workflows.
- Integration capabilities – integrates easily with popular e-commerce platforms, accounting software, and other business tools. This integration streamlines data flow between different systems, providing retailers with a unified view of their inventory and enabling efficient management across various sales channels.
- Support and training – offers customer support and training resources to help retailers maximize the benefits of the software. The support team assists users in resolving issues or queries that arise during implementation and day-to-day usage.
These factors make it a preferred choice for retail businesses looking for an efficient and effective inventory-tracking solution.
Regularly conduct physical inventory counts
While human errors are very common, this old school sometimes comes as a good addition or a backup system. This involves physically counting and verifying the quantity of products in stock. Regular counts help identify any discrepancies between physical inventory and recorded data, allowing you to correct inaccuracies and maintain accurate inventory records.
Analyze and optimize inventory management
Continuously analyzing your inventory data and optimizing inventory management
is important for effective inventory tracking. Regularly review reports to identify trends, slow-moving products, or excessive stock levels. This information will help you optimize your inventory management by adjusting reorder points, identifying popular products, or implementing sales strategies for slow-moving items.
Be open to continuous improvement and adopt best practices in inventory tracking. Stay updated on new technologies, industry trends, and customer preferences to enhance your inventory management practices.
Tracking retail inventory is the foundation for running a successful retail business. By implementing effective inventory tracking methods and utilizing appropriate tools, retailers can streamline their inventory management processes, prevent stockouts, and optimize their supply chain.
The key steps involved in tracking retail inventory include organizing the inventory, implementing an inventory management system, conducting regular physical inventory counts, and analyzing inventory data for optimization. When selecting inventory tracking systems, it’s important to consider specialized features, industry focus, affordability, and user satisfaction.
In addition to the traditional inventory tracking tools, battery intelligence offers the potential for revolutionizing retail inventory management. By integrating intelligent batteries into tracking devices, retailers can improve inventory accuracy, streamline operations, and maximize profitability.
Achieving success is a result of combining effective strategies with valuable tools, and embracing both established and innovative approaches.
Natasa Dragic — Sass content writer. She is experienced in the hospitality industry, primarily cruise ships. Through the customer experience department, she gained insights into IT and Saas. She merged her passion for writing and her new—found area of interest to build a new career for herself.