5 signs you need to invest in BI software for your retail business
The retail business becomes ever more competitive, organizations that use some sort of business intelligence software seem to have an advantage over those who don’t. And everybody seems to be crazy about AI. It’s AI this, AI that. But is AI the answer to everything?
The truth is, the bigger the retail organization, the bigger their IT department. When you look at Amazon, you could easily say that their predictive models are the sole reason for Jeff’s billions. But at the same time, if you are small and have no data, then no AI can help you. Smart retail software only works with a large amount of data, so sourcing any algorithm with just a bunch of transactions in a week isn’t going to do much.
So here are five signals. These will tell you that you are set to make a new IT milestone for your retail business.
You find it hard to manage your inventory
At a certain point managing your inventory becomes an impossible task as there are too many items in your warehouse, and you don’t remember anymore what needs to be ordered, what expired, and what needs to be thrown out.
You find yourself just reacting to problems, and you spend your days trying to do last-minute fixes to cope with demand and satisfy customers. You probably went and bought some sort of inventory system just to keep track of all the pieces you have in stock. You thought that looking into a table will solve your inventory management problems, only to find yourself looking into a table of numbers for hours and hours.
Yet worse. Once you fix something and you finally get the flow of your products, the market changes. Everything changes, and you are back to zero again. Suppose any of these signs sound familiar to you. Stop wasting time and get yourself some advanced business intelligence software today.
You sell more than 500 items
Possibly with this amount, you still might find a way to cope, but what about growth? At 500 items, you either find yourself stuck with a glass ceiling by dealing with everything on your own, or you take your business to a new frontier by becoming a data-driven organization with some software at hand.
Remember that what sets retail giants form small players apart is their ability to look and plan. Day to day operations in running a retail business (online or high street) can be so time-consuming and stressful that they can take all your energy for further growth. They are eventually leaving you in the shadows of a zero-sum business.
You struggle to meet demand
One of the early warning signs for your need to invest in business intelligence are stock-outs. That’s the moment when a customer visits your shop or web page in faith to buy goods, only to find out that you ran out of stock.
That’s a horrible moment in the life of a retail business owner. Stock-outs have a double negative effect. Not only do they discourage the customer from returning ever again. They also are a missed opportunity for sales. You can’t sell stuff you don’t have.
If you face stock-outs and you run out of goods too often, then you should treat yourself to some smart retail software, which will help you deal with this.
Avoiding stockouts needs planning; you can’t do a last-minute fix to avoid stock out. This is something you have to see coming days and weeks before it happens, so you still have time to make a purchase order for your supplier. Which is all about sales forecasting, something only computers can do these days. There is now thinking around it.
You have several points of sale
And even if you have as little as two branches. Like an e-shop as well as a high street shop. Even then, you are a likely candidate for a business intelligence software to help you run your retail business in a data-driven way.
Branches always mean double trouble, and with every other branch, the problem grows exponentially. What sells at one point of sale doesn’t sell at the other. What is seasonal here doesn’t need to be seasonal there. Everything needs to be treated individually, and yet all needs to be treated in context.
And more points of sale also mean you cannot be at two places at once to deal with those just in time fast fixes. You have to delegate. You have to give people instructions, and you have to watch them fail again and again.
You are thinking about buying or renting more warehouse space
Ok, so first of all. DON’T! On any given day, chances are your warehouse is 30-40% larger than it needs to be. You find yourself in a trap. You think maybe I have to order more to avoid stock-outs. I have to have everything in stock all the time.
No, you don’t. Not unless you have a clever software that will make your warehouse smaller and advise on what to order and when to order. Suppose you allow predictive modeling to be in charge of your replenishment. You are likely to see substantial reductions in warehouse space and an increase in product availability at the same time.
Sales forecasting and data-driven retail business isn’t for everyone, but it is a necessity if you plan to go big. 10 out of 10 major global operators run on sophisticated modeling and advanced IT solutions. That’s not a coincidence. That’s a pure definition of their business model. So if you find yourself struggling with any of the points mentioned above, do try Inventoro. It’s a simple software for small and medium-sized retail businesses. It will enable you to forecast sales and become a data-focused retail organization without costing millions.