There’s one prevailing challenge across many industries: fostering proactive, effective cross-departmental communication. And though it’s simple in theory, encouraging employees to interact with colleagues from different parts of your business is more difficult than it seems. But it’s also extremely important, especially when it comes to retail operations and marketing.
When ops and marketing aren’t in sync, you put your business at risk for a number of challenges that may disrupt your internal processes or end in a poor customer experience. Imagine the marketing team sending an email for half-off springtime dresses to a list of 5,000 subscribers when you only have five in stock.
Your operations team has a responsibility to share essential updates with marketing. Here are five updates they should share:
When a new order has been placed or arrived at the warehouse, that’s an update your operations team should proactively share with marketing. This helps time marketing campaigns for when the stock will actually be available, and before it becomes too old.
ErgoMounts prioritizes these types of updates between ops and marketing. Because many of their products are manufactured overseas, lead time can be as much as 16 weeks for certain products. “We have to carefully coordinate our marketing campaigns to push products that are recently in or coming into stock in a large quantity,” says Shane Dunn of the marketing team.
Change in product category
The product categories in your inventory management software may differ from the consumer-facing product categories on your website. So whether marketing is optimizing the site for more traffic or conversions, or operations is recategorizing products for better warehouse organization, it’s crucial that these updates are shared cross-departmentally.
When ops recategorizes an item, and the marketing team is unaware, this can cause misinterpretations in analyzing your data. “It’s most important to align the data on the financial end, because by not doing that, it makes it really difficult to compare everything else,” says Chris Guillot, instructional designer of Merchant Math and founder of Merchant Method.
“It may look like the bottoms or the pants department is way down because you’ve pulled out dresses,” she explains. “So your buyer may decide to buy less of that whole category or department, when in fact if the data was properly aligned, you might be seeing something very different.”
When inventory of a certain item or category is running low, it’s crucial that your ops team shares that information with marketing. If marketing is running any promotions for those products, they can pull back their efforts and avoid potential out-of-stocks, which are costly for retailers and push customers towards your competition.
INTO THE AM, which sells graphic tees, hoodies and tank tops, automates several cross-departmental updates from ops to marketing, including when inventory is nearing out-of-stock. “Before we had this type of communication, we had lots of issues in terms of overselling and marketing products that have low stock,” says digital manager Darren Schreher.
Just as stock that’s flying off the shelves should warrant extra attention, inventory that isn’t moving should also be prioritized. The longer stock goes unsold, the more you have capital tied up in extra inventory. Plus, especially in fashion, that stock may expire before you have a chance to sell it.
Camera bag retailer Peak Design sells across many online and offline channels, plus manages five international warehouses. With such a robust business, it’s important that internal teams are on the same page.
They provide the marketing team access to their Stitch Labs inventory management system, so that marketing can see which stock is sitting for too long and react accordingly. This is especially important for Peak Design, because they keep their inventory as lean as possible, only buying when they really need to.
“We’re a small company with no outside investors, so cash flow is really important us,” said Jen Howell, director of logistics and customer success. “We need to keep our inventory very lean, and we have to do this across all five of our warehouses so it’s a constant balancing act of trying to keep our warehouses properly stocked and not tying up our resources.”
Sales vs. profit
Sales vs. profit is one key metric that every data-driven retailer should keep a close eye on.
Sales = how much you’ve sold
Profit = how much money you’ve made from your sales
Sales accounts for total number of sales in dollars and nothing else, whereas profit accounts for the expenses associated with each sale. When ops looks at sales vs. profit, they’re understanding how those sales are contributing to the company’s bottom line. Changes in sales vs. profit, and when a company is no longer profitable, should always be shared internally.
At Concrete Camouflage, they pay extra attention to the sales vs. profit metric. “If a marketing team runs a sales promotion, and the increase in volume doesn’t offset the lost percentage of profit per order, then it didn’t provide a positive ROI,” says CEO Earl Choate. “Let’s say you typically sell 100 items per week. If you run a 20%-off sale that week, then you’ve lost a large percentage of your profit margin on those 100 items that you would’ve sold anyway. The increase in number of items sold for that week has to pay for the lost profit and then generate its own profit margin to have been worth the time and effort.”
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