“Out of stock” is the last thing customers want to hear when they visit a retail store. Market analysis shows that local stores are often unable to forecast the right amount of goods they should keep in stock to meet the demands of customers; this is one of the prime reasons why buyers have shifted to online retail websites like Amazon and Flipkart to buy not just high-end products but also daily necessities, like groceries. These websites have the perfect demand and supply ecosystem needed to fulfill the needs of modern buyers. Neglecting demand planning can be detrimental to any business.
Demand planning is an absolute necessity for retailers who get their goods from third-party vendors. As the production of the goods is not in their hands, they have to be sure of when and how much they must order to fulfill customer needs. The following tips can help you with effective demand planning.
Go through the historical data (previous years’ stock levels and orders) to find out which goods are high in demand at specific times of the year. For example, fruit cakes might be more in demand around Christmas than at any other time of the year. Stock goods as per the analysis to always be prepared to meet customer demands. If you lack enough space or equipment to create a safe inventory for the goods, consider getting an instant business loan. The premium financial organizations can provide you collateral-free business loans for the purpose.
Also Read: How To Run A Successful Retail Business?
Seek advice from experienced employees or consultants to get better insights into future demand. Keep all the factors in mind that might impact the future demand for goods. Using qualitative data for demand planning helps you stay ahead of the competition. If you are a small company aiming to become a brand, qualitative demand forecasting can be an extremely important strategic move for your business. Government schemes like Credit Linked Capital Subsidy and Technology Upgradation Scheme (CLCS-TUS) can help you acquire the right technology to improve product quality, which in turn will help you compete with high-end brands. It is estimated that almost 15% of inventory distortion happens due to data discrepancy and human errors. Getting updated software can help you a lot in this regard.
Focus on Complementary Goods
Understanding the link between the sales of one kind of goods and another is extremely important for successful demand planning. If the sales of coffee are increasing at your store, you must keep in mind that the sales of milk and sugar will also increase. So keeping more stock of only coffee will not help; you need to keep more stock of the other two complementary goods as well. It is also very important to have a centralized data-management system. This will ensure that every department is aware of the sales and demand for related products. Update the technology used at your store and automate the data tracking system. This will help you make sure that the data is centralized, consistent, and accurate.
Get a Contingency Plan
All your predictions and efforts could go to waste due to some unforeseen event. You cannot avoid market risks, and this is where a contingency plan is required. Have enough resources in hand so that you are capable of dealing with any event. For example, if you are planning to have large stocks of any product during a particular season, ensure that you have enough space to store the goods in case the sale does not go as per the plan. Otherwise, you will incur losses if the goods are wasted. So why wait? Follow the above tips and always maintain optimum stock levels.
The retail store business in India is no longer what it used to be a decade ago. To keep up with the growing needs of modern customers, you now need to regularly invest in your business. An unsecured business loan for a retail shop can be a great choice for store owners looking for a source of funding for their operations. At Indifi, we offer tailor-made solutions to perfectly suit the specific needs of your business. We partner with business aggregators and payment facilitators and use those relationships to offer customized loans.