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Get ready to explore the world of apparel inventory management as this guide presents you with key strategies, potential challenges, and the importance of having a robust system in place. Learn how to navigate through the unique needs of fashion inventory, the impact of effective management on customer satisfaction, and how technology can streamline your operations.<\/p>\n
Key Takeaways:<\/strong><\/p>\n Apparel inventory management is the unglamorous side of a glamorous industry.<\/p>\n <\/p>\n When your business deals in trends, styles, and tastes, it\u2019s important to be one step ahead of the demand curve. Of course, if it were that easy to predict what consumers wanted, everyone would mortgage their house and go into business. Rather, demand planning<\/a> and proper apparel inventory management helps businesses stay one step ahead.<\/p>\n In the apparel industry, apparel inventory management has unique challenges. Sure, there are the traditional inventory management best practices that must be followed. But there are also strategies unique to apparel inventory management that fashion retailers must consider. They\u2019ll need to quickly unload items that are dipping in popularity and be ready to rapidly order next season\u2019s (or next month\u2019s!) trendiest items.<\/p>\n <\/p>\n In this guide, we\u2019ll help you understand:<\/p>\n <\/p>\n BONUS:<\/strong> Before you read further, download our Warehouse Management Guide Whitepaper<\/a> to see how Logiwa uses real-time inventory tracking<\/a> to help customers get up to 100% inventory accuracy and increase shipments by 2.5x.<\/p>\n Good fashion inventory management is important for three key reasons:<\/p>\n Stock-outs can negatively impact a customer\u2019s short-term and long-term behavior towards a brand. In the short term, retailers lose out on a purchase and there\u2019s very little chance that a consumer will wait around for the item to come back in stock. More likely, they will look to another retailer to fulfill their need, especially in the context of online shopping.<\/p>\n Over the long term, stock-outs erode customer trust. If customers can\u2019t rely on you to have the on-trend items you market in stock, they will stop visiting your virtual or physical storefront and turn to more reliable vendors.<\/p>\n Clothing inventory management costs money. While holding inventory is an inescapable part of doing business, holding too much inventory can be a weight around your business\u2019s neck. Healthy businesses maintain a healthy cash flow, and they can\u2019t do this if money is tied up in things like additional labor hours for managing inventory, additional space for storing inventory, or higher insurance costs.<\/p>\n On top of that, too much inventory means there\u2019s the chance of loss due to damage, lost items, or theft.<\/p>\n Investors look at a company\u2019s inventory to assess its health. Inventory ratios over time indicate how well an organization moves from production to fulfillment<\/a> of customer orders. While investors may use different methodologies to assess a company\u2019s inventory, they are seeking the same answers to questions like:<\/p>\n For both internal employees and external stakeholders, effective inventory management is an essential component of running an apparel business.<\/p>\n There are several approaches retailers can take when tackling apparel inventory:<\/p>\n Small retailers may make a list of their items and take a count by hand. This may include dividing up a sheet into several categories and then adding subcategories for different styles. For instance, one category may be \u201cwrap dress\u201d while the different subcategories range from sizes to colors.<\/p>\n This method\u2019s advantage is that it\u2019s inexpensive and easy to implement for small, boutique shops. The downside is that as your business grows, this inventory management method doesn\u2019t scale up. It\u2019s also more prone to human error, no matter your size.<\/p>\n The spreadsheet method involves using Microsoft Excel or Google Sheets to keep track of your inventory. Counters manually tally items using pen and paper and then enter the information in the master spreadsheet.<\/p>\n Using a spreadsheet is a step up for smaller businesses because it makes it easier to store information, add new categories and subcategories by simply inserting columns and rows, and conduct some basic data analysis using the spreadsheets features. It\u2019s also easier for retailers to access their inventory management info on the go if they\u2019re using a cloud-based tool like Google Sheets.<\/p>\n On the other hand, this method is just as prone to error as the pen-and-paper method, if not more so. There\u2019s a chance for counting errors during the count and <\/i>when the information is being manually entered into the spreadsheet.<\/p>\n Plus, if you aren\u2019t using a tool like Google Sheets, there\u2019s the chance of multiple file versions floating around, which means your clothing inventory management system<\/a> doesn\u2019t have a single source of truth or master data set.<\/p>\n If you\u2019re concerned about counting errors using the pen-and-paper method, consider employing inventory counting apps. The most basic versions allow you to take a picture of an item, enter notes about it, and then upload the photo and information to the cloud. More sophisticated iterations allow you to scan items using a SKU barcode<\/a> and the information will be instantly uploaded to your system. Once the count\u2019s complete, you can download the inventory data in .CSV format.<\/p>\n Using mobile scanners is a great approach since it eliminates manual data entry, which is often prone to errors. Moreover, it makes counts instantly available via the cloud. Depending on the sophistication of the app, this information is either available via a downloadable file or through data visualizations.<\/p>\n For larger apparel companies, an enterprise resource planning (ERP) tool with a warehouse management system (WMS) integration is the way to go. An ERP integrates all back office functions together to create a master data environment and enables optimization through automation. This means that the inventory management system speaks to the order management system<\/a>, and this, in turn, speaks to the WMS.<\/p>\n The WMS automates processes within the warehouse to ensure there is proper oversight on goods from the moment they enter the warehouse (receiving) to the moment they leave the warehouse (shipping). The warehouse inventory software<\/a> manages tasks like pick path optimization<\/a>, dock scheduling, and cross docking<\/a>.<\/p>\n For large retailers, clothing inventory management calls for such a system. Big brands facilitate orders from several channels including online, social media, apps, and in-store. On top of new orders, they have to process order returns<\/a> either by mail or through stores. Complicating all of these activities are consumer expectations for delivery times that grow higher and higher every year.<\/p>\n An ERP that includes a strong system makes apparel inventory management easy for omni-channel brands. When an order comes in, the order fulfillment system<\/a> processes it, and the inventory system is subsequently updated. These systems typically rely on scannable barcodes, or even RFID<\/a> tags.<\/p>\n Small- to mid-sized retailers should consider the ROI of an integrated system, even on a smaller scale. For instance, a system with point-of-sale (POS) integration is an excellent way for retailers to keep their inventory accurate<\/a>.<\/p>\n With POS integration, whenever a customer makes a purchase, the system is automatically updated, improving count accuracy. This also allows managers to cut down on the number of physical inventory counts, since they have regularly updated numbers to reference.<\/p>\n <\/p>\n Don’t Let Your Inventory Become a Liability:<\/strong> Poor inventory accuracy leads to a host of issues that cut into your margins. Learn how Logiwa integrates all your sales channels and provides real-time inventory tracking.<\/a><\/p>\n There are a number of characteristics of the apparel industry that can complicate retailers\u2019 clothing inventory management efforts. Retailers should pay close attention to these trends, assess how heavily they impact their businesses, and plan accordingly.<\/p>\n\n
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Why Does Apparel Inventory Management Matter?<\/h2>\n
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Preventing Stock-Outs and Increasing Customer Satisfaction<\/h3>\n
Keeping Carrying Costs Low<\/h3>\n
Keeping Investors Happy<\/h3>\n
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Strategies for Fashion Inventory Management<\/h2>\n
Paper Method<\/span><\/h3>\n
Spreadsheet Method<\/span><\/h3>\n
Mobile-Based Apparel Inventory Management Tools<\/span><\/h3>\n
Enterprise Resource Planning (ERP) Tool with a Warehouse Management System (WMS) Integration<\/span><\/h3>\n
The Challenges Of Fashion Inventory Management<\/h2>\n
Apparel: One Of The Largest Ecommerce Categories<\/span><\/h3>\n