As the holiday season 2023 approaches fast, retailers face a combination of factors that look set to make it a challenging one. Retail is still in the post-pandemic shake-down, with some shoppers loving the return to stores, but others now entrenched with ecommerce as their ‘normal’; inflation is still impacting shoppers’ discretionary spend and the cost of living crisis is making many think twice about purchases they would have made without a care a few short years ago.

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That has translated to most experts forecasting only a modest increase in sales – 3-4% in the US *, the same in the UK ** and virtually flat sales in Australia. *** With some or all of these increases being due to rising prices, volumes are forecast to increase at a lower rate, or even reduce.

Bargain prices will have an even greater influence than in previous years, with more shoppers making their purchases on Black Friday and/or Cyber Monday (BFCM) – 66% say that’s when they’ll spend this year, compared to 49% in 2022 ****

It’s part of an overall trend to complete holiday season purchases over a shorter period of time – the planned shopping ‘window’ for 2023 is 5.8 weeks, down from a pre-pandemic shopping season of 7.4 weeks. ****

Returns have always been high in the days and weeks after gift-giving and are still on the rise in line with increased ecommerce, and the forecast for 2023 is for a further uplift *****

All of these factors means that for retailers wanting to drive business growth over the busiest time of the year, and continue to grow their profits, sound inventory management has never been more important. +

We can see the importance of inventory management during the three key stages of the holiday season:

  • Preparation – before the holiday season rush, retailers need to plan and forecast to ensure they know what is most likely to sell, via which channel and in which stores. They have to purchase the right stock and get it into their stores and warehouses ready for the ‘official’ start of the buying season on Black Friday and Cyber Monday. Inventory tracking and analysis is key to forecasting accurately, and planning to have the right goods to ensure a fruitful and profitable holiday season shopping period.
  • Holiday season shopping – during the busiest few weeks of the retail year, the last thing retailers want is to miss out on sales due to stock-outs, or not having the goods that customers want to buy in the right place. For a business whose entire raison d’être is to sell, not having the right goods on the shelves is a disaster. It’s going to be especially so in 2023, as shoppers move to a shorter shopping window. If they can’t find what they want in a store, they’ll simply go elsewhere. So it’s essential for retailers to know where their goods are, to be able to replenish shelves efficiently, to be able to move goods between stores, fulfil online orders rapidly and enable omnichannel transactions like click and collect/BOPIS.
  • After the holiday season – when stores have to manage returns, trying to get items back on the shelves for resale, or returned to suppliers, as efficiently as possible.

The role of POS systems with inventory management

The most effective way to ensure efficient management of inventory is through retail technology – a POS system with inventory management software. In order to deliver maximum benefit, an inventory management system should ideally:

  • Be part of an integrated retail POS and inventory management platform – so that information flows seamlessly between the point of sale, inventory tracking and analysis/reporting functions.
  • Be easy to use, for instore and back office staff.
  • Run on a handheld device – so that staff can readily and rapidly update inventory, check inventory, pick items in the warehouse, all with barcode scanning for fast and accurate inventory tracking.
  • Provide a single view of inventory – a single stock pool across all brick and mortar stores, warehouses and distribution centres enables full visibility of stock, and efficient movement of items between locations.
  • Automated inventory control – such as stock reordering when levels drop below a trigger point.
  • Provide accurate meaningful data for analysis and reporting.

Retail technology that offers strong inventory management can give retailers:

  • Streamlined operations – tracking goods, automated processes and insightful analysis.
  • Increased profit margins – balancing supply with demand to eliminate overstocking and understocking.
  • The best customer shopping experience – shoppers knowing that they’ll be able to buy their ideal gift, whenever and however they want to purchase.

All of which add up to the best Christmas gift retailers could receive – business growth.

What is the role of hand-held devices in inventory management?

Hand-held devices, with built-in barcode scanning capability, can be used to streamline and speed up inventory management throughout your retail operation. Warehouse staff can use hand-helds to check incoming goods against orders, to put goods away in the warehouse and to pick them for sending out to stores or to fulfil customer online orders. In the store, they can be used to look up stock levels when helping customers in the aisles, or to rapidly carry out stock counts for accurate record keeping.

What are the benefits of having inventory management integrated with POS?

The point of sale captures sales information, which is essential to the accurate and timely updating of stock information. Having the two functions deeply integrated as part of the same retail technology platform, along with other functions such as reporting, and back end finance,  means information can be seamlessly and efficiently passed between functions for streamlined, accurate recording.

References:-

*https://www.reuters.com/markets/us/us-holiday-sales-grow-slower-pace-this-holiday-season-report-2023-11-02/
**https://www.globaldata.com/media/retail/uk-christmas-retail-growth-at-3-4-in-2023-to-fall-short-of-last-years-increase-says-globaldata/#:~:text=09%20Oct%2C%202023%20UK%20Christmas,last%20year’s%20increase%2C%20says%20GlobalData&text=As%20the%20festive%20season%20approaches,9.3%25%20increase%20in%20retail%20prices.
***https://www.roymorgan.com/findings/9341-ara-roy-morgan-media-release-pre-christmas-retail-sales-2023
****https://www2.deloitte.com/us/en/insights/industry/retail-distribution/holiday-retail-sales-consumer-survey.html?id=us:2ps:3gl:holret23:awa:cb:101823:holiday%20shopping%20predictions:b:c:kwd-341265870679&gclid=CjwKCAjw15eqBhBZEiwAbDomEis5JkxUbw6F-pJFExSgz80bo9kdC928Ep5kj4bbfZi6JmqDrLvmBhoCQRkQAvD_BwE.
*****https://www.insiderintelligence.com/content/us-holiday-2022-retail-returns
+https://www.forbes.com/sites/forbesbusinesscouncil/2023/06/21/from-stockroom-to-sales-unlocking-profitability-with-strategic-inventory-management/?sh=37ad90833493

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