Building your unified commerce business case?
This article series takes you through the four stages of adopting a unified commerce approach to improve the way you engage customers and help you innovate at pace.
To kick off, we’re looking at the first stage – getting an accurate and single view of your inventory – and one company that’s reaping the benefits.
Getting tight control of your inventory is the first step in your unified commerce journey, and for good reason.
A single, accurate and up-to-date view of inventory is the essential foundation for unified commerce. To provide all the purchasing and fulfilment options you need for sophisticated experiences that delight your customers and minimise your costs, you first need to centralise your inventory and customer data.
Inventory management has always been important in retail. It’s a balancing act to strike the right stock levels and easily adjust those levels as your business changes. Understocks lead to missed sales and dissatisfied customers, and overstocks tie up your capital and result in markdowns that can hurt your margins. In our new on-demand world, where customers expect access to your products wherever and whenever they want, inventory management is critical.
And yet, many retailers I talk to tell me they struggle with some of the fundamentals of inventory control, such as stock taking, demand forecasting, planning and receipting. They recognise that a new approach is necessary, and a unified inventory system is just the way to ensure that you have the right product at the right place at the right time.
However, getting that single view of your inventory has its challenges. That’s because this stage is as much about people and processes as it is about technology. People can be reluctant to learn new skills or change their day-to-day habits, making optimising inventory a potentially daunting experience that has a risk of failure.
Night ‘n Day focuses on its people to unify its inventory
One company that has succeeded in helping its people through the transition to better inventory management and its associated behavioural changes is convenience grocery retailer Night ‘n Day.
Founded in 1990, Night ‘n Day is a diverse business with 57 stores nationwide spanning company-owned stores, franchises and Gull fuel stations. Twice a finalist in the Deloitte Fast 50 rankings of fastest growing companies in NZ, Night ‘n Day is rightly proud of its history of innovation and growth.
Night ‘n Day’s National Operations Manager, Karina Hellyer, says the company is always looking at new ideas to respond to consumer demand for greater convenience.
“We’re investing in technology to streamline operations and improve customer experience,” says Karina. “And we decided that inventory management was the obvious place to start.”
“We thought we were doing it pretty well,” she adds. “But we wanted to reduce the time spent on labour-intensive tasks and free up our people to focus on other activities, like serving customers.”
They decided it was time to start using more of the functionality within their existing Infinity retail management system and improve their compliance with business processes.
“We were an existing customer of Triquestra and Infinity,” explains Karina. “We knew they had direct experience of unified inventory systems and were very confident they could provide all the direction and support we needed.”
Following consultation to decide how to revamp Night ‘n Day’s business processes, configuration of Infinity, training for support centre staff and an ongoing communications programme, the roll-out started with a pilot amongst 3 stores.
“It takes time and effort for people to move from their familiar processes to a fully automated system,” says Karina. “So it was important that everyone understood the end game and what they were going to get out of it.”
Simplified inventory process cuts costs, boosts margins and frees up time
“A quarter of our stores have already made the move to Infinity,” explains Karina.
She adds that one of the biggest benefits has been the improved visibility and management of stock within each store.
“Many of our store operators have 20 years in the business and really know their markets. So they’re pretty adept at anticipating future demand and planning their inventory.
“However, Infinity takes away the hard work of calculating stock on hand and creating estimates for future sales.”
The stores now know exactly how much of each item is in stock up-to-the-minute and can easily adjust orders based on historical sales, forecasts, trends and seasonal variations.
“With better stock on hand levels, the stores are freeing up cash that would be otherwise tied up in overstocks. This has achieved cost savings for each store of a whopping $25,000 a year.”
Infinity enables stock takes, price checks, stock ordering, stock receipting and returns to supplier using any number of mobile devices, significantly reducing time and increasing stock accuracy. And by enabling stores to use a single device for a wide range of inventory activities, they are reducing their mobile hardware and data costs.
Together with the time saved on stock takes, cash balancing, receipting and reordering, each store is saving an additional $8,000 a year.
And by tracking inventory in near real time and updating the system as items are sold or moved to other locations, shrinkage is naturally diminishing, with stores saving an average of $4,000 each year.
It’s all added up to an increased net profit of around $12,000 a year for each store, and that’s just the start.
“We’re only at the beginning of our journey,” explains Karina, “but are already experiencing substantial organisational and financial benefits.
“With less admin, more efficiencies and better inventory visibility, we can focus on serving our customers and growing the business.”
If managing multiple channels is a challenge, keep an eye out for the article on the second stage of implementing a unified commerce platform – extending your brand experience across all channels. We’ll look at how a centralised hub for all your customer and inventory data ensures all your channels and touchpoints stay in sync.
If you’d like help to bring together your inventory and customer data, get in touch. We’d love to chat about Infinity and how it can help you achieve greater agility, faster growth and better margins.