What are Inventory Best Practices for Omni-Channel Retailers?

How to evaluate your business for Omni-Channel Success

The answer to this question has changed over the years but the key to managing inventory, no matter the size of your company or the industry, is to get the right products in the right amounts at the right time. How can you tell if you are doing that – it’s simple, take a look at your inventory:

  1. Are you always trying to get rid of the excess sometimes even having to expand to use additional warehouses?
  2. Do you have to do a lot of store to store transferring?
  3. Are you spending more time collecting the data then you are analyzing it?

If you answered yes to any of these questions you might want to consider evaluating the following areas of your business.

Assortment Planning & Budgeting

  • Total plans should be developed and managed down the category, subcategory and item level. You should use key top-down planning metrics, such as number of products, revenue, units and gross margin, assigning targets at the category and subcategory level for these metrics.
  • Conduct pre-season demand forecast analysis so merchants can analyze them and refine the quality of their forecasts.
  • As the Assortment plan changes, your financials should reflect those changes and update your Open To Buy.

Inventory Requirements

  • Have a comprehensive weekly inventory projection to provide the confidence to optimally schedule purchases to improve both in-stock performance and stock-flow performance.
  • Utilize Exception Reporting to quickly identify the items requiring urgent attention and then complete the required action (PO adjustment, excess management, management by SKU status or Vendor etc.)

Seasonal Planning

  • Allow the business to first develop a seasonal plan then ensure it meets the required adherence to the seasonal Budget.
  • Execute the plan for each store down to the item level.
  • The key benefits of this process are to improve demand forecasts, which are much easier to achieve at the higher seasonal aggregation, and to provide efficiency gains to the staff, which are inherent to managing at the aggregated seasonal level.

Forecast Variance

  • Have a system that advises the Merchandiser immediately when it is recognized that in-season sales are performing differently than anticipated and bought against your pre-season plans.
  • Quickly access current and future period demand forecasts daily to update and assess inventory ownership accordingly.
  • Be able to manage demand adjustments proactively due to know changes in marketing activity (i.e. sales, feature products etc.)
  • Isolate demand anomalies so they do not skew your numbers.


  • Consolidate your purchases to each vendor and, if there are container requirements, optimize for those.
  • Items with too low of demand to be forecasted should still be managed and purchased for automatically.

The needs and best practices will vary business to business as we have seen with our customers but getting these right will be a huge key to success.



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