Single mindedness: why retail profitability starts with a single view of customers, orders and inventory
Too often, people think of being ‘single minded’ as a negative thing; focused on one goal, at the expense of everything else. But in retail, there is another kind of single mindedness, and it’s a very positive business attribute.
When it comes to how they view their customers, orders and inventory, retailers should be single minded in their approach. These are the moving parts of their business; the variables that determine how many items are sold, and at what profit.
This has always been true, but as the number of retail channels grow, having a single view of both customer activity and stock availability becomes more complex. However, to maximise margins, it is more important than ever that a holistic view is achieved – for a number of reasons.
For instance, demand is never equally balanced across channels, which creates scenarios in which products can be sold out in one location – online, for example – while there are unsold items in the store. Additionally, lack of insight into real-time availability across all channels can result in products being despatched to online customers from a less profitable location.
The art of being single
Ultimately, every retailer’s goal is to sell as much as possible, at the best margin possible. But this is impossible to achieve without first having a single view of business activity, across all channels.
Most organisations already know this – but many have not yet made it a reality. A recent Boston Retail Partners survey revealed that only 18% of retailers currently have real-time cross channel inventory management systems, which means it’s very difficult for most businesses to accurately map supply to demand.
In fact, it is even a challenge for many retailers to understand exactly what that demand is; 35% admit they struggle to achieve a single view of the customer, according to PwC research, while a further 31% admit there is still work to be done in this area of their business.
Single minded thinking: the root of retail profitability
Ask a hundred retailers what their key focus is for the year ahead, and they will probably provide a hundred different answers. But addressing each of these focuses will start with the same thing: ensuring a 360 degree, real-time view of the customer, orders and inventory.
Having this level of information across the business really is the recipe for retail success. It is the solid foundation upon which profitability is built, because it enables key personnel to make decisions based on accurate insight, which in turn will generate better results.
Even if retailers have several focuses – which is the reality of operating in an omni-channel environment – a single view of activity and availability will enable them to become more responsive to the varied challenges they want to tackle across their business. And achieving this single view rests on finding the right multi-channel retail software for their business.