For retailers, inventory planning matters. Inventory is your largest asset and has the greatest impact on your business cash flow. If you plan your inventory well, you can reduce your overhead costs and increase cashflow. This article will help you understand the essentials to inventory management for retailers.
Cashflow sitting in old or out-of-season inventory is money that could be better used elsewhere. Many successful retailers don’t carry a lot of excess stock to have the flexibility to introduce new products more quickly. This is particularly true in industries such as grocery where products can easily expire or fashion where products can be trendy. All products are worth less over time as they get “stale.” But in fast-moving sectors, products have shorter life cycles, meaning they lose their value faster. As such, carrying too much stock means an increased chance of getting stuck with products that require deep discounting to free up your cashflow. Consider this the next time your suppliers offer you better prices to buy a larger volume of product.
Remember though, keeping your inventory “lean” doesn’t only mean keeping stock levels low. If stock levels don’t match your sales demand and are kept too low, you will constantly have out-of-stock products. You want to avoid stock-outs as they are costly to retailers. They lead to lost sales, wasted marketing efforts, and unhappier customers.
There are many different inventory management methods but ultimately, it comes down to one thing, “do you have stock when you need to sell it“.
In the end, selling at any price is not the objective. To be profitable, retailers need loyal, repeat customers that don’t require expensive marketing campaigns to get them to buy. When you think of it this way, inventory is an important part of your overall customer service. Customer service is the new marketing as every touch point impacts how your customers view your business. Less stock-outs means higher sales in-store and faster fulfillment for online orders, all of which means better customer satisfaction.
What Can I Do As A Retailer To Better Manage My Inventory?
If you’re a small-to-midsize retailer and all of this sounds scary, don’t worry. Not all retailers have the resources of the big brands, and regardless of your size, there are things you can do to better plan your inventory.
1) Make Sure You Always Have Access To Real-Time Stock Levels
You can’t manage what you don’t know. With an increasing number of sales channels (e.g. e-commerce, pop-ups, etc.), a retail POS that can handle “unified commerce” with real-time stock levels is essential to inventory management in today’s market. Unified commerce is just another way of saying a total retail management platform that you can log into from anywhere that offers a single view of inventory, sales, and customer data across an entire business in real time. As expected, the need for real-time inventory data grows as the business and transaction complexity increases.
2) Use Minimum Stock Levels
Use minimum stock levels, also known as safety stock levels. In many retail point-of-sale systems, you can assign a minimum stock level to every product in your store which you can easily track in comparison to your actual stock level. You should also be able to easily make mass updates in your POS when you review your minimum stock levels every 3-6 months.
3) Track Inventory Stock Levels By Supplier
Track inventory stock levels by supplier so that you can consolidate purchases to minimize stock-outs, lead time, and shipping costs. This will also allow you to more easily meet supplier minimum order amounts.
4) Track Inventory Turnover
This is essential to inventory management in retail. Basically this refers to how many times a product is sold and replaced over a certain period of time. This can be tracked at a very high level (e.g. including the entire store inventory) or at the product / category level. There are different ways to calculate turnover but whatever approach you use, consider using Cost of Goods Sold instead of Sales as you will get a more accurate measure as your result will not include markup. For example:
From Jan-Mar, this company had inventory turnover of 13.33. This is calculated by taking the Sales$ for this period and dividing it by Average Stock Value$. Now you can convert this to “inventory days” by taking 365 / 13.33. So from Jan-Mar, inventory turns 13.33 times a year and is on hand for approximately 27.38 days. If you run the same calculations for Apr-Jun, inventory turns 18.33 times a year and is on hand for approximately 19.91 days.
From these two examples, the higher your turnover rate, the more efficient you are, since it means that your inventory is being sold faster and you have more cash flow in your business. A lot of people forget that the cost of inventory is not just the original purchase cost of an item. It includes the ongoing cost TO SELL that inventory. The longer it takes to sell something, the greater your real inventory cost as your money is sitting in that dead stock instead of products that are in high demand.
5) Determine Your Ideal Reorder Days
It is always a good idea to estimate the lead time required to reorder products in time for suppliers to produce OR deliver them before you are out-of-stock. For example, if you know it takes two weeks to receive orders from a particular vendor, make sure to factor that lead time into your reorder timing. In the beginning, you don’t want to cut it too close as unexpected delays can happen (e.g. snowstorms in the winter). This is especially true if you are ordering for a busy time of year such as Christmas. For some retailers, losing a week during the holidays might mean the difference between Christmas and Boxing Day pricing.
