Product and inventory management can consume a huge amount of time and can be the biggest drain on cash. Selecting the right product, achieving the right levels of stock and doing this, along with all the other demands, is hard. Get it right and you can make good margin. Get it wrong and you lose sales, waste capital and, potentially, put your business in peril.
With all the risks, you’d think most retailers would make product management one of their main priorities. However, it can often be seen as afterthought.
Understanding why we need good product data is key to the future success of every retail business. Here are some of the questions I hear the most:
Q: Where am I going wrong?
For those preferring to deal with customers, instead of spread sheets and barcodes, the thought of programming products in to a system is a nightmare. As a result, retailers try to make short cuts to simplify the process. Grouping similar products together reduces the number of items listed, whilst still allowing a product to be sold. However, a lazy approach to product data will rob your business of the opportunity for long-term success.
Q: How can I find the time to manage my stock during a busy Season?
Retailers often argue they don’t have time to manage their stock properly. “If I spend an hour managing my products, it’s an hour I haven’t spent looking after customers”. While I wouldn’t argue that looking after customers is a priority, the reality is that the two need to go hand in hand.
Product management can be done in your ‘down time’ and it shouldn’t be seen to be an “either-or” option.
Q: Time spent managing stock costs money. Right?
Wrong. The real cost is not in managing stock. The average UK pro shop has £16,000 worth of dead stock (over a year old). This is product that was poorly purchased possibly as it was the wrong size, colour, model or quantity. If more effort were put in to analysis and product management up front, this cost could be severely reduced.
Add to this the margin you will lose when trying to get rid of your old stock (clearance sales) and you’ll see it’s better to have got it right in the first place.
Q: How does this help my retail buying group to help me?
Many golf retailers rely on their retail group to negotiate with brands on their behalf. In order to do this effectively, buying groups need detailed sales and margin information. The better the outcome of negotiations between buying groups and brands, the better the costs will be for the retailer. How can they negotiate deals, or choose the best performing brands, if they don’t have the tools to help them?
Over recent years, better product data has helped the golf industry tremendously: providing a better commercial environment for all. An improved understanding of the market has helped groups identify what is moving through to the consumer, leading to better buying. This has resulted in more exciting products, new ways of selling and more realistic sales targets. As a result, retailers are making more margin and ultimately customers are happier.
Better data in the golf industry has also changed pricing. We have moved from a situation where brands were discounting 2 months after launch, to one where most brands now stick within 10% of launch pricing until the month before the release of the next generation of product. This hasn’t happened by chance. This is the result of better data for all.
Q: Why product management is important for online and click & collect selling?
Any retailers with aspirations to sell online, or through an app, have to manage their products supremely well. Without full product management, you can’t offer any form of distanced selling. Your database will need to hold full size, colour and attribute information to enable customers to select products they’re looking for.
Customers don’t want to buy “a shirt”. They want the white one, in size Large. They don’t want “some shoes”. They want the black Spikeless in 8.5.
Q: How does XCODES save me time?
Most retailers will spend hours each week entering product details into the sales system, to ensure all their inventory is properly identified. Over a month, that could amount to 15 or 20 hours. Those with larger ranges, or online stores, could spend many times this.
The team at XPOS recognised this issue some years ago and developed XCODES to try and ease the burden. XCODES is a ‘live’ directory, built into XPOS, (currently) 1,200,000 products from over 200 leading brands.
The powerful benefit of XCODES is that it gives the retailer product descriptions, variant details, barcodes, prices, images and web information, straight from the brands, for the majority of stock items held in golf shops. With ‘scan and go’ technology, a new product range can be identified and loaded in to the system with just a few clicks. This offers all the benefits of correct product data, without the hard work and endless typing.
Q: How does XCODES save me money?
XCODES helps retailers reduce costs by lowering the overhead of managing product data from multiple suppliers. Our average customer has over 12,000 product variants in the system. Imagine how much time it would take to type in all those product ID’s.
Q: Should all golf retailers use XCODES?
A significant advantage to XCODES is the standardised format of the information. Not only is the data better, but XCODES ensures the data is the same for everyone. As the data comes from the brands, it means that everyone is talking the same language.
This removes the disconnect when people use different data to talk about the same thing.
The future opportunities to streamline information, process and extract more value for all partners – retailer, retail group and brand - is significant. Retailers can make, and receive, orders at the click of a button. Eventually, they won’t need to enter the data, as they will get it directly from the brand.
When everyone in the supply chain talks the same language, we all benefit.
Phil Barnard is Chairman of XPOS and European Partner of Golf Datatech. To find out more about XCODES click the CHAT button on our website www.crossovertec.co.uk or email firstname.lastname@example.org