Successful retailers know how to recognize industry trends quickly and respond in ways that keep customers coming back for more. Their ability to capitalize on changing consumer preferences was put to the test by the restrictions implemented during the COVID-19 pandemic. One trend that will persist in the “new normal” is buying online and picking it up at the store, or BOPUS.
A consequence of the tremendous rise in online orders for restaurants and retailers is the need to provide customers with real-time inventory access to ensure the products they want are available before they make the trip to the store. Par stock inventory provides restaurants and other retail and hospitality businesses with a way to reduce waste and keep sufficient supplies of products on hand without tying up valuable capital on excess inventory.
The process of implementing par stock inventory for your business is facilitated by today’s cloud-based POS systems that integrate real-time inventory tracking with sales, accounting, invoicing, and other business operations.
How to Calculate a Product’s Par Stock Inventory Level
Par stock inventory, or par level inventory, matches inventory with customer demand. That may sound simple, but as any retailer knows, customers are a fickle bunch, and predicting their shopping preferences can sometimes feel like rocket science.
The first step in implementing par stock inventory is having a clear picture of your store’s current inventory levels. A cloud-based POS system with a barcode scanner is the best tool for knowing what’s currently in stock by tracking each product as it is received and as it goes out.
The goal of par stock inventory is to have only enough of a product on hand to last until the next delivery. The par value formula calculates a product’s par level by comparing its average inventory usage over a set period, plus a safety stock amount, with the number of deliveries received in that period. Your POS system’s historical sales data indicates the inventory passthrough for each product and the number of shipments received over a set time.
As an example, a restaurant sells 200 salmon dinners each week, each of which uses a half-pound of salmon. The restaurant receives fresh salmon each day, so if it will need 100 pounds of salmon each week, plus a 25% safety stock, then each day it must keep about 18 pounds of salmon on hand. That is its par stock level for salmon.
How Par Stock Inventory Benefits Businesses
All types of businesses can use par stock inventory to improve the efficiency of their inventory management, but restaurants are among the biggest benefactors of the technique because they are more susceptible to losses caused by spoilage and food waste. Here are four ways that par stock inventory can boost a small business’s profitability:
Inventory tracking in your POS system helps you identify the sources of product leakage, whether due to improper storage, vendor fraud, administrative errors, or employee theft. The POS system can be set to issue discrepancy alerts as well as to include voids, returns, and exchanges in its inventory counts.
The sales and inventory tracking features of POS systems provide retailers with a clearer picture of the products and services that customers prefer, which helps stores decide which products to promote, and when. The systems also identify items that would make popular bundles and those that would benefit most from discounts and other promotions.
Many of the items that restaurants keep in their inventory need to be tracked by the ounce or gram rather than by the quantity purchased. POS systems can break down the amount of various ingredients used in each menu item to ensure that restaurants have an accurate count of all products in their inventory.
Service-Based Inventory Tracking
Businesses such as spas and beauty salons use various products in their inventory as part of the services they offer their clients. POS systems allow these establishments to calculate their inventory based on each specific service they provide such as the amount of shampoo, conditioner, and hair color dye used for various treatments.
Use Par Stock Inventory to Create More Accurate Inventory Models
The value of the data you collect and analyze about your business and your customers depends on it being accurate, complete, and up-to-date. Your POS system helps ensure that the analyses you use to inform your business decisions check all three boxes. The inventory management features built into the POS system must make the data easy to access in a form that is clear and insightful.
Among the POS features that support par stock inventory management are automatic alerts when sales of specific items decline, tracking of online product views and abandoned shopping carts, and product sales by specific staff members to indicate which are generating the highest number of sales per item. In addition, the inventory information gleaned from your POS data provides you with a glimpse of your business from your customer’s perspective by indicating purchase trends as they change in real-time.
Modern POS Systems Do the Heavy Lifting for You
The era of personalized retail has dawned, and the retailers who are able to establish personal connections with their customers when dealing with them in person and online will be most likely to capitalize on this trend. The centerpiece of your business’s push toward personalization is a modern cloud-based POS system that integrates inventory management with sales, marketing, accounting, and other key processes to the benefit of your customers and your business.
Partnering with talech will help you simplify your par stock inventory needs. Our modern POS technology helps to bring every aspect of your business together and does the work for you so you can stay focused on building your brand and profit. Reach out to us today to sign up for a demo and to learn more about how talech can be your valued POS partner.
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