Two weeks ago we discussed the 5 steps retailers need to take in order to win against Amazon. One of those steps was keeping accurate inventory online. But how does one go about completing such a feat? That’s exactly what we will discuss today.
Step 1: Integrate Your Website with your POS
This step seems simple enough, but a majority of the Pet Stores I have interviewed either have a website that’s not integrated to their POS or don’t have a website at all. If you are one of these pet stores, I implore you to reconsider. According to a recent study over 35% of millennials are dog, cat, and bird owners, that’s 2% more than any other generation. Meanwhile, Forbes has touted that over two thirds of millennial shoppers admit their shopping starts online. Finally, according to our last post, 71% of Amazon shoppers admit they initially would have bought in store if the retailer had it in stock. Even if you don’t want to sell online, you can make sure your inventory is available to view online. If you are not sure if your POS integrates with your website call your POS provider. The numbers are hard to argue with.
Step 2: Complete Quarterly Physical Counts
According to Wikipedia a physical count is a process where a business physically counts its entire inventory. No matter how good your security system, employee-bouncers, or POS are; shrinkage is still possible. Because of this, you’ll want to conduct regular audits of your inventory and adjust the counts in your POS. This way your quantity available is correct. If you don’t have the staff or the time to do these, you can also do cycle counts. Cycle counts are less reliable with some POS systems but can be done faster and more often with less intrusion. If you don’t know how to conduct either one of these you should call your POS provider.
Step 3: Create Good Labeling Practices
I once had a customer that sold wooden snakes. You remember the old toy that wound back and forth? There wasn’t too much to it, but I don’t know many kids that didn’t have or want one from the zoo gift shop. This customer had a plethora of volunteer workers and they all called this toy a different thing. Whenever new ones would arrive, they would look up “wooden snake”, “toy snake” or “snake”, and when it wasn’t there they would “help out” by creating a new item. Besides all of the obvious ways this was wrong, it always led to them being out of antique wooden snakes. This was, in fact, incorrect. They had hundreds of them but they were all under different item codes, all over their warehouse. Some may disagree with me, but I find that allowing your POS to come up with the item name is the best way. I have issues remembering my dog’s birthday (partly because my wife made it up) much less 100,000 items and their associated item numbers. No matter how you chose to do it just stick to it. Teach your staff about it and never vary from it for as long as you use the same POS.
Step 4: Use the Alternate Weights in Your POS
Most POS Systems today can utilize alternate weights and measures. What I mean by this is some items you may buy by the case and sell by the each. Some things you may buy by the pound but sell by the ounce. Make sure to tell your POS what those measurements are before you start selling those items. This way when you are running your inventory reports it can recommend you buy the correct amounts of “dog treats”. So instead of buying 8 oz of them, which won’t get you through the day, you buy 8 lbs.
Step 5: Define and Follow your Returned Items/Damaged Goods Policies
I have been told in the past that I have the grace of a baby giraffe. I have to baby proof my house because if I don’t, I will most likely hurt myself. In fact, I am writing this article with a torn ACL that I got just getting out Uber in my front yard. So, I most definitely know that not all of your shrinkage is going to come from theft. You also need to consider broken items, broken bags, and damages when talking about shrinkage. But it’s what you do with the broken items, bags, etc. that matters. Let’s look at a real example: If a customer returns a bag of dog food, you have several options.
- If it’s unopened your POS can just return it to sellable inventory.
- If the bag is opened/damaged you should have your system or clerk process the return but mark it as return to vendor, as most vendors will allow you to return this.
No matter what happened though, the system needs to track it, adjust your sales and taxes, and maybe even track the return in the customers file. Make sure your employees know exactly what to do, and do it every time.
I know that by doing just these 5 things, you will have a much more accurate online inventory, thus increasing your ability to compete with companies like Amazon or Chewy. Just remind yourself every day when you walk into your store and turn on your lights, “Do not go gentle into that good night…Rage, rage, at the dying of the light.” AND Remember 51% of millennials like the social aspect of shopping, meaning being in your store and learning about your inventory from your staff!
About the writer:
Mark Nelms is a Business Development Manager for Pet Rewards POS. He has conducted over 400 interviews with retailers from almost every vertical and size. In prior roles he’s assisted clients like Cumberland Packaging Corporation (Sweet N’ Low), The New England Patriots, and NCR (National Cash Register.)
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