9.6 Back-of-house management and stock processing

Besides handling the storefront, retail in operations includes managing stocks and inventory too. In other words, balancing the act of supply and demand.

 

If a product is selling well, the operations manager can request a higher intake. On the contrary, if a product isn’t doing well, the action is taken immediately to either place it on markdowns or displayed prominently to push sales.

 

There are three key tasks in back-of-house management and stock processing:

  • Space planning and management
  • Organisation of stockroom
  • Stock receiving, replenishment and transfers

Space planning and management

There are ways to maximise both space, sales and even product durability in retail by simply shifting things around.

 

Drive sales

  • Fast-moving stocks can be arranged in the most accessible area so that customers can identify it immediately and buy.
  • For promotional items, they can be placed next to new-in items for higher visibility.
  • For items small in size (like accessories or hair clips), they can be displayed on the way to the counter so that customers can just pick up en route.

 

Product-driven

  • Leather goods are best stored in the least humid areas

 

Organisation of stockroom

A messy stockroom will only slow down efficiency. If it takes longer than 5 minutes for the sales associate to find an item in the stockroom, it means the stockroom needs a re-organisation.

 

There are different ways to organise a stockroom. Here are a few basic tips:

 

  • Maximise space

Instead of laying the stocks on the floor, pile them up so that the stockroom can fit more people. However, do not stock too high (the key is an arm’s length) as safety precautions should be taken into account too.

 

For the sales associates’ safety, place the heaviest items (denim jackets, jeans) on the bottom, and lighter clothing (cardigans) on top.

 

  • Place fast-moving stocks near the front

If an item is already proven to be popular, placing the stock near the door will improve efficiency – especially when it’s during rush hour.

 

  • Ensure there is a right temperature

The right temperature not only keeps clothing products in good condition, but it also ensures the people working long hours won’t suffocate.

 

  • Create a system and label accordingly

Some brands prefer to stock by categories, others by colours, another by materials. Whichever is fine, but ensure that everyone sticks to that system. Of course, with proper labelling and tagging, the items can be found much faster.

 

  • Leave a space for new stocks

This is especially crucial if the delivery company delivers packages during operation hours – which is usually always the case. In the event that no sales associate can unpack and stock by the time of arrival, the extra space will serve as a storage place first before it gets unpacked.

 

This is to avoid cluttering the storefront (which leaves a bad impression to consumers), as well as the stockroom.

 

Stock receiving and transfers

Whoever on the floor – it can be you or a sales associate – can be in charge of stock receiving. Most manufacturers or suppliers directly ship products to the store, so ensure you allocate someone to receive the shipment.

 

Once received, it is vital that they are moved directly to the extra space allocated in the stockroom.

 

There will be cases where stocks have to be transferred out (return to the warehouse or shipped to another store), so to avoid confusion, it’s best to schedule stock receiving and transferring on different days.