It’s that time of the year again when festivities are in full swing, and so is the demand for your products or services. But here’s the deal – running out of stock during this merry season can be a real downer, and we’re here to make sure that doesn’t happen to you!
No more missed opportunities or unhappy customers – let’s dive right in!
8 Strategies to Prevent ‘Out of Stock’ During Festive Seasons
Now, imagine that the festive season is in full swing, your online store is buzzing, and everyone’s in a shopping craze. But wait, what’s that? Yes, you guessed it – “Out of Stock” nightmares are creeping in!
Referring to the Harvard Business Review, the response to stock-outs varies by product category. In some cases, 7% to 25% of consumers keep shopping without choosing a substitute, while 21% to 43% head to another store to find the item.
But, don’t stress about losing out on a customer! Let’s check out how to keep those products in stock and your customers smiling from ear to ear during the festive chaos.
1. Assessing demand
By nailing down this demand assessment part, you’ll be in a much better position to make informed decisions about your stock levels and product offerings, and that means a lower risk of running out of stock during those festive times.
Historical data analysis
- Examining past festivities: Let’s time travel back to past festive seasons. Any items that just flew off the shelves? Noticed any trends in demand?
- Identifying trends: Keep a keen eye out for recurring patterns or shifts in demand during specific festivals. These insights are pure gold.
Last year, we spoke to the founder of an online gift shop – The Square Prints co., who gave us some golden nuggets on how to manage demand during the festive rush! And one of the main advice that he had to give was that :
“Keep a close watch on your best-selling products. Start early, understand the time that you get before the rush starts, and stock your shelves accordingly” – Safeer VC.
- Consumer preferences: You might want to chat with your customers or send out surveys to see what they’re looking for during festivities. Understanding their preferences is key.
- Competitor analysis: What are your competitors up to? Analysing their past performance and offerings can help you anticipate market demand.
- Using forecasting tools: Utilize forecasting software and methods, like time series analysis, for data-driven demand predictions.
- Collaborating with suppliers: Keep your suppliers in the loop! Share your demand forecasts, so you can work together to keep those stock levels in check.
Also, have a look at Indian festive shopping trends (2023) for eCommerce categories that will see high demand.
2. Inventory management
Based on research findings by Retail IT Insights, inventory issues led to global losses of $818 billion within a year. Of this total, approximately 52% resulted from out-of-stock situations, while the remaining 44% was attributed to overstocking.
Managing your inventory smartly is like having your stock on a tight leash. It ensures you have enough to meet demand without drowning in excess stock.
Setting optimal stock levels
- Safety stock: Think of it as your safety net – that extra stock ready for unexpected demand spikes or supply glitches.
- Reorder points: They’re like tiny alarms, ensuring you restock at just the right time – no more running out or overstocking.
As per findings by Reliant Funding, around 34% of businesses have faced instances where they inadvertently sold a product that wasn’t present in their inventory, leading to delays in shipping orders.
Implementing Just-in-Time (JIT) inventory
JIT is like the Goldilocks approach – not too much, not too little. It’s about having just the right amount of inventory at just the right time.
Learn from Satish Dinodiya of Pickrr – “A thorough understanding of customer behaviour and aspirations are critical to a D2C brand’s success. Know your customers, the geographies they are ordering from and the kind of surge expected. Keep the warehouse relatively close to your customers to reduce turnaround time,” as said to Inc42.
Prioritizing popular items
Not all items are created equal. Focus on the ones that sell like hotcakes during festivities. Make sure they’re always in good supply.
Use ABC analysis to classify your items. ‘A’ items are the high-value ones, so keep a close eye on them. ‘B’ and ‘C’ items can be managed differently.
Related read: 5 Top inventory management tools for small businesses
3. Supplier relationships
Source: Level Research
Webinar Care reports that up to half of a company’s value may hinge on its supplier relationships. Currently, an estimated 40% of disruptions in the supply chain happen within suppliers ranging from Tier 2 to Tier 10. Surprisingly, many supply chain professionals predominantly engage with their Tier 1 suppliers.
Think of your suppliers as your allies on the battlefield of inventory management. The stronger these bonds, the more resilient your inventory will be, especially during the festive season.
Strengthening relationships with suppliers
- Effective communication is your linchpin. Keeping them well-informed about your needs and plans is paramount.
- During negotiations, aim for win-win agreements that satisfy both sides, fostering a sense of mutual benefit.
Contracts and agreements
- Formalize your commitments with well-defined supply agreements that establish clear expectations.
