As the coronavirus outbreak has spread across the globe, business owners have stepped up their efforts to provide consumers with the essential goods and to protect the health and well being of the workers.
Retails are taking extraordinary measures to keep their inventory moving and deliver goods efficiently to their customers. The most useful thing is the proper use of the inventory management system. Let’s see what the challenges that lie ahead are and how they can be easily tackled.
Inventory Management Challenges faced by Businesses due to COVID-19
Understocked Inventory
Overseas suppliers may cancel orders they are not able to fulfill, and the reason could be slow production and low supply in raw materials. On the other hand, delays in the logistics and shipping of your products may impact your customers. The most affected by this situation are private labels and smaller brands. Even if they are experiencing a shortage, they can’t easily switch suppliers as they have established a relationship with the suppliers.
Overstocked Inventory
Due to the current conditions, the demand has dropped, and brands are finding themselves stuck with mountains of stock and no chance to clear them. So in the existing scenario, brands are actively reducing future orders. A recent report from a sourcing general suggested that $100 million worth of orders have been canceled, which supply chains from Bangladesh. Brands in luxury and fashion have either withdrawn or postpone orders to curb their losses.
In these market conditions, it is crucial to develop a tactical response strategy that will help you manage inventory products effectively.
Key Solutions
The business owners must come up with creative solutions quickly as more countries are imposing lockdowns more customers are turning towards ordering things online
Optimize resource allocation
The sellers first need to optimize their resource allocation to clear their inventory by asking themselves what kind of stock works better for customers in particular regions. Careful assessment of different channels is possible and is a necessity in the current situation.
Using an inventory management software can help you tailor to customers’ particular needs down to the subcategory level to obtain maximum results.
Maintain Newness
It appears that the pandemic may impact the consumer appetite for new products, but it undoubtedly hasn’t happened. Given the current climate, it is beneficial to strategically plan the launch of new products online with insight on competitors.
By keeping an eye on competitors’ launch frequency of new products, retailers can better adjust their product launch schedule to reach maximum off the audience.
Using good inventory software, you can strategize which kind of audience you want to reach or target that would like a variety of styles offered by your Store.
Gauge current demand
You need an accurate view of the current market to make the next decision. Using data from your inventory management system analytics, you can perform on market-level analysis to spot opportunities across different segments and distribution channels.
For example, if you are currently selling formal shirts and trousers in your store and this seems a risky investment for a while then you can switch to t-shirts and shorts or other similar clothing as people are spending more and more time cocooned in their homes.
In short, go ahead and reshuffle your stock to whichever item is currently in more demand among the consumers so that you can increase your profit margins.
Strengthen Relationships With Your Suppliers
Now is the right time to improve and build better human relationships with your suppliers. It can go a long way and help you understand the possible difficulties that are affecting them and the effects it can have on your business. It will also help you find other similar types of suppliers or substitute goods that are crucial for you.
Therefore, if your particular supplier faces any difficulties, you can contact the other suppliers and keep your inventory in stock for the time being. Good relations also come in handy when you are negotiating supply contracts with your suppliers.
Reduce inventory
In case the demand for certain products is declining, simplifying your goods can be an effective way to manage inventory and cut your storage costs. During a time like this, you should use your inventory management system to monitor sales closely and find the products that move your business the most to make you more profit.
This way, you can realign your business with new core products that are in demand and can be delivered quickly to your customers.
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Conclusion
The coronavirus pandemic situation is one of the worst humanitarian crises. Retailers are making all efforts to protect their employee’s lives and livelihoods. With creative and efficient inventory management, retail supply chain leaders, e-commerce vendors, and other search business owners can make sure that customers can buy goods while maintaining safety standards for both your customers and your workers.
