A question of sport: Building agility into inventory management for sports retailers
Sports retailers such as Sports Direct, Sports World, Nike and JD Sports have to deal with a vast amount of seasonal merchandise. Often there’s a short window of time for selling – the cricket season or a major athletics championships for example - so avoiding overstocks as well as stock outs is vital for their bottom line.
In sportswear stores there’s often sudden demand for a hot selling jersey or trainer associated with a winning team or popular player. And it’s particularly so for a major league sports franchise like the NFL’s Baltimore Ravens. Bestsellers can emerge almost instantaneously when a new star launches, and the 16 Ravens stores inside M&T Bank Stadium must ensure they maintain enough stock to continually meet demand during the half-time shopping rush.
How did the stores adapt to cope? Ravens’ retail operation has optimised inventory, so that the right inventory is in stock and orders can be replenished accurately. As a result, these stores now enjoy improved insight, reduced out-of-stock items, increased sell-through percentages, and increased productivity.
Here’s how sports retailers can optimise inventory to enhance business performance:
1 Replenish in line with individual store needs Replenishment is a function that appears simple to consumers but can be complex for retailers to execute — particularly as new channels emerge. That’s why it’s essential for sports retailers to employ a flexible inventory management solution that takes individual item, seasonal and store-level, local nuances into account. With the right software it’s possible to finely tune replenishment orders that optimise product availability, as well as balance demand and risk.
Factor in entire network stock demand A well-designed replenishment tool calculates the optimum quantities to purchase for and replenish each store, taking the requirements of the entire network into account — not just the needs of the individual location. It enables retailers to use multiple allocation methods to suit different products and conditions, or even combine multiple rules, such as: replenishment on sales and promotions (1 for 1, 2 for 1, etc.); lifecycle curve (the anticipated change in demand); and replenishment by top-selling items, meaning each store is topped up with the known best-selling products.
Automate for efficiency and flow
Efficiency is everything in retail today, to ensure profit margins are protected. The right replenishment tool will automate many of the tasks associated with restocking, such as generating purchase orders with pre-allotment by store, or transfers from warehouses to stores to rebalance inventory. As soon as inventory becomes visible across the enterprise, stores are able to see and validate replenishment proposals, to incorporate local knowledge into an optimal replenishment plan. Optimising replenishment ensures inventory availability for unified commerce and in turn, leads to increased sales, more accurate forecasting and monitoring of product performance, increased customer loyalty and more successful promotions.
Benefit from distributed order management Savvy sports retailers will today be looking at ways to optimise inventory locations and strategise around the combinations of fulfilment that modern shoppers increasingly demand. With distributed order management (DOM) software in place sales and profitability can be improved because stock is available to customers across all locations
DOM systems are designed to intelligently arrange orders across the multiple systems and processes used by the parties involved in replenishing an order. This kind of software is essential at a time when we’re starting to see industrialised roll-outs in omnichannel, where the store becomes a logistics centre, mobile technology is adopted in store for use by store associates, and customers begin to enjoy the benefits of ship from store, and endless aisle services from the brands they love.
Score points with your loyal customers The leading sports retailers use their inventory management software to restock and promote items that sell well and not those that flop. Ultimately a solid replenishment process reduces the number of times sports fans seek out a branded shirt or team kit, only to find it’s not available through any viable fulfilment channel. Just as speed, dexterity, agility and flexibility are vital attributes of the best sportspeople, so too must retail supply chains get fit and fine-tuned, to meet today’s ever-more demanding customer expectations.