Inventory stock levels are critical to the success of retail companies. Maintaining the right stock balance between supply and demand is critical to satisfying customers, maximizing sales and minimizing operating costs.
Insufficient stock can lead to stock outs and customer dissatisfaction, while overstocking can lead to additional costs and storage problems.
We start from point-of-sale management, also known as POS, as the indispensable commercial factor from which to start when looking for stock balance.
But to know if we are doing things right, it is necessary to have performance indicators (KPI’s) that give us a diagnosis of how we are doing things, and serve us to identify areas for improvement related to inventory.
Some of the main KPIs:
You already know why you should optimize your point of sale management and how to measure it, now we tell you the benefits you will receive in the medium and long term once you start implementing your strategy:
And what can happen when there is an imbalance in your point of sale due to overstock? The following:
At the other extreme, when, due to poor stock management at the point of sale, there is a lack of the product that customers demand, the opposite effect occurs, although with equally disastrous consequences: stock outs.
Here are the main problems caused by stock-outs in your stores:
Loss of sales: when a product is not available in inventory, sales opportunities are lost, which directly affects the company’s revenue.
Decreased customer satisfaction: the unavailability of a product can generate dissatisfaction among customers, which can affect their perception of the brand and their loyalty.
Damage to brand image and perception: stock-outs can generate a bad image of the company, as customers may perceive the brand as unreliable or unable to meet their needs.
Customer migration to competitors: when a product is unavailable, customers may choose to look for alternatives from competitors, which can result in loss of market share.
Problems in the supply chain: stock-outs can be a symptom of problems in the supply chain, such as poor planning, lack of communication between areas of the company or errors in estimating demand.
Now you know everything you need to know about stock balance in retail outlets. Remember, the key is good prior planning of the demand in your stores, because with anticipation and organization, efficiency is guaranteed.
And if not, you can always turn to Artificial Intelligence to help you, which we know a little about. Want to know more? Find here all our AI solutions for Retail.