- Consider incorporating service level agreements (SLAs) to ensure your suppliers consistently meet your established standards.
4. Technology solutions
With the following tech tools at your disposal, you’ll be equipped to tackle inventory challenges with ease during festive times. They make your job smoother and more efficient.
Point of Sale (POS) systems
These systems are like your frontline soldiers. They capture sales data in real time, giving you immediate insights into what’s flying off the shelves.
RFID and barcoding systems
Source: Markets And Markets
These are like your inventory detectives. They help you quickly locate items and reduce errors in your stock management.
eCommerce and order tracking tools
Online sales are a big deal. Use tools that help manage your eCommerce inventory seamlessly and keep an eye on order status. With Instamojo’s auto tracking feature, now you can easily keep your customer updated on where the order is!
Here is a short tutorial of how it works:
5. Demand forecasting
Source: Winter issue 2017/2018 of the journal of business forecasting
By mastering demand forecasting, you’ll be better prepared to meet customer demand, ensuring you don’t run out of stock when the festivities kick in. It’s like having a secret weapon to stay ahead of the game.
Imagine a team huddle. Collaborative forecasting involves getting input from different departments or experts to refine your predictions.
Regular updates and adjustments
Think of this as fine-tuning. Keep your forecasts fresh and adapt them as you gather new data during the festive season.
6. Efficient replenishment
Did you know that 70-90% of stockouts result from poor stock replenishment? Only 10-30% are due to factors like inventory shortages or supply chain issues.
Efficient replenishment ensures you’re always prepared for the festive rush, without overloading your shelves or running out of stock. It’s like having a well-oiled machine in your inventory management process.
Think of this as hitting the ‘refresh’ button. Reorder products in time to avoid running low during the festivities.
Economic Order Quantity (EOQ)
This is like finding the sweet spot. Calculate the ideal order quantity to balance inventory costs and availability.
Vendor-Managed Inventory (VMI)
It’s almost like outsourcing your inventory management. Let your supplier monitor and restock based on real-time data.
Imagine a shortcut. Cross-docking minimizes storage time by moving goods directly from suppliers to customers or stores.
7. Storage and warehousing
Source: Expert Market Research
An amazing fact!
As said by IMARC Group, in 2022, the Indian warehouse market was valued at INR 1,248 Billion. IMARC Group forecasts that the market will expand to INR 2,271 Billion by 2028, with a projected growth rate (CAGR) of 11.5% from 2023 to 2028.
By mastering storage and warehousing, you’ll keep your inventory safe and sound, ensuring everything is in its place and ready to go when the festive season hits. It’s like having a secure vault for your goods.
Optimizing warehouse space
Think of it as a game of Tetris. Arrange your inventory efficiently to maximize space and accessibility.
FIFO and LIFO methods
FIFO is like eating your veggies first. It stands for “First In, First Out,” ensuring older stock gets used first. LIFO is the opposite, “Last In, First Out,” which can be handy for specific items.
This is your reality check. Regularly audit your inventory to ensure it matches your records, uncovering any discrepancies.
Preventing theft and damage
It’s like installing security systems. Implement measures to safeguard your inventory from theft or damage, especially during busy seasons.
8. Continuous monitoring and analytics
With continuous monitoring and analytics, you’ll be equipped to steer your inventory ship through the trickiest of waters during the festive season. It’s like having a navigation system that keeps you on course and helps you avoid obstacles.
Real-time inventory tracking
Think of this as your GPS for inventory. Track your stock levels in real time to catch any issues as they happen.
Key Performance Indicators (KPIs)
These are your dashboard dials. Use KPIs to measure inventory performance and make informed decisions.
Related read: Top eCommerce KPIs across different business stages
Analysing data for improvements
It’s like reviewing game tape. Analyse data to spot trends, identify areas for improvement, and fine-tune your strategies.
Adjusting strategies as needed
Flexibility is key. Be ready to adapt your inventory management strategies based on what the data tells you.
Moreover, this ebook is the perfect resource that coils help you to improve your post-purchase experience to increase customer retention by 10x.
Boost festive success and create online store with Instamojo
The festive season is more than just a time for celebration; it’s a golden opportunity for businesses to thrive. However, with great demand comes great responsibility, especially when it comes to managing your inventory and ensuring your customers have access to the products they desire.
The customers are ready to buy. Don’t miss out on orders while juggling social media messages. Get an eCommerce website to streamline order collection and management, all in one place.
Sign up to Instamojo, your ultimate ally in elevating your festive success. If you are starting out, Instamojo is the one-stop solution for all your online store that comes with its integrated payment gateway.