Inventory Management – Essential For All
A lot of independent retailers or businesses often think that they are not large enough to use inventory management tools and try to use spreadsheets to keep track of their goods. While this can work in the beginning, as your inventory items grow in both size and attributes, you will either overstock (to prevent stock-outs) or have constant back orders. You will also lose out on freight savings and volume discounts you might have received if you had consolidated your vendor orders more efficiently.
Start improving your operations by following the key essentials to inventory management we’ve listed above. Then when you’re ready, start to slowly automate these functions one-by-one. With the proper point-of-sale system, you will be able to spend less time managing your inventory and more time selling it.
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In recent years there has been a steady increase in the number of small businesses. According to Statistics Canada, over 41% of GDP in recent years has been generated from small businesses. Ontario alone has over 400,000 independent businesses. For Small Business Week, we wanted to shine a spotlight on small businesses we have worked with and share their stories with you.
Ruffin’s Pet Centre (Tillsonburg)
Ruffin’s Pet Centre (Tillsonburg) is the largest pet store in Tillsonburg and sells a variety of pet products such as pet food, aquariums, and pet toys. They are known for their excellent customer service and attention to detail. Google reviews of Ruffin’s Pet Centres also show that they are always willing to go the extra mile for their customers.
When the COVID-19 pandemic started, Ruffin’s needed to find a way to quickly showcase their products online for store pickup. Because pet food is so bulky, traditional e-commerce solutions that focused on ship-out were not suitable. To stay profitable, Ruffin’s Tillsonburg started selling their products online with TAKU but only for local store pickup. By using TAKU eCommerce, Ruffin’s Tillsonburg is now able to offer pickup at the store within 30-minutes and direct shopping right from Facebook Shop and Instagram Shop.
Kam Wai Dim Sum is a Vancouver-based dim sum wholesaler, in-house deli, and retailer. Though they work with T&T Supermarket to bring the joys of authentic dim sum beyond just their community, they also treasure the connections they have forged with their local community. They are proud to keep their dim sum affordable for locals as well so that people always have access to quality dim sum.
Hutchings Farm is a local, family-run farm based in Pefferlaw. They harvest garlic, eggs, vegetables, and so much more. They are a hub for local farm goods and are known for their friendly service and fresh products. Since moving online with TAKU eCommerce, they have been able to offer a 24/7 catalog to their customers and to organize easy pickup options for their customers.
For Asian Heritage Month, we wanted to highlight one of our favorite clients: Kam Wai. They are an Asian-owned frozen dimsum wholesaler and deli business based in Vancouver.
Papa Liu first opened Kam Wai’s doors in 1990 in the heart of Chinatown (downtown Eastside of Vancouver) because of the demand for good quality dimsum in BC’s growing Asian population. At present, Kam Wai is now one of the largest dimsum wholesaler businesses in British Columbia and supplies frozen dimsum to major retailers such as T&T Supermarket.
“Cantonese food is meant to be shared.”
Despite their growing business, Kam Wai keeps their pricing modest because they want to keep their dimsum affordable for their community. TAKU Retail helped make their menu more accessible by offering multi-language options so that non-native English speakers were able to understand the menu and itemized receipts.
Since renovating and implementing TAKU Retail, Kam Wai has almost doubled their daily sales. Director of Marketing of Kam Wai, Nick Sommer says that TAKU Retail’s inventory management made it easy for them to track and analyze daily sales. For Kam Wai, this means being able to keep tabs on what is selling well and to keep offering their dimsum at affordable prices.
“Yummy in the tummy, faster than fast food”
Kam Wai customers post positive reviews across different social media platforms. This is partially because of the easy and quick checkout process. TAKU Retail’s line-busting features help Kam Wai staff handle a high volume of orders efficiently in their busy store.
Google Local Inventory Ads (LIA) significantly increase retail store sales by turning nearby shoppers who are searching online into in-store customers.
River Island, Best Buy, and Williams-Sonoma Inc. are examples of retailers who have successfully leveraged Google LIA together with their POS systems to grow foot traffic and sales. Now, smaller retailers have the chance to do the same with a minimal budget.
