Tracking SKUs on-the-go in the World of E-commerce Retail
October 24, 2023
The phenomenal scale and reach of e-commerce have changed how retailers now manage their inventories. In 2022, the worldwide e-commerce logistics market was valued at USD 315.82 billion. It's projected to expand at a 22.3% annually from 2023 through 2030. The e-commerce players want to make the most out of this enormous opportunity and try to maximize their offerings to meet maximum customer needs.
But, this has led to a supply chain planning, inventory management, and logistics nightmare in the backend. In this article, we'll delve into the complexities of monitoring multiple products, also known as Stock Keeping Units (SKUs), and how real-time data can help to a great extent in making informed supply chain decisions.
The E-commerce Effect on Inventory Management
E-commerce has changed the way people shop now. But more importantly for businesses, it has changed how supply chains are organized. There are several reasons for this:
Variety Spice: Online shoppers expect a wide range of choices. This means retailers must stock up on a broader variety of products than ever.
Volume Surges: Flash sales, festive discounts, and exclusive launches lead to sudden peaks in demand, necessitating higher inventory volumes.
Quick Turnarounds: The promise of fast deliveries, sometimes within hours, has put immense pressure on warehousing operations and last-mile deliveries.
The combination of these expectations is still unique to e-commerce. Therefore, the supply chain strategy has to change to meet these expectations. And one of the significant parts of this strategy is effectively managing the spread of SKUs. Let us understand the nuances of this challenge better.
3 Big Issues of SKU Tracking
While managing the SKU spread is critical for e-commerce business, it is not easy by any measure, especially when companies try to approach it through traditional ways. The tracking of an enormous SKU portfolio is difficult. Here is why:
Multiple Variants: A single product might come in various sizes, colors, or other attributes, each with its SKU. This challenge is multifold with the apparel, footwear, and even electronics since they can have multiple configurations and color combinations. On top of that, electronics have a very short life cycle. So, a poorly managed variant plan can quickly lead to high inventory obsolescence.
Dynamic Inventory Levels: Keeping an accurate count is challenging, with products constantly moving in and out. This is because the products can look similar. Imagine managing inventory for sizes 40 and 41 for identical shoes next to each other with damaged or mixed-up size labels. That's horror in the flesh.
Returns & Exchanges: Now, with the high variants, the customers have their fair share of confusion and errors. These can be color preferences or size issues. E-commerce sees a higher rate of returns and exchanges, further complicating SKU tracking.
So, if the challenges are enormous, what can the businesses do to overcome them and focus on selling more instead of sorting mix-ups?
One way to look at it is that data is huge and needs to be managed effectively and in real time to make life easier. We have a few really effective suggestions.
Harnessing Real-time Data for Effective SKU Management
In such a dynamic environment as e-commerce, making decisions based on outdated data can quickly lead a company to a downward spiral. Here's how real-time data comes to the rescue:
Accurate Stock Levels: While stocks move in and out daily, knowing exactly how much each SKU is available helps reduce the chances of overstocking or stockouts. It also helps the companies ensure that no customer orders get canceled due to phantom inventory.
Demand Forecasting: A lot can be extracted by looking at the historical trends of any SKU. With real-time data, analyzing sales trends is possible on a daily and weekly bucket to predict future demand for each SKU, ensuring you're always prepared.
Phase-in and Phase-out: When there is an elaborate SKU portfolio, managing the phase-in of new SKUs and phase-out of the end-of-lifecycle SKUs can be a daunting task. Going wrong on this can lead to missed sales or inventory obsolescence. With real-time data, getting a grip around it becomes much more manageable.
Optimized Warehousing: Warehouse turnaround time is crucial to match today's customer expectations of speed from e-commerce. By understanding which SKUs move faster, businesses can maximize warehouse layouts for efficiency.
So it is evident that the benefits are many. But whom to rely on for enabling such real-time SKU data management? We have a solution.
Holocene's Contribution to Streamlined SKU Management
Holocene's platform offers features that complement SKU tracking in e-commerce. It acts as an enabler to your existing supply chain and inventory management systems in multiple ways:
Data Integration: Holocene can integrate with various systems, ensuring that all your SKU master data is in one place and always up-to-date.
Visibility: Holocene can provide a clear view of your entire supply chain, from procurement to last-mile delivery, with efficient SKU management.
Product Performance Analytics: Dive deep into SKU performance, understand sales patterns and make data-driven decisions for your portfolio.
For e-commerce, efficient SKU tracking is not just an operational need but a strategic imperative. With platforms like Holocene providing the necessary visibility and analytics, retailers can confidently navigate the complexities of SKU management. As e-commerce continues to grow, those harnessing real-time data's power will undoubtedly lead the pack.