As a retailer, one of the biggest challenges you face is ensuring that you have the right products in stock at the right time. This can be a complicated and time-consuming process, but one solution that has proven effective is vendor-managed inventory (VMI). VMI is a supply chain management technique that allows suppliers to monitor and manage inventory levels for their products in your store. But how does this impact your sales? Let's take a look at the data.
According to a study by the University of Arkansas, retailers using VMI can see an increase in sales of up to 7%. This is because VMI allows for better inventory management and ensures that popular items are always in stock, which leads to increased sales.
Another study by Supply Chain Quarterly found that VMI can reduce out-of-stock situations by up to 70%. This is because suppliers are able to monitor inventory levels and restock products before they run out, ensuring that customers always have access to the items they want to purchase.
VMI can also help to reduce costs for retailers. In a study by the National Retail Federation, 64% of retailers reported a decrease in inventory carrying costs after implementing VMI. This is because VMI allows for better inventory control and reduces the need for safety stock, resulting in lower inventory costs.
In addition to increased sales and reduced costs, VMI can also improve the overall customer experience. When popular items are consistently in stock, customers are more likely to have a positive shopping experience and return to the store in the future. This can lead to increased customer loyalty and more repeat business.
So, how can you implement VMI effectively? Here are a few tips:
Choose suppliers who are willing to work with you on VMI and have experience with the technique.
Establish clear communication channels with your suppliers to ensure that inventory levels are monitored and restocked regularly.
Use data analytics to track sales and inventory levels, and adjust inventory levels accordingly.
Consider using VMI for high-volume items or items with unpredictable demand.
Data shows that using vendor-managed inventory can have a significant impact on a retailer's sales, costs, and customer experience. By working with suppliers to manage inventory levels and ensure that popular items are always in stock, retailers can create a positive shopping experience for their customers and increase their bottom line.