Keep reading to find out how you too, can take advantage of this opportunity to increase your retail sales.
Local and Mobile Searches Lead to In-Store Purchases
There are two factors that make Google LIAs so effective:
For retailers, this means that there is a lot to be gained by being easily found online. The challenge then becomes figuring out how to give target shoppers the answers they are looking for at the exact moment that they are searching.
This is where Google Local Inventory Ads come in.
Google LIAs helps store owners succeed in these micro-moments – by capturing shopper intent and most importantly, the sale.
What are Google Local Inventory Ads (LIA)?
Local Inventory Ads showcase product and store information to nearby shoppers who are searching on Google. They are different from traditional Google ads as they are designed to drive shoppers to your physical store. While users also have the option of purchasing online (if you have an e-commerce store), LIAs are meant to attract nearby users and only show when a shopper is within a certain range of your store.
When shoppers click on an ad, they are taken to the local storefront page which can be either a Google-powered product listing or your own e-commerce site. Here, they can view other in-stock merchandise as well as important store information such as business hours, directions, current promotions, and more.
Below is an example.
When I search for “laundry detergent near me”, Local Inventory Ads appear next to the search results. Both Canadian Tire and the Home Depot are currently running LIA campaigns for laundry detergent (pointed out in red below).
I know that at Canadian Tire and the Home Depot, the items are definitely in stock because of the “in store” label.
How do Local Inventory Ads Work?
Let’s take a look at the example below.
Canadian Tire is looking to increase foot traffic to their physical stores. So they’ve purchased Local Inventory Ads hoping to target local shoppers like me. They’ve set up a Google Shopping campaign that showcases ads to shoppers within a 45 km radius.
As you can see above, I’ve made a search on my mobile phone for a ceramic stove top-cleaner. Like most people (87% of shoppers), I frequently turn to a search engine as a resource for product information.
By looking at the search results, I can see that Canadian Tire has what I need in stock and the closest store is only 2 km away.
I decide to head to the store because I am certain that they have the product that I need. A store associate is able to tell me more about the product in-store and even recommends I try out a surface scraper. After my conversation with a store employee, I’m happy to purchase both products.
LIAs let local shoppers know that you have the items they are looking for – at the exact moment that they are searching for it. The ads even create a sense of urgency and encourage shoppers to act by letting them know when certain items are low in stock.
2) Advanced Geo-targeting Capabilities: Target local shoppers who are actually nearby the store and are looking to purchase. Advanced geo-targeting capabilities allow retailers to reach target shoppers within a certain km radius.
3) Measure Campaign Results: See how your ads are impacting your bottom line. Monitor the effect LIAs are having on foot traffic and in-store sales – and adjust your campaign bids accordingly.
4) Gain a Competitive Edge as an Independent Retailer: In the past, Google LIAs were only available to national retailers. But now, independent retailers have the ability to run high-performing ads on Google with a minimal budget. For as little as $150-$300 per month, store owners have the ability to drive local foot traffic and increase store sales.
5) Automatic Ad Optimization: To minimize marketing costs, LIAs automatically turn off when products sell out. Not only does this benefit your bottom line, it also results in a better shopping experience for your customers.
To learn more about how your retail store can easily implement Google LIAs to increase foot traffic and in-store sales, click here.
A point-of-sale system is an essential tool for retail stores; from speeding up the checkout process to simplifying inventory management, store operations become more efficient with a retail POS software.
But a good retail POS system can help you do much more than just manage your store operations or track sales history – it can also help you sell more.
Selling More on Autopilot
More people are searching online prior to buying (or “pre-shopping”) than ever before. According to Google:
3 out of 4 shoppers use a search engine to find a business
7 out of 10 people made a purchase from a business they found using a search engine
Which means that getting your retail store to show up on Google is necessary in order to drive foot traffic and increase store sales. This is where integrating Google to your retail POS comes in.
3 Benefits of Integrating Your Retail POS with Google My Business
1) Be Found on Google
Building a strong online presence on Google starts with your store’s Google My Business listing.
Google My Business (GMB) is a free online listing service. It ensures that your store shows up in online local searches and lets you manage how your retail store appears in both Google Search and Google Maps.
