The new mantra for increasing sales and improving return on investments is to study consumer behaviour and act accordingly. The need of the hour is to make a few fundamental changes to the classical retail model, so both the customer and the company are benefitted. Today, the dynamics have changed, and supply-chain is no longer the central entity around which the buying cycle revolves; it depends more on the buying impulse of the customer. So the trick is to understand when customers make purchases, and to support such buying decisions by ensuring that products are in stock whenever required. There is no use holding inventory for slow moving products that people buy occasionally. On the other hand, however, not having sufficient stock to meet the demand for fast moving products would lead to opportunity lost.
Articles with high turnover are those that customers prefer to choose and purchase immediately. Thus, such products should always be available for customers to see, and since they wouldn’t want to wait for the chosen product, they should always be in stock. Such articles, thus, are ideal for selling through outlets where there is no time lag between the buying decision and item delivery. Similarly, items with low turnover need not always be stocked. These are products customers do not mind waiting for a day or two to receive. Thus, the best way to sell such articles is through online portals, so you can deliver within the specified SLA even without using inventory space for stocking.
Working on this rationale, if only fast selling products are displayed and stocked, stores would need much less space to be set up. This would also lead to more attractive and well-managed stores. Moreover, smaller shops would mean less capital investment. Reduced space and capital requirements for each store would allow businesses to open more stores in multiple locations, thereby increasing their market penetration. Opening stores in multiple areas would also help companies study the buying pattern and preference of consumers in that particular location, helping them serve customers better.
But they would still need to serve those looking to buy slow moving products. Companies can cater to such needs through online shopping portals. Once the order is placed, they can either deliver the product to the address specified by the customer or give him an option of collecting it from the shop at a convenient time.
A logical approach to selling, thus, can not only help companies increase their customer base by targeting various segments of the market simultaneously, but also ensure that customers are satisfied and make repeat purchases.
Anup Das (mailto: [email protected]) manages ERP and CRM projects at Happiest Minds. Anup’s primary areas of expertise include Predictive analytics and IT service delivery; with deep exposure across Finance, Retail and energy Industries. Anup holds a Master in electronics degree from University of Jabalpur.
