In today's fast-paced omnichannel retail environment, maintaining accurate inventory counts across multiple sales channels is crucial for success. Effective inventory management is the backbone of meeting customer demand, preventing stockouts, and avoiding overstock situations.
Cycle counting inventory is essential in achieving this accuracy, offering a systematic approach that helps retailers keep their stock records precise and up-to-date. Retailers aiming for 98% to 99% inventory accuracy regularly perform cycle counts to ensure their inventory records reflect reality.
In this blog, we’ll explore how HotWax Commerce simplifies inventory counting in stores for retailers using Shopify POS and NetSuite, ensuring accurate inventory levels across their entire retail network.
What is Cycle Counting Inventory and Why It Matters?
Discovering an issue with your store’s inventory is a headache. That’s why regular inventory cycle counts are worthwhile, even if they’re not the most interesting part of running a retail business.
Cycle counting inventory is a stock auditing process where a small group of products are counted on a specific day. Unlike annual physical counts that require halting operations, cycle counting is a continuous, scheduled process that ensures higher inventory accuracy without disrupting daily operations.
By regularly counting smaller portions of inventory, retailers can quickly pinpoint and address discrepancies, theft, or other inventory issues before they escalate into significant problems. This method allows for minimal disruption to store operations, maintaining inventory accuracy without closing doors and missing out on potential sales.
Accurate inventory data is crucial for meeting customer expectations and preventing stockouts or overstock situations. This continuous improvement in data quality leads to better forecasting, replenishment, and overall inventory management, ultimately supporting more effective retail operations.
The Role of Shopify POS and NetSuite
Shopify POS facilitates effective sales and inventory tracking across multiple locations, enhancing the in-store shopping experience. However, its traditional inventory counting methods can be cumbersome and prone to errors, potentially impacting stock accuracy.
On the other hand, NetSuite serves as a robust ERP system, offering comprehensive capabilities for inventory management and integration of financial data. Maintaining precise inventory records in NetSuite is essential because it acts as the central system for inventory data across all retail locations.
HotWax Commerce complements this ecosystem by offering ready integration with Shopify POS and NetSuite. By leveraging HotWax Commerce, retailers streamline their inventory counting processes, enhancing inventory accuracy and operational efficiency across their retail network.
Common Problem Retailers Face with Cycle Counting Inventory
Human Error While Recording Inventory Counts: Identifying discrepancies is one thing; resolving them promptly and accurately is another challenge.
After counting, store associates can sometimes make mistakes when recording the differences between the actual count and the recorded inventory. For example, if someone enters the incorrect data, it can create inaccuracies that perpetuate through the system.
Consider a store associate counting a batch of sneakers with a systemic inventory of 177 units. After counting, they find that only 171 units are physically present. If the associate incorrectly calculates the discrepancy as 5 pairs instead of the correct 6 pairs, the inventory records will remain inaccurate.
Inventory Data Synchronization: In omnichannel retail, maintaining synchronized inventory data across Shopify POS, NetSuite, and HotWax Commerce is crucial for effective inventory management.
HotWax Commerce synchronizes the Available to Promise inventory data to eCommerce platforms and performs inventory allocations for online orders. Any discrepancy in inventory data can lead to incorrect inventory allocations, impacting order fulfillment efficiency and customer satisfaction.
For example, in the event a store associate completes an inventory cycle count and identifies a discrepancy of 5 units for "Blue Denim Jeans," but this inventory variance information is not promptly updated in HotWax Commerce, Shopify POS, and NetSuite, all systems will continue to show incorrect stock levels.
Shopify POS will still reflect the inventory levels that no longer exist at the store, leading to potential sales of non-existent stock.
NetSuite will also reflect lower store inventory levels than it actually has if the inventory isn't updated, which can lead to discrepancies in financial reporting and merchandisers may fail to reorder items that are genuinely low in stock, leading to potential stockouts.
Therefore, once the inventory counting is done, it is crucial that systems reflect this accurately. Delays in syncing these variances can render inventory cycle counts ineffective because the systems continue to report inaccurate numbers.
How HotWax Commerce Helps Solve these Problems?
HotWax Commerce offers an intuitive Cycle Count App designed to make the process simple and efficient for operations teams as well as store associates.
Operations teams can schedule cycle counts at specific stores, assigning them to the store associates for execution. Once assigned, store associates are notified and can begin the counting process using the app, scanning products and recording the quantities they find.
After completing the cycle count, store associates submit their results, which are then reviewed by operations managers.
Fig 1: Cycle Counting Inventory In-Store
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As store associates scan and record the inventory counts assigned to them for each product, HotWax Commerce compares systemic inventory with the counted inventory and automatically displays the variance amount. This variance is then reviewed by the operations team, providing immediate feedback that helps in identifying discrepancies accurately and reducing the risk of human error in recording inventory differences.
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One of the key advantages of using HotWax Commerce is real-time inventory data synchronization. Once cycle counts are conducted using the Cycle Count App and approved by the operations team, inventory records are updated immediately in HotWax Commerce. This prompt update process ensures that discrepancies are addressed as soon as they are identified.
For example, when a store associate conducts an inventory count for "Blue Denim Jeans," the systemic inventory indicates 50 units, but the counted inventory reveals only 43 units. HotWax Commerce automatically displays a variance of -7 units. The operations manager reviews and approves this variance. Here's how the inventory update process unfolds:
In HotWax Commerce: The Available to Promise inventory data for "Blue Denim Jeans" is decremented by 7 units, updating the systemic inventory to reflect 43 units.
In Shopify POS: The inventory for the product is automatically decremented by 7 units in real-time, ensuring Shopify POS shows 43 units available to sell.
In NetSuite: HotWax Commerce also synchronizes the cycle counting variance to NetSuite, decrementing the inventory of product by 7 units to reflect the accurate stock level of 43 units.
Now, consider an example where an inventory increment is identified. Suppose the systemic inventory shows 30 units of "Red T-Shirts," but the counted inventory reveals 35 units. HotWax Commerce displays a variance of +5 units, which is then reviewed and approved by the operations manager:
In HotWax Commerce: The Available to Promise inventory data for "Red T-Shirts" is incremented by 5 units, updating the systemic inventory to reflect 35 units.
In Shopify POS: The inventory level for the product is automatically incremented by 5 units in real-time, ensuring Shopify POS shows 35 units available to sell.
In NetSuite: HotWax Commerce also synchronizes the cycle counting variance to NetSuite, incrementing the inventory by 5 units to reflect the accurate stock level of 35 units.
This ensures consistency across all platforms. Through these capabilities, HotWax Commerce not only simplifies the inventory counting process but also enhances the overall efficiency and accuracy of inventory management in the omnichannel retail environment.
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Efficient cycle counting inventory is crucial for maintaining accuracy across sales channels.
HotWax Commerce, integrated with Shopify POS and NetSuite, helps retailers achieve precise inventory records. By promptly addressing discrepancies between physical stock and systemic data, HotWax Commerce ensures accurate stock levels and smooths out operational processes.
Upgrade your inventory management with HotWax Commerce to enhance inventory accuracy and streamline your omnichannel operations. Contact an expert today to see how HotWax Commerce can optimize your retail practices.
