Winning the Inventory Game: Strategies for B&M and E-commerce Fashion Retail
E-commerce RetailTech Strategy

Winning the Inventory Game: Strategies for B&M and E-commerce Fashion Retail

By Rajarshi October 11, 2023 - 44 views

Both e-commerce fashion retail and brick-and-mortar players require advanced and efficient inventory management. This not only ensures that they have suitable items in the right volumes when the customer needs them, but also makes sure that they can lower costs, scale sales figures, and boost customer satisfaction levels simultaneously.

The inventory management game becomes even more challenging and critical if you consider the fashion sector which is characterized by rapidly changing trends and consumer preferences, along with seasonal movements. 

How it Stacks Up for Both Fashion Segments

If you take a closer look at the inventory management game for both the brick-and-mortar and e-commerce sectors, these are the insights that emerge. 

  • For brick-and-mortar players, inventory management is crucial for combating under/over-stocking. The latter leads to higher capital being tied up along with increased carrying costs. 
  • There is also the risk of products being rendered obsolete by changing trends. 
  • Under-stocking leads to missing out on sales opportunities along with higher dissatisfaction among customers. 
  • Good inventory management for brick-and-mortar fashion retailers is only possible with techniques like analyzing sales figures, forecasting demand, and efficient systems for replenishing stocks based on demand. 
  • For e-commerce fashion retailers, managing inventory better leads to smoother fulfilment of orders along with keeping stockouts at bay and combating overselling. 
  • E-commerce players face issues in inventory management throughout several platforms, coordination with third-party logistics entities, and higher return rates. 
  • Hence, better inventory management is vital for enabling centralized visibility and control along with automating processes to stay in sync with fast-paced online retail environments. 

There are numerous technology solutions today that enable better and smoother inventory management for companies in both these segments. Let us take a look at some of them below. 

Tech Solutions for B&M and E-Commerce Players

Here are some of the most effective technological solutions that cater to both these categories in the fashion retail space. 

  • Inventory management suites – There are software solutions available for real-time stock visibility, sales tracking, automatic reordering, report generation, analysis, and more. 
  • Forecasting demand – With AI and ML-driven algorithms, companies can forecast demand more accurately through data analytics and evaluation of historical data, consumer behaviour, market trends, and more. 
  • Easier platform integration – Companies can opt for integrations between inventory management systems and retail platforms to ensure automatic updates of inventory levels throughout all channels, thereby enhancing order accuracy greatly and also combating overselling. 
  • WMS (warehouse management systems) – Warehouse management systems help streamline operations and inventory throughout distribution centres and warehouses with optimized packing, picking, and shipping for lower errors and better efficiency. 
  • Barcode and RFID systems – These enable better inventory tracking and monitoring along with helping companies find products swiftly while combating theft, duplication, fraud, and accuracy issues. 
  • Data analytics solutions – There are several analytics tools that will help both brick-and-mortar and e-commerce fashion entities evaluate sales data, identify new trends, get insights into consumer needs and feedback, and take better decisions accordingly. These decisions cover pricing, inventory management, and product and sales strategies. 

Along with these systems, there are several retail technology solutions that are enabling dedicated improvements for fashion retailers across multiple categories. Let us take a closer look at them below. 

Retail Technology Solutions for Better Outcomes

Here are some of the ways in which cutting-edge retail technology solutions will completely transform the segment in the future. 

  • Zero guesswork while sending inventory to warehouses and stores. Businesses can enjoy optimized inventory allocation based on regional/local demand, lowering shipment time and enhancing sustainability through lower carbon footprints. 
  • Easier union of offline and online channels with full visibility and prevention of inventory being neglected or left behind. 
  • Inter-store transfer abilities for easy inventory movement across various locations, thereby optimizing seasonal distribution. Companies can redistribute stocks to high-performing stores from low-performing ones smoothly with these technological solutions. 
  • Optimization tools will enable strategic discounts and offers at suitable times for liquidation of remaining inventory and better sales figures. Data-driven algorithms will analyze data to work out the optimal discount price for every product, thereby lowering sales losses due to ineffective pricing mechanisms. 

Predicting future customer preferences will become more viable with advanced AI and ML algorithms along with data analytics. This will enable brands to offer products that customers will appreciate, while balancing sustainability and diversity alike. AI-based pricing strategies will also help scale up sales figures in relation to demand and supply levels. Gauging or sensing market demand with advanced tools will enable companies to take better strategic decisions as well. 

Several companies are already working on demand sensing engines and newer demand forecasting methods for retail players. Some companies are also looking at omnichannel solutions for various brands in order to streamline inventory management. RFID should be another major game-changer in the near future, enabling companies to enhance their rates of conversion and boost consumer experiences simultaneously.

RFID may enhance the rate of adoption while enabling higher brand security and inventory accuracy alike. These technologies are already being used by leading fashion brands like Zara, H&M, Tommy Hilfiger, Ralph Lauren, and Levi Strauss & Co. They are managing inventory better and tracking stocks in real-time while finding products swiftly at the same time. As a pre-requisite for better inventory management, companies are also looking at technological solutions that can streamline their supply chain processes and leverage opportunities through omnichannel businesses.

Emerging consumer delivery models like online purchase and store pick-up, shipping from store, curbside order pickup, and same-day delivery are also gaining traction. This will further put the spotlight on efficient and accurate inventory management solutions in future years. 

Add to that touch-less POS checkouts (boosting visibility into losses), interactive aspects like NFC tags and QR codes (for enabling special experiences and interactions with consumers), and other emerging trends and you get the picture. Better inventory management is the need of the hour, driven by advanced technological solutions for smoother sales, customer satisfaction, and business growth. Both brick and mortar and e-commerce fashion retailers have embraced these new-age needs with elan and this particular trend should continue for quite some time now. 

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