Retailers haven’t seen much of their customers in 2020. Shopping trips have been limited to essential items, with many stores completely closing their doors to the public and offering delivery, curbside pick-up, or online only shopping options. While restrictions are beginning to ease, the bigger question is how the recession, supply chain disruptions, and of course, customer frame of mind will impact business going forward.
Retail with its tight margins and constant change has always faced a key challenge in swiftly and correctly managing inventory turns. This affects everything from profitability to business survival. Identifying and managing costs across inventory, assets, and job costs can differ exponentially between online and brick and mortar stores. Add the ongoing fluctuations of seasonality, contradictory consumer demands, and cultural differences across geographies on top of economic shutdowns and a recession, and inventory turns become an even more complex and frustrating challenge.
Managing Inventory in an Omnichannel World
With 2020’s rapid shift to online versus in-store sales, many retailers are struggling to stay on top of costly inventory, particularly if they are trying to balance the option of both channels for the future. Maintaining existing consumers—let alone gaining new customers in this environment—requires staying on top of the latest trends in retail strategies. If that is not enough, retailers also must compete with the currently recession-proof giants such as Amazon to stay relevant and profitable.
Connecting Financial and Operational Reporting with Inventory Turns
For the office of the CFO, one way to help you take better control of your inventory management is through financial and operational reporting—where critical links between costs, assets, and channels can be monitored and analyzed—enabling you, the retailer, to stay ahead of new and unpredictable shifts in the post-pandemic consumer’s demand.
Uncovering the links between financial and operational reporting and inventory related costs gives your business a true picture of how inventory turns impact your bottom line. Implementing strong financial and operational reporting associated with inventory can yield many benefits.
- Balancing inventory costs and turns across seasonality, geographies, calendars, product lines, and item popularity
- Managing costs of distribution channels across both online and brick and mortar stores and understanding the channel (home sales, online, big box, specialty retailers)
- Managing budgets and margin control over pricing, costs, and goods sold
- Managing reporting across conglomerates, stores, cost centers, and ERP systems
- Managing timeliness of product sales for seasonal or perishable goods
- Preparing ad hoc reporting to drill into turns, margins, inventory shrinkage, etc.
- Managing adjustments for inventory on loan, shipped to another store, in transit, etc.
- Managing metrics like inventory turns, gross margin, margins by count, geographies, distribution channel, cycle counting and inventory decreases
What the Right Financial and Operational Reporting Can Do for You
How do you gain a superior level of insight to take control of your financial and operation reporting? Look for a strong financial reporting and analysis tool that offers the flexibility to deliver:
- Better insights to help maintain a long-range and continuous revenue stream
- Better knowledge regarding status of distribution channels, online or store profits, how they are affected, and where they can be improved
- More reliable financial outlook across the business environment and economy to protect against loss, insufficient sales, or consumer fluctuations
- Easier analysis from inventory cycle counting whether online, brick-and-mortar, or both, by consolidating all the data in one place to simplify financial performance audits
- Deeper insights into store, online, and overall sales performance through better integration across ERP data and faster access to data
- Better cost analysis for fast-changing styles or during new campaigns
Improve your retail inventory management with the right financial analytics and reporting tool to connect your business metrics to inventory. insightsoftware provides fast, accurate insights into data that you need to reduce inventory turns and flexibly respond to consumer demands. Ad hoc reporting and drill-down capabilities to the transaction level allow you to quickly find and fix reconciliation issues and investigate and resolve variances without involving IT, saving you time and allowing you to gain more insight from your data. Find out how by requesting a free demo.