The Coronavirus has had an impact on the way we all go about our daily lives. Whether it’s wearing a facemask on the food shop or staying closer to home during the summer holidays, we’re all doing things a little differently than we did at the start of the year.
Although more and more of us have been spending our hard-earned money online in recent years, the pandemic has also led to a surge in ecommerce activity. No surprise there; the combination of 9.6 million Brits furloughed with a national lockdown lasting several months has led to more time in front of computer, tablet and phone screens and less on high streets up and down the country.
In February 2020, before the Covid-19 lockdown, internet sales accounted for 19% of all retail activity in the UK. By May, that percentage had jumped to 33.3 %, an all-time record, settling at 31.8% in June. (ONS)
What does this mean for retailers? No matter if you’re expanding online sales or simply exploring them for the first time, there is plenty to think about when it comes to managing and making the most of your stock. Here are just a few areas business owners need to consider when managing stock, both online and in-store.
How will you divide your stock?
From April to June 2020, more than 85,000 businesses launched online stores or joined existing online marketplaces. If you are one of these businesses or due to be adding yourselves to that statistic over the coming months, you need to ensure two things:
1. You understand what it is people want to buy online (what’s hot online is often different to in-store).
2. You ensure that you always have those items available for clicking customers to buy online.
In order to do that you’ll need to consider how you can make sure that stock is readily available for your new online customers:
1. Are your online sales going to integrate with your current stock levels?
2. Are you able to integrate your website into your current stock management system?
3. If the top two are not possible, are you going to carry stock specifically for your website?
How you manage stock and ensuring stock availability is critical to success online, just as it is in-store, so having the answers to these questions before you plough resources into website development or new stock is essential.
Dealing with higher rates of return
While online sales enable new revenue streams to be opened, they also bring a new set of challenges for retailers when managing stock. One of these is the higher rate of return on items sold. Around 22% of goods bought online are returned, with a huge percentage of this attributed to fashion. Almost half of what consumers spend on clothes and shoes online ends up being refunded. In brick and mortar shops, the figure is thought to be around 8%.
The upshot of this is that you’ll need to have an effective returns procedure when it comes to stock management; this should include identifying which lines have higher return rates and highlighting any items that are unable to be resold or are potentially damaged in order to minimise stock loss, over-order or unavailability to customers.
Stock loss through new processes and a changing workforce
We can all make mistakes, so it’s no surprise that one of the most common causes of stock loss for retailers is human error. When you consider the current marketplace conditions in retail, where you have businesses potentially reducing staffing levels, staff under stress entering into online retail and new ways of remote working, there is potentially something of a perfect storm for mistakes to be made.
It’s important that investment in processes and training are made in order to minimise the errors being made, particularly as a small error in stock management can quickly escalate into a larger problem if left unnoticed.
Where does external stocktaking fit in with online sales?
Due to the nature of online sales, it’s vital that your products are available, no matter what time of the day or day of the week it is. If they’re not, then you’ll be missing out.
A large part of effective retail stocktaking is ensuring that this is no longer a wishful thought but a reality for those selling online. It can also help to ensure that stock loss through human error or systems issues is kept to a minimum; at a time when businesses don’t want their working capital tied up in excess stock, there couldn’t be a better time to team with a trusted external stock taker.
Abacus Valuers has worked with retailers for more than 30 years. If you could use some help through some of the biggest changes the retail sector has ever seen, give our team a call on 01637 874609.