To adapt to the changes in today’s retail landscape, it is important to back your business decisions with data. Knowing the right inventory performance metrics to evaluate and what they mean will allow you to make educated business decisions to improve your store’s inventory performance.
Make sure you’re evaluating these 3 important inventory performance metrics:
Without the data, it is difficult to accurately know your success. The more insight you have, the better equipped you are to make informed decisions so that you can be a profitable retailer.
[vc_row][vc_column width=”1/1″][minti_testimonial author=”Joey Pointer” company=”CEO, Fleet Feet”]”We rolled out an ecommerce platform and we wouldn’t have been able to do it without RICS.”[/minti_testimonial][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]At RICS, we support retailers integrating with new solutions to help grow their business. We’ve integrated with trustworthy partners offering e-commerce solutions, payment gateways, gift and loyalty solutions, EDI, Open-to-Buy Consulting, and more. These reliable and trustworthy partners connect to RICS so you can keep up with the trends of retail technology. Click here to see learn more about the current integrations with RICS software.
- Look at your Sell-Through – This is the percentage of sales to the inventory investment available for sale. The formula measures how much or what percentage of your total available inventory was sold during a given period. For instance, if you had two items for which you had received 10 pieces of both and had sold 6 pieces of both, the sell-through percent on both items would the same at 60%. But if one of these items had been in your store for 12 months and the other item in the store for 1 month, the second item is much more profitable for your business than the first, even though the sell-through is the same.
- Evaluate the Return On Investment (ROI) of Your Inventory – For every dollar you invest in a product, how many are you getting in return. ROI analyzes inventory levels, sales, and profitability by comparing the investment in inventory required to generate those gross margin dollars. A high ROI indicates that you have the right amount of inventory, at the right time, for the right price. A low ROI may indicate that you are missing out on sales opportunities and leaving money on the table in the form of old inventory or excess markdowns.
- Understand the Gross Profit Margin (GP) of classes/SKUs/vendors – GP measures the percentage of your total sales dollars that are profit dollars. The GP percentage is relative to the cost of the item as well as the selling price. A higher GP percentage indicates that you are selling your product as close to the original retail price as possible. A lower GP percentage may indicate excessive markdowns for products driving down profitability.
USING THE RICS API
We’re excited and ready to help you integrate with RICS to meet your technology needs. Due to our current development initiatives, we won’t do the custom programming of the integration. Using your development team or a partner, RICS’ API can be accessed to create custom integrations. Our services team will work with your developers throughout enablement.
WE WANT YOUR INTEGRATION SUGGESTIONS
RICS is already integrated with tools and services to help your business perform at its best. However, there are always opportunities for new integration ideas! We’re open to exploring integration suggestions with your help. Implementation often doesn’t require custom development, but it does require a validation process to ensure the 3rd party adds value and is feasible using the RICS API.
Our integration enablement process follows four steps:
Don’t hesitate to reach out to an Account Manager at any time to discuss initiatives like these. You can contact us at firstname.lastname@example.org to start the conversation.
- Client suggests an integration
- RICS enabled API access if the integration is purposeful and feasible
- RICS provides acceptable API usage guidance to client and integrated third-party
- RICS monitors to ensure API guidelines are met
The retail landscape is changing – don’t get left behind.
To be a successful retailer, you must commit to understanding your inventory. According to RMSA’s Senior VP of Client Services, Paul Erickson, savvy retailers have “a thorough understanding of how to actively manage inventory”. So, How can you use data to better manage inventory and turn more profits?
Reserve your seat for RICS & RMSA’s Webinar Series for Retailers focused on strategies you can use to manage your inventory and grow your business.
“Retailers need to understand the strategies discussed in this webinar series because the very best independent retailers have an ongoing commitment to learning and growth. They recognize that there is always room for developing new skills and refining others.” – Paul Erickson, RMSA Senior VP of Client Services
What takeaways can you expect from this series?
– A Strategic Plan for your inventory investment to increase cash flow, profits and sales
– A breakdown of key metrics like inventory turnover, GMROI, Open-To-Buy planning
– Actionable steps to take these concepts from abstract to a working merchandising strategy
Webinar #1: Open-To-Buy: Where Better Inventory Management Begins
If you’re ineffectively managing inventory, you could see excess inventory which means decreased margins and potentially negative cash flow. Join Senior Vice President of Client Services at RMSA and retail expert, Paul Erickson, on July 25th at 2 pm EST for a discussion about open-to-buy, a financial strategy that helps retailers focus on accurate forecasting and selling strategies to help increase profits.
Webinar #2: Making Your Inventory Work for You
As a business owner, you’re constantly checking your bottom line. On August 24th at 2 pm EST join Senior Vice President of Client Services at RMSA and retail expert, Paul Erickson, to learn the specific techniques recommended to control your inventory, increase your margins, improve your cash flow and increase your bottom line.
Webinar #3: Increase Cash Flow Now
To make agile, real-time business decisions making you more money, you must examine your data on a regular basis and adapt to what it’s telling you. On September 21st at 2 pm EST join Senior Vice President of Client Services at RMSA and retail expert, Paul Erickson, as he goes through the step by step to improve your cash flow and increase top line sales.
Want to learn more about the webinars or sign up for the series? Visit our website here.