Optimising retail consumables

Ian Hall at  CCS McLays describes four key ways retailers can optimise in-store consumables management for smarter retail efficiency

 

In today’s challenging retail landscape – where, according to The Centre for Retail Research, over 120,000 jobs were lost in 2023 and another 54,699 are expected to be lost in 2024 - cost-cutting remains a top priority for many retailers. In this environment, focusing on the management of consumables can have a significant impact on efficiency and profitability.

 

Consumables refer to items that are used regularly and need to be replenished frequently in-store, such as packaging materials, hangers, cleaning products, price tags, and other essential supplies. These supplies are vital for the smooth operation of retail stores, ensuring they can serve customers effectively, maintain cleanliness, and display products properly.

 

However, the challenge comes when retailers either overstock or mismanage these items. Having too many consumables can create clutter in stockrooms, lead to excess storage costs, and result in unnecessary spending.

 

Additionally, if these supplies are not tracked properly, there is the risk of both wastage - when items expire, get damaged, or go unused - and inefficiency, where more consumables are ordered than necessary, tying up resources that could be better used elsewhere in the business.

 

While technology plays a key role in improving efficiency, managing consumables requires a hands-on approach that can have an immediate, direct impact on a retailer’s bottom line. By evaluating how consumables are sourced, stored, and used, retailers can uncover significant opportunities for cost savings and operational improvements.

 

Here are four key strategies to help retailers optimise consumables management:

 

1. Take the helicopter view of consumables management

 Before diving into specific changes, it’s important for retailers to step back and assess their consumables management strategy from a broad perspective. Taking a ‘helicopter view’ means reviewing all aspects of consumables management - from procurement and stockroom organisation to usage patterns and supplier relationships.

 

Retailers should consider how consumables are sourced and whether there are opportunities to consolidate suppliers to reduce costs and simplify operations. They should examine whether there are consumables that are overstocked, occupying valuable storage space and tying up resources.

 

They should also consider how much of their consumables are being wasted or discarded due to over-ordering or under-usage.

 

By regularly stepping back and evaluating these factors, retailers can make more informed decisions about which consumables to prioritise, which to reduce, and how to better manage them moving forward.

 

2. Improve procurement strategies to reduce costs

Inefficient procurement is a common issue across retail operations, with many stores sourcing consumables from multiple suppliers, leading to overspending and administrative burden. Consolidating procurement through a single or centralised process can help eliminate these inefficiencies.

 

By managing orders for essential items like size cubes, bags, and cleaning supplies through one channel, retailers can benefit from bulk discounts, streamlined deliveries, and better oversight of spending. This approach reduces supplier complexity, allowing store associates to focus on enhancing the customer experience rather than managing repetitive purchasing tasks.

 

3. Balance consumables usage and inventory

Effectively managing consumables is about more than just tracking stock - it’s about ensuring the right items are available at the right time, in the right quantities, without unnecessary waste.

 

Retailers often face challenges when it comes to balancing consumables inventory. Overstocking can lead to storage clutter, excessive costs, and waste, while understocking can cause delays or disruptions in store operations, such as running out of packaging materials or cleaning products.

 

To optimise consumables management, retailers need to focus on closely monitoring usage patterns. By understanding how frequently each consumable is used, stores can better forecast demand and avoid over-ordering or running low on critical supplies. This approach helps to ensure that essential items are always available when needed, without the risk of unnecessary excess.

 

Stock control remains an important element in consumables management, but the key is to take a more strategic approach that aligns inventory levels with actual usage. For example, automating reordering based on real-time consumption data can help retailers maintain the right balance of supplies, reducing the risk of both stockouts and excess stock.

 

Organising stockrooms is also a critical part of optimising consumables. A well-organised space makes it easier to locate and manage consumables, preventing over-ordering due to the inability to find or access the right items. By ensuring consumables are properly stored and easily accessible, retailers can save time and reduce operational inefficiencies.

 

Focusing on both consumables usage and inventory control will help retailers streamline their operations, reduce waste, and maintain a consistent flow of essential supplies.

 

4. Leverage data

In the data-driven world of retail, using insights from procurement and usage data is key to optimising the management of in-store consumables. By analysing patterns in consumables usage, retailers can identify inefficiencies and better align inventory with actual demand.

 

For example, data might reveal that certain items are being consistently over-ordered, or that deliveries could be consolidated to reduce costs. By making data-driven decisions, retailers can optimise the entire supply chain - from procurement to delivery - ensuring they’re managing consumables in the most cost-effective and efficient way.

 

The benefits of optimising in-store consumables

Optimising consumables management can have a substantial impact on a retailer’s operational efficiency and bottom line. By improving procurement strategies, streamlining stock control, and using data for smarter decision-making, retailers can reduce administrative burdens, cut operational costs, minimise waste, and improve cash flow.

 

Retailers should continually assess and refine their consumables management processes to ensure they are as efficient and cost-effective as possible. Taking a strategic, data-driven approach to consumables management enables retailers to achieve long-term improvements in profitability and operational efficiency, allowing them to thrive in a competitive and challenging retail environment.

 

---

 

Ian Hall is CEO at  CCS McLays

 

Main image courtesy of iStockPhoto.com and Vadim Cazacu