Retail businesses need to be ready for the wave of consumers that will come into their stores during the peak shopping seasons. These include the holiday seasons and popular shopping days like Black Friday, Christmas Day, Memorial Day, Mother’s Day, Father’s Day, and New Year’s Day.
The number one thing that a retail business must do to prepare for peak shopping seasons is to optimise their inventory levels to accommodate the influx of consumers in their stores. After all, if your store does not have enough product supply available to satisfy the high consumer demand, you stand to lose substantial amounts of profits. Why would you want to risk that?
Therefore, you must develop effective strategies to keep your inventory stocked with the most popular products that your store sells during the peak shopping seasons.
How to Incorporate Cin7 Software into Your Inventory Optimization Strategies
You cannot manage your inventory levels without the assistance of professional inventory management software like Cin7. This cloud-based software makes inventory management more efficient, thanks to its plethora of helpful tools and features accessible from any location with a high-speed internet connection.
Cin7 allows you to analyse your inventory levels in real-time and forecast which products will have the highest demand and which ones will have the lowest demand. Based on the forecast results, you can stock up on more of the high-demand products while refraining from stocking up on the low-demand products.
Below are four strategies that retail businesses like yours can use to optimise inventory levels during peak shopping seasons using Cin7’s demand forecasting and inventory management tools.
1) Seasonal Demand Forecasting
Part of being a successful retailer is trying to predict future demand. You can do this by observing seasonal trends and other factors relating to your particular business and the industry as a whole, such as special sales, large events, holidays, or weather. In addition, you can look at historical sales data to look for purchasing patterns during previous shopping seasons.
Cin7 has a sales demand forecasting feature that can estimate how many products will be sold within a designated forecast period that you set. It calculates your products’ historical sales data to determine which ones had the most sales. You can even apply various forecasting models to make predictions that align more with your business’s peak shopping seasons.
The five Cin7 sales demand forecasting models are as follows:
- Last Year to This Year – Use your previous year’s sales data to predict the sales growth for every week of the year. You can select specific products or all products from your inventory for your sales forecast.
- Naive – Predict this month’s or next month’s sales data based on the sales of the previous month. You can choose weekly or monthly forecast intervals.
- Moving Average—This is the best forecasting model for predicting seasonal demand fluctuations. You can use this model to predict sales for a particular period based on sales from historical data. Make sure you check the “Include Seasonal Index” box to account for seasonal demand fluctuations.
- Weighting Average – This model is like the moving average model, but it gives more weight or focus to recent trends or specific data points. You can still use historical sales data to make predictions, but periods closer to the current date have more weight when the forecasts are calculated.
- Planned Sales – Create a forecast for all the sales you would like to make after the current date. You can choose various periods for the forecast estimates, such as This Month, Next Month, Next Quarter, This Quarter, and This Year.
Of course, demand forecasting is never 100% accurate because you can never truly predict unexpected circumstances or trends. Cin7’s sales demand forecasting will certainly give you the best chance of accurately predicting which products will sell the most for the upcoming shopping seasons.
2) Coordinate with Suppliers
Cin7 provides a clear visualisation of all your supplier and vendor relationships in one centralised location. You can select any supplier from your list to review your history of orders and payments made with them. All the suppliers’ details, product pricing, and terms of service are available to review anytime.
It is good to have multiple suppliers on standby to refill your inventory in case one supplier is unavailable or does not have the products you need. Cin7 makes it easy to communicate directly with suppliers and ask them questions about their inventory or the orders you submit to them.
3) Automatically Refill Inventory When Needed
Cin7 lets you automate the entire process of optimising your inventory because it can submit purchase orders to suppliers automatically. As the software actively tracks your inventory levels, you can have it automatically submit new orders to your chosen suppliers once you run low on a particular product in your inventory. That way, you don’t have to remember to check your inventory and submit new orders manually. You can just let the software do all of that for you in real-time.
4) Study Your Inventory Turnover Ratio
Cin7 calculates your inventory turnover ratio to see how often particular products are sold and purchased in your inventory. A higher ratio means you are selling more of the products that you purchase for your inventory, while a lower ratio means you have trouble selling the products.
Every industry has a different inventory turnover ratio that is considered good for a business. In the retail sector, a company should seek a high turnover ratio of between 8 and 10. A ratio within this range indicates that the business can move stock quickly due to frequent sales.
Monitor your company’s inventory turnover ratio during peak shopping seasons to determine whether you are successfully satisfying your customers’ demands.
Get Help Setting Up Cin7 to Manage Your Inventory
Bluehub is a digital supply chain consulting firm specialising in helping businesses integrate inventory management tools into their organisations. The firm’s consultants can set up your retail business with Cin7 inventory management software and teach your managers how to use it to optimise your inventory for peak shopping seasons.