Here are a few reasons why GMB is so powerful:
GMB listings dominate the first page of Google search results
They appear based on a viewer’s actual location
They appear in local searches for business types on both Search and Maps (for ex: if a user searches for “pet stores”)
A direct GMB integration allows you to set up and manage your Google My Business listing right from your retail POS software. Not only does this reduce the time and effort required to set up a listing, it also helps your store appear higher up in Google Search and Google Maps when local shoppers make relevant searches to your business.
2) Advanced Targeting with Google Local Inventory Ads (LIAs)
With automated POS integration to Google, retailers now have the power to reach out to shoppers when they are near one of their stores.
By running Google Local Inventory Ads (LIAs), stores are able to drive in-store sales with online product ads that allow retailers to attract nearby shoppers at the right moment – when they are ready to buy!
Not only do LIAs only show when local shoppers are within a certain distance from a store, with an automated POS integration, LIA ads run directly from your POS and only show when products are in stock. This means that LIA ads automatically turn off when products sell out to help minimize your marketing costs. LIAs even encourage urgency by letting nearby shoppers know that stock is low and that they need to act.
According to Google, shoppers prefer and act on location-based ads:
While LIAs were only available to national retailers in the past, with the TAKU-Google LIA integration, even independent stores can now run
high-performing and affordable ads for all of their products. TAKU POS will handle the entire basic campaign – which means that merchants can start running products online with only a few clicks. Set your daily budget and the geographic area you wish to target and you’re set! There’s no need to manually input or upload product information to Google.
Even if you’re not ready to buy digital ads yet, the TAKU-Google integration helps you showcase what your store sells online to shoppers. By using Google’s “See What’s In Store” feature, your in-stock products will be visible underneath your GMB listing. This feature is automatic and completely free to merchants using an integrated POS.
Give shoppers an additional way to discover what your store sells.
If you are not making use of digital marketing tools, you are missing out on a huge chunk of customers!
Shoppers are now searching for retail businesses like yours online. According to Google:
3 out of 4 customers now use a search engine to find a business.
7 out of 10 customers made a purchase from a business they found using a search engine.
This is why digital marketing strategies are essential for retailers who are looking to drive foot traffic and sales.
To learn more about the benefits of digital marketing for retail stores, click here.
Below are three strategies you can leverage to build an online presence and attract more shoppers.
3 Online Marketing Tactics that Increase Foot Traffic
1) Local Directory Listings
Local search results present a huge opportunity for retail stores; according to Google, 80% of people now use a search engine to find local information.
This is why local directory listings are so valuable to retailers as a digital marketing tool – they help optimize your retail business for local search (or local SEO). In simpler terms, they help you be found locally by making your retail store appear in search results.
Directories feature business information such as your address, contact information, store hours along with other useful features such as customer reviews, images, videos, and preferred payment options.
Not only do local directories help you appear higher up in search results – they also help your business stand out among big box stores and online retailers.
As mentioned above, most retail stores haven’t optimised for local search while online competitors can’t compete with your store locally. Meaning – there is a competitive edge you can gain by focusing on local SEO.
To learn more about the basics of SEO, click here.
The following are some online directories that will help you get noticed in local search results:
Google My Business
Bing Places for Business
2) Buy Online, Pick Up In-store (BOPI)
Buy Online, Pick Up In-store or BOPI (also commonly known as click and collect) takes advantage of consumer shopping habits to drive foot traffic.
To summarize, BOPI drives foot traffic while offering several advantages to retailers including:
Higher rates of impulse purchases
Decreased shipping costs
Lower return rates
3) Google Local Inventory Ads
Google Local Inventory Ads are one of the most important digital marketing tools that retailers can leverage to drive foot traffic. This is because LIAs give retailers the unique ability to display a store’s in-stock merchandise – at the exact moment that a relevant local search is made.
When a shopper makes a relevant product search, and that product is available at a local store, they will be shown a local inventory ad with an “in stock” label.
Once that shopper clicks on the ad, they will be taken to the Local Storefront page. Here, they will be given more information about the product and your physical store including other in-stock inventory, current promotions, store location, and hours.
So by implementing Google LIAs in your digital marketing strategy, you will be able to target local shoppers and drive relevant traffic to your store!
We hope you found this article helpful!
Would you like to learn more about how to increase your retail store’s online presence?
Good news- we are hosting a breakfast seminar exclusively for GTA store owners! We will be discussing how you can attract more local shoppers with POS technology among other important topics. To learn more about the event and to register, click here.