The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency. – Bill Gates
I know it’s all about digital (virtual communication platforms and mediums to communicate with customers) to enhance the customer experience. Although is it really?
If we consider that many retailers hold up to 25% of wasted money on the shelf then how does digital technology actually assist in improving working capital cash flow?
How can digital technology help us, and how about in particular with inventory management?
According to Springwise, about half of the world’s food is going to waste and in France there is now a law which prevents supermarkets from throwing food away.
We recently came across a great example of how an app in America is being trialled to improve inventory management in supermarkets plus assist in reducing food waste.
The app named BuyMeBy enables supermarkets and grocery stores to offer expiring products at reduced prices to online shoppers as well as those in-store.
The startup will track expiration dates using inventory-management software, and gradually lower the prices of perishable products. BuyMeBy is currently working with a natural foods store in Greenwich Village to perfect the logistics of the operation before it begins a pilot program in New York.
Where to from here? Fashion-related apps that assist in clearing out end of season ranges?
In theory clearance apps should increase customer loyalty with them being attracted to the bargains. In the meantime the technology should also help reduce stock wastage and storage.
The golden rule of inventory is to turn it over (like any good asset) keep it moving in as much volume and with as much profitability as you can.
Utilising digital technology to track, segment and customise is another way to maximise the customer experience whilst drilling into greater profitability.
The mobile app enables in-store merchandising teams from retailers and product suppliers to access real-time inventory data without having to rely on store-generated reports or dated spreadsheets delivered by headquarters.
So here we see digital technology improving back-of-house technology, processes and systems whilst hopefully ensuring that the in-stock position is the critical retail KPI.
After all, there is more than one way to enhance the customer experience.
Happy fit retailing
Brian Walker is founder and CEO of retail consulting company, Retail Doctor Group. He specialises in the development and implementation of retail and franchise strategies.
First published on Smart Company, 12 August 2015.