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Guide to Real-Time Inventory Management for Retailers

Guide to Real-Time Inventory Management for Retailers

Data from our Retail Insights and Shopper Sentiment Report revealed that 2 in 5 shoppers highly value the convenience of checking online for stock availability before their in-store visits

This statistic emphasises the growing prevalence of omnichannel retail, where shoppers use multiple channels to interact with a business and make purchases. It also highlights the pressing need for retailers to adopt real-time inventory management strategies. 

With this in mind, we’ll explore what real-time inventory management is and the benefits it can afford your business.  

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What is real-time inventory management?

Real-time inventory management is the process of continuously monitoring and updating inventory levels as transactions occur using technology like inventory management software or a POS platform

This means that inventory records are updated immediately whenever an item is added, sold, or moved. This provides accurate and up-to-date information about stock levels and helps businesses make informed decisions about purchasing, sales, and inventory control.

7 key features of real-time inventory management

Before we dig into the benefits of real-time inventory management, here’s a snapshot of how the process can impact your inventory workflows and overall operations. 

  • Instant updates: inventory levels are updated instantly as transactions happen, whether through sales, returns, restocking, or transfers between locations.
  • Improved accuracy: minimising delays in recording inventory changes reduces discrepancies between actual and recorded inventory levels.
  • Enhanced visibility: real-time inventory software provides a clear and current view of inventory across multiple locations, which is crucial for managing supply chains, warehousing, and retail operations.
  • Demand forecasting: up-to-date inventory data helps retailers predict demand more accurately, allowing businesses to adjust their inventory levels to meet customer needs without overstocking or understocking.
  • Efficiency in operations: real-time inventory management streamlines processes such as order fulfilment, restocking, and supply chain management, reducing manual errors and operational inefficiencies.
  • Cost reduction: understanding exactly how much stock you have on hand helps maintain optimal inventory levels, reduce holding costs, and minimise waste due to overstocking or obsolescence.
  • Customer satisfaction: accurate stock levels ensure that products are available when customers need them, improving service and customer satisfaction.

Why do retailers need real-time inventory management?

In a nutshell, retailers need real-time inventory management to help improve their efficiency, profitability, and customer satisfaction. Here, we’ll explore some of the key reasons why it’s essential to adopt real-time inventory management in your retail store.

Accurate stock levels avoid stockouts

Traditional stocktaking is typically a manual process using spreadsheets, paper, or basic inventory apps. This makes it extremely time-consuming and prone to human error, both of which will cost money.

 One key reason retailers adopt real-time inventory management software is to ensure they always have accurate stock levels. Real-time updates ensure you know exactly how much stock you have on hand, which minimises the risk of stockouts (which can lead to lost sales) and overstocks (which can increase holding costs), both of which impact your bottom line.

Having access to real-time inventory numbers also helps to reduce inventory shrinkage. Immediate updates will make it easier to identify discrepancies due to theft, loss, or damage, enabling you to take corrective measures before the issue becomes too costly.  

Enhance the customer experience

Ultimately, real-time inventory management elevates the customer experience.

When your customers trust that the products they want are available and that their orders will be fulfilled quickly and accurately, their satisfaction and loyalty increase. Happy customers are not only repeat customers but also brand advocates who spread positive word-of-mouth recommendations and drive new business.

Additionally, real-time inventory management can also give you a distinct competitive advantage by enhancing your business agility

Retailers with real-time visibility over their inventory can quickly respond to market changes, customer preferences, and emerging trends, staying ahead of competitors and, ultimately, enhancing the customer experience. In turn, this can strengthen customer loyalty as your business consistently meets customer expectations with accurate stock levels, building trust and fostering loyalty.

Offer a seamless omnichannel experience

In today’s retail landscape, customers expect a seamless shopping experience, whether they’re browsing online, shopping in-store, or using click-and-collect services. 

To reiterate our earlier point, 2 in 5 shoppers value the convenience of checking stock availability online before visiting in-store

This is where real-time inventory management steps in–becoming the backbone of an effective omni-channel strategy.

By synchronising your inventory data across all platforms and channels, you’ll ensure that your customers receive accurate information no matter how they shop. Plus, displaying your up-to-date inventory levels online provides customers multiple purchasing options, from online to in-store and click-and-collect, ensuring a seamless, omnichannel shopping experience.

This synchronisation eliminates the frustration of unexpected stockouts and enhances the overall shopping experience, driving both sales and customer satisfaction.

Streamline your order fulfilment process

In the fast-paced retail environment, the speed and accuracy of order fulfilment can make or break your business. 

Real-time inventory management ensures that every transaction—whether it’s a sale, a return, or a restock—is instantly reflected in your inventory system. This immediacy means that the moment a customer places an order, your system confirms availability, allocates stock and updates levels across all channels.

The result? Faster, error-free order processing that delights customers and builds loyalty.

Boost supply chain efficiency

Effective supply chain management hinges on accurate, up-to-date inventory information.

With real-time inventory management, your suppliers are always in the loop. Automatic alerts for low stock levels trigger timely reorders, ensuring that your shelves are never bare and your warehouse is never overcrowded. This seamless integration not only optimises stock levels but also strengthens supplier relationships, making your supply chain more resilient and responsive.

