As winter rolls on, we’re steadily approaching what is, for many companies, the busiest time of the year. December is anticipated to bring higher levels of spending across all product categories, including clothing and accessories, entertainments, toys, electronics, beauty, food and drink, homeware and alcohol. In fact, in the run up to Christmas, the Bank of England estimates that a typical British household will increase their spending by around £500 extra in December.
This shouldn’t come as much of a surprise that people spend a lot more at Christmas time going out, eating and drinking and, of course, spending money on gifts for family and friends. A lot more of this spending is being done online. The value of online shopping has nearly doubled in just the past three years, and it now accounts for £1 in every £6 we spend. And with November events such as Black Friday and Cyber Monday well and truly integrated into British culture, people start this spending even earlier.
This time of year is both a blessing and a curse for the likes of SMEs. It has the potential to allow businesses to capitalise on the festive spend, but with the added pressure that comes with trying to meet the demands of consumers during this busy and stressful time. The importance of a business having an effective stock control system in the lead up to Christmas cannot be overstated.
Christmas time can bring uncertainties when it comes to managing stock. Whilst this time of year will bring predictions of sale highs or lows, even using historical sales data could still result in the unfortunate scenario of being sold-out or overstocked around the busiest time of year.
The last thing an SME wants is the negative connotations of being out of stock (and how that will affect their company image) or wasting money buying stock that remains unsold. Effective stock control systems can help to avoid over or under buying stock. Barcode label printing can eliminate manual count mistakes and speed up locating and processing stock, improving stock turnover and reducing wastage. Even if a businesses’ predictions for Christmas time turn out to be inaccurate, having a good stock control system in place can help to minimise the financial impact.
An increase in sales comes with the drawback of a potential increase in returns. As online spending has increased, so too have the demands of consumers for quick, easy and often cost-free returns of goods. Research suggests that a staggering 80% of people are more likely to shop somewhere that offers free returns, with over half claiming that it would ‘make or break’ their purchase decision.
Returns can be a problem for small businesses, particularly if they are expected to foot the bill for the return of faulty items. Reports estimate that the cost of returns will amount to approximately £60 billion a year for UK retailers – a figure that is expected to be higher in 2018. But with consumers so turned off by businesses without convenient return policies, it seems SMEs have no choice but to comply if they want to attract business.
Stock control systems can help to prevent the process of returns from dragging so heavily on a company’s profits. When every item of stock is tracked, returns process will be less painful, as the items can be located quickly and easily. Stock management software can be used to assess whether a company has space to store the returned items and evaluate any supplies or equipment needed to put the item back into a re-sellable state – i.e. steamers for de-creasing apparel.
Returns can also be used to fill back orders. If the returned item is on backorder, it can be shipped to a waiting customer rather than being restocked first. This is all possible with an effective, automated stock management system. It streamlines the process, minimising the negative impact returns can have on SMEs.
Even if a customer is unsatisfied with their purchase, they will remember a company more favourably if they handled their issue well. Returns might mean stock making its way back to the warehouse, but that customer is more likely to return and do business in the future if they had a positive experience.
Similarly, a company will not be looked on favourably if they build a reputation for running out of stock around Christmas time. Effective stock control that eliminates these issues can be invaluable for building a loyal customer base. People will go back to businesses they know and trust to do a good job. So, investing in effective stock management now is an incredibly lucrative investment.