If you’ve ever purchased anything in a small department store or individually owned store, you’re probably familiar with you select your purchases and take them to the register, you’re asked your name or whether you have a card specific to your account in that store, and your account is called up on the computer before the cashier rings up your purchases. While some may see this as an inconvenience, to small businesses this provides a vital piece of information. It will allow that business to not only increase inventory turnover, but also make sure that the items their customers habitually buy are in stock when they’re needed.
Know what to order and when
Customer data not only tracks how much of which products are selling, it also tracks what time of the month they generally buy and in what quantities. If a particular customer comes in and buys ten of a particular item every month and you order enough to have ten that month, but not at the same time, it doesn’t do much for customer satisfaction. On the other hand, it also lets you know whether customers tend to buy a particular item one at a time or in large batches as a general rule, which can help determine how many shelf facings they get and how many of the item will be on the shelf at a time.
Who is buying?
Aside from just what they buy, customer data can give excellent insight into whether or not your target market is who you think they are. These accounts generally have information such as the person’s home address, their phone number, gender and age attached – all important factors in how someone makes a buying decision. From this information one can deduce the approximate value of the person’s home (i.e. lower-class, middle-class, etc.), whether they have a cell phone or land line, and in which phase of life they’re likely to be. All of this gives an extra hint into what they’re likely to buy (hint: if your primary customers are women aged 50-60, you probably don’t need to carry too many maternity supplies), allowing you to fine-tune your inventory so that what remains will turn over quickly.
Insight into purchase behavior
While inventory control systems usually track what is bought, it doesn’t show what was bought in a single purchase. This offers insight into not only what a person buys, but why they buy it. For instance, if someone buys a paintbrush along with trim protector tape and drop cloths, one can assume that they’re likely working on a home improvement project. On the other hand, if the same person buys a pre-stretched artist’s canvas along with that paintbrush, it’s pretty obvious that the motive behind the purchase is entirely different.
Why is this important? It tells you whether the customer is likely to need house paint and new cabinet handles next, or if they’re far more likely to need oil paints and paint thinner. This kind of information is absolutely vital in ensuring that you offer exactly what your customer is after with every purchase.
Opportunities for bundling products
There are virtually no products that are purchased by themselves. One of the ways that you can boost revenue and increase inventory turnover is to bundle together packages of items that are generally purchased together and offer a small discount for the purchase of the entire bundle. Consider putting in at least a couple of items that are slow sellers, or new products that few people have tried but might catch on once your customers begin to use them. Popular, hot products should still make up the majority of the bundle so that there is still a sufficient amount that customers know will be valuable to them. Without customer data, it would be virtually impossible to know how best to organize these bundles because you would not know what is being purchased together normally.
Finally, customer data and knowing what customers are most likely looking for when they purchase a specific item will help you decide where to display products to the best advantage. If you know that that particular type of paintbrush is more often purchased by the home improvement person then you can set it in the display next to the indoor/outdoor house paints, whereas it may be completely wasted if that same brush were displayed next to the artist’s paints. The more streamlined the displays the more likely it is that your customers will find exactly what they’re looking for, and the more likely they are to buy more and keep coming back, thus significantly boosting inventory turnover.