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GUEST COMMENT No room at the warehouse: how to keep stock to a minimum when space is limited

Image: Adobe Stock

Rob Shaw is SVP global sales at Fluent Commerce

Demand for warehouse space in the UK is fast outstripping supply, leaving many businesses with less space than they would like to store their stock. Additionally, soaring energy bills, increasing inflation and a tight jobs market are driving up the cost and making expansion an even more unattainable option – even forcing some businesses to consider downsizing their warehouse space.

With that in mind, here are some alternative options for retailers with more stock than they have space for:

1. Utilise your store space

It’s easy to overlook available store space – all too often it’s under utilised. Consider turning this space into mini distribution centres, increasing fulfillment capacity. You can also use pop up distribution centres in stores if you don’t want to set up permanent fulfillment in certain stores. Choose stores that are best equipped to handle orders and in the best location for deliveries. Also train existing staff to pick and pack orders.

2. Introduce Ship from Store, and Click & Collect options

Another way to ensure existing space is maximised is to introduce Ship from Store. Over the last few years, rapidly changing economic circumstances have made it challenging for retailers to forecast demand. Ship from Store enables retailers to make the most of their entire inventory, with the ability to sell more online at higher margins, whilst also reducing risk.

Click and Collect is another service that is worth considering. This can reduce delivery costs, and drive customers into physical stores, with the potential for driving additional sales.

Critically, for either of these options to be successful, the business must have an Order Management Platform (OMS) that can support real-time inventory updates on a large scale, allowing employees to develop an efficient pick and pack process. It must also provide flexibility, offering a choice as to when and which stores to ship from, and ultimately controlling capacity.

3. Create a virtual inventory 

Creating a virtual inventory that lists all available stock – both in store and in the warehouse – provides greater control over sales. Virtual pools of inventory can be created, segmenting stock in multiple different ways, such as by channel, market, region and/or product.

A portion of stock can be isolated for online orders only, with the rest reserved for instore. An alternative is to combine all stock including in-store and make it available to sell online, reducing stockouts. 

As the holiday season approaches and retailers begin to stock up, it’s vital that they have full visibility and control over their inventory, enabling them to re-stock quickly and reduce the need for warehouse space.

4. Boost success rates

A lack of visibility into inventory all too often leads to cancelled orders, with popular items being oversold. This not only impacts the bottom line, it has a negative impact on customer relationships – damaging future sales. It’s therefore more important than ever to have a distributed Order Management System (OMS) that facilitates the tracking of all stock, in real time, across all locations. This creates an all-important buffer, and reduces both over and underselling.

6. Maximise margins

With the continued economic pressures, it’s important to extract maximum value from each and every order. Shipping items from the location with the oldest or most inventory,  the highest in-store markdowns or the lowest sell through rate is vital.

Ultimately, being strategic with fulfillment will help keep margins higher and prevent a surplus of stock building up in any one location. 

Rob Shaw is SVP global sales at Fluent Commerce

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