Did you know that the global market for alcoholic beverages will grow by $1.7 trillion by 2021? Demand for alcohol is growing exponentially, driven by increased incomes and changing cultural practices.
Market growth is driven by several factors:
- Increase in urban populations;
- Revenue growth in emerging markets;
- Young people with high family incomes influenced by social media have easy access to alcoholic beverages;
New products and branding means consumers are more likely to try novel products.
To stay competitive you need not only to analyze demand but also understand existing drinking cultures. People living in a hot climate will have different preferences to those living in colder regions for example.
A retailer needs to ensure they order products accurately and to maximize the use of their shelf space. That is why business owners and senior managers should automate their ordering processes to fully understand liquor store inventory management. This helps them to account for every aspect of the production process.
This is Leafio's Experience in Achieving Automation
The first thing to understand about inventory management is measuring performance indicators. Without high-quality and transparent analytics it is impossible to understand whether or not your business is on the right path.
If liquor store inventory management performance indicators and their dynamics are not being properly analyzed then it is impossible to assess how well they are managed, or if ordering procedures are being properly followed.
Many specialists in the procurement department easily tire of these tasks, which means that labor resources are used inefficiently. Since the assortment of alcohol stores is quite diverse, a manager has to process a large number of orders, usually processed via Excel, that are then sent to the supplier via instant messengers or even the telephone.
Without transparent analytics and order management, important parameters such as supplier reliability and order execution accuracy cannot be traced. This results in poor to problematic liquor store inventory management.
Instead, many managers tend to draw up orders "intuitively." A person guided by his own instinct, which is rarely confirmed by data, and without qualitative analytics, always finds it difficult to understand when mistakes are made. As liquor stores often sell food, which has a limited shelf life, mistakes can incur a significant financial loss.
This means that substantial losses are inevitable due to write-offs. Competent management of snacks needs to be directly proportional to the growth of net sales in general as this category of goods accounts for a fifth of sales at liquor stores.
That is why it is absolutely crucial for liquor store owners to understand proper liquor store inventory management and learn about which tools they need to employ to achieve it. This maxim holds true in most industries today, and not just the liquor business.
There are two main solutions on the market, based on the principles of either push or pull supply. The former holds that products are manufactured and shipped according to anticipated customer demand, the latter that supply chain strategy is driven by actual consumer demand. Leafio proves that the pull system is more efficient in inventory management.
A quality liquor store inventory management tool should include the following features:
- Theory of Constraint methodology;
- High-quality expertise and experience;
- Transparent and comprehensive analytics, extensive product functionality;
- Intuitive user interface.
To make proper use of the above you also must implement the following steps:
1. Centralization of the purchasing department
If you assign responsibility for specific business processes to different employees and take the load off of managers, then productivity increases significantly. Moreover, with the help of inventory management automation programs, you can successfully manage a whole network of stores without employing too many staff. This is especially so if your program includes single order counting and analytics algorithms.
2. Automation of orders
Automation allows you to use resources more efficiently and free up time for strategic and innovative tasks. It optimizes all aspects of retail work as well as allowing you to fully control stockroom processing, unlock new levels of liquor store inventory management optimization.
Order automation also helps to cope with special logistics conditions. With the help of the liquor store inventory control program, you can control the number of orders and automatically generate them to a specified amount, taking into account which product is in most demand.
3. Inventory management by product categories
As mentioned above, it is very important to understand that categories like draft beer and snacks require special attention as they are the basis of most alcohol stores.
When ordering, it is important to consider not only the consumption of these goods but also the heterogeneity of demand. For example, weekends are usually several times busier than weekdays.
You must also take into account the level of write-offs due to expired shelf life, the residual shelf life of the product on its arrival, uneven demand for each day of the week and the desired level of service of the supplier.
Taking all these factors into account is difficult when managing multiple orders. If you just make the same orders for all categories then important factors will not be taken into account, thus impacting accuracy. That is why automated liquor store inventory management is so crucial.
Your stocks are in your hands and an inventory management system is a tool that, if properly used, will enable you to achieve maximum results. It’s a tough market, coronavirus isn’t helping, and putting it simply if you don’t adapt your business and ace liquor store inventory management it could wither and die.