Improve data-driven decision-making

Retailers with access to real-time inventory data are equipped with accurate insights to make quicker and more informed decisions about purchasing, sales strategies, and inventory control.

Demand forecasting, for example, can be optimised with real-time inventory data. These insights make it easier to pinpoint demand trends and sales fluctuations, allowing for better planning and inventory optimisation.

From identifying best-selling items to recognising seasonal demand patterns, the insights gained from real-time data empower you to make informed, strategic decisions. Adjust pricing strategies, plan promotions, and optimise inventory levels based on real-time analytics, transforming raw data into actionable intelligence that drives your business forward.

Cut costs

Inefficient, manual inventory management processes can drain your finances. Holding excess inventory ties up capital and incurs storage costs, while insufficient stock can lead to missed sales and unhappy customers.

Real-time inventory management strikes the perfect balance, ensuring you always have the right amount of stock on hand to meet demand without overstocking and draining resources.

Continuously monitoring sales trends and stock levels enables you to maintain optimal inventory, reducing the costs associated with overstocking and freeing up cash flow for other critical areas of your business. This precision in inventory control will allow you to cut costs and directly contribute to healthier profit margins.

How can Lightspeed help with real-time inventory management?

If you’re considering implementing real-time inventory management into your retail business, Lightspeed can help you to achieve this.

In-built inventory management

Lightspeed has a suite of in-built inventory management tools that allow you to seamlessly implement real-time inventory management into your retail business. 

Cloud-based platforms, like Lightspeed, enhance real-time inventory management by providing a centralised infrastructure that ensures immediate updates and data synchronisation across all locations and devices. 

Using a cloud-based platform like Lightspeed to manage your inventory means your data is stored remotely on the cloud rather than on a fixed server that can only be accessed at one location. 

This means as your inventory data is updated, be that through sales or stocktakes, your real-time inventory data is accessible from anywhere, facilitating better collaboration and decision-making. 

Scanner app

Lightspeed’s Scanner app turns your iOS or Android device into a powerful inventory management tool. It allows you to count products, track inventory, and fulfil orders quickly while all the information automatically syncs to the POS. 

Lightspeed’s Scapper app enables real-time inventory management, empowering you to:

  • Eliminate inventory discrepancies and shrinkage
  • Pick, pack and fulfil orders easily
  • Stay on top of stock counts
  • Order and receive inventory with a tap
  • Transfer stock between your locations

4 benefits of real-time inventory management, according to retailers

We spoke to four Lightspeed customers to understand how real-time inventory management has helped their business.

Forecast with confidence

As Pigeonhole expanded from one store to seven, the team found themselves selling over 100 brands in addition to their own. While their previous systems struggled to handle the complexity of their inventory, Lightspeed’s real-time inventory management system allowed them to streamline their process to forecast with confidence.

Now that we can trust the stock levels in Lightspeed, it means that we don’t have to carry as much stock as we did previously. We have stronger cash flow, better forecasts and more confidence in what we buy and what we sell.”

Getting stock under control transformed Pigeonhole’s business operations. Now, their in-store team can focus on creating an exceptional customer experience, which the team believe translates into better sales.

Know your stock on hand

Since transitioning to Lightspeed, the team at Bungalow Trading Co. has seen several benefits, particularly with stock management.

Being able to answer questions about stock and where it is and what we’ve got available has definitely been such a change in our business from what it was when we were completely manual.”

The team also completes stock takes on the Lightspeed Scanner app, which helps ensure their inventory numbers are always accurate and up to date.

“Completing a stocktake is much easier now that we have the scanning function.”

Simple stocktaking

Lightspeed’s real-time inventory management ensures the stocktaking process is quick and easy for the team at LUC Designs. Having up-to-date, accurate inventory numbers also made their end-of-month reconciliations easier.

I wish I had adopted the right technology much earlier. You think small retailers need not worry about it, but it’s been invaluable to keep track of inventory, customers and reporting with Lightspeed.”

“Having up-to-date stock levels in Lightspeed has made stocktake much easier than before. It’s also helped our end-of-month reconciliations and made it so much easier working with my accountant.”

Easy stock transfers

With a strong focus on ensuring every step of the buying journey exceeds customer expectations, the GWS Giants retail team uses Lightspeed’s real-time inventory management to ensure accurate stock counts across locations and mitigate over-ordering.

When we’re transferring stock from the game day outlet back to the main outlet which services the website, we haven’t got those stock transition issues where it said we had ten items, but we’ve sold 15 on a game day, so now we can’t fulfil those… So, being able to have that live inventory that moves between the two has been relatively strong.”

Revolutionise your retail operations with real-time inventory management

In an increasingly competitive and fast-paced retail environment, incorporating real-time inventory management into your retail operations is more than just an upgrade—it’s a necessity. 

Real-time inventory management allows retailers to maintain accurate stock levels, enhance customer satisfaction, streamline operations, make data-driven decisions, reduce costs, and gain a competitive edge. By leveraging real-time data, retailers can ensure that they are always prepared to meet customer demand, optimise their inventory, and operate more efficiently.

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