Promotions are Huge, That Doesn’t Mean Inventory Should Be
You’re very familiar with the importance of promotions, how they can make or break sales figures for the quarter or even the year. But an extremely successful promotion brings to light a challenge: Inventory Replenishment. While we often think of general retail for sales events to model, it is the grocery industry and their weekly promotions that highlight the pain in the promotion link of a supply chain. Let’s take a look at the root of the problem, and how the challenge can be overcome with ingenuity and technology to give you an edge over your competition.
Promotions Only Work if you can Make the Sale
When you’re doing a promotion in your retail store, it’s not always about clearing out overstock. Sometimes getting a product that has modest sales to become a big money maker takes putting it on promotion to curve demand, guiding consumers to your store for the product. When that’s the case, being able to get restock to prolong the profit-making potential is paramount. If you don’t have the product in stock, you can’t make profit from the sale, and that’s a problem worth beating.
The challenge with promotion inventory replenishment isn’t a new one, therefore, the market is flooded with various individual’s ‘wisdom’ of how to solve it. The problem is, if you were to ask a group of people from different retail environments how to tackle the problem, it’s quite likely that all of them will give different answers. Google the term, and you’ll get thousands of suggestions, from simple methods like ‘order three times as much as you normally would, it works!’, to ‘eh, just let rain checks take care of it’. The problem with these scenarios is that they almost always fall apart.
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