Discover What's Growing at Treez

Top 3 Ways Inventory Visibility Reduces Overhead and Boosts Revenue

May 20, 2020 9:00:00 AM / by Caitlin Pellas

Screen Shot 2020-05-19 at 5-31-06 PM

In today’s cannabis market, there’s an overload of communication between retailers and brands around maintaining the buyer-brand relationship. In most cases, this overload is caused by a lack of real-time data being exchanged, making it so that both parties need to be in a constant state of requesting and sharing inventory level data to avoid stockouts. An unfortunate side-effect of this manual communication strategy is that it’s become customary for buyers to stock brands that they have a good relationship with instead of using data to inform these revenue-driving decisions. This forces brands to spend a lot of time communicating with buyers about sales and inventory levels in order to coordinate orders since sales data isn’t being proactively shared with them.

Due to the current instability and unpredictability of the market, the average cannabis retailer in California is dealing with 14+ distributors who all have unique schedules and processes, making them even more time-consuming to manage. As a result, retailers need to keep full-time buyers on staff to manage the sheer volume of communication around the logistics of ordering. By proactively exchanging real-time inventory & sales data through a secure channel on a defined schedule, retailers can make a material impact on their business and the cannabis industry as a whole. With this in mind, let's take a look at the top three ways that providing inventory visibility will reduce labor costs and supercharge the supply chain.

1.  Immediate alignment = lower overhead

When data is shared among partners, everyone is on the same page because everyone is using the same information as the launch point for communication. The tools in AskTreez produce and share information automatically through useful reports and dashboards. Without the automated dashboards in AskTreez, the reordering process remains manual, requiring time and labor to manage. Many brands have a rep who’s responsible for contacting retail partners by any means necessary, just to stay on top of sales rates and forecast the number of units a store will need to repurchase for the next period of sales. For retailers, without having regular stock dates optimized for their rate of sales, they’re either keeping way too much stale inventory on hand because they fear stockouts before the next delivery, or they’re bearing the consequences of stocking out of their best-selling products. The dashboards in AskTreez automatically update at the end of each day, removing the manual work and giving retailers and brands a real-time window into product performance. 

Now, whenever buyers and brands meet, they’ll have the most up-to-date metrics they can use to inform inventory and ordering decisions. This takes the buyer-brand relationship out of the decision-making equation and puts the emphasis on actual performance. Conversations become more productive, which means less wasted time and less money spent on labor costs.

2.  Increase profitability with modernized replenishment tactics

When partners are transparent by consistently and proactively sharing information with one another, it can lead to purchasing agreements that are beneficial to both parties. Retailers that utilize the tools in AskTreez effectively could even initiate vendor managed inventory arrangements. Vendor managed inventory (VMI) is already the standard in most established retail verticals. For example, when a supermarket is running low on Coca-Cola, they don’t pick up the phone to order more. Instead, a shipment will show up with the exact right amount of Coca-Cola at the exact right time since vendors are keeping tabs on their own inventory at the supermarket. Establishing VMI agreements creates more profitability for both the brand and the retailer through reduced unit costs for retail, more volume for brands, and reduced labor costs for both parties. 

AskTreez enables brands and retailers to establish a VMI agreement due to the real-time nature of the insights, which is made possible through BrandTreez. When a brand creates a listing on BrandTreez, a unique identifier is assigned in the background that allows Treez to track each product’s performance across all Treez retailers instantaneously. By feeding this performance and inventory level data back into AskTreez in real-time, brands are able to keep a finger on the pulse of their product's performance and have more timely replenishment conversations. This is in direct contrast to how the industry functions today. Currently, cannabis data companies do not have access to live POS data, so it takes them anywhere from 30-90 days to collect and clean the data, and then surface those insights to brands. This timeline makes the insights somewhat obsolete since they are over a month to a quarter old once brands receive them, and doesn't even open the door for VMI conversations. 

Additionally, since Treez handles more than 25% of California’s transactional volume – which is the point at which a data set has statistical significance and can be used to make accurate assumptions about the greater population, in this case, the entire state of California – brands are equipped with the data they need to break into other regional markets, even if the retailers there aren't on Treez. By leveraging this market data in AskTreez, brands can make production, forecasting, and other important product decisions based on today's trends, not on last quarter’s trends. BrandTreez brands who leverage AskTreez data have the opportunity to be trendsetters, not followers, and to cut through the noise and establish themselves as leaders. Retailers will be more open to establishing purchasing agreements with brands that can effectively manage themselves and their inventory. 

3.  Less manual effort to produce faster, more lucrative decisions

As a retailer and as a brand, if ordering isn’t a toss-up each week, less money needs to be allocated to manually sifting through and extrapolating data in Excel. Getting data-driven insights is a necessary process for any successful business, but it doesn’t have to be a manual and time-consuming one. In the below example, on March 27th, this brand’s most popular edible product was stocked out at a partner retailer. Brands and retailers can use AskTreez Inventory insights to identify future stockout dates, which can then be used to forecast optimal delivery dates and avoid potential lost sales.

Blog_AskTreez_Reduced Labor Costs_AskTreez Inventory insights

Utilizing the forecasting tools in AskTreez will help create streamlined processes between partners, causing both retailers and brands to spend less time on the logistics of ordering and empowering brands to manage themselves. vendor managed inventory will still require a buyer to manage budgetary constraints and other internal business decisions on behalf of the retailer, but the role will become much less stressful and more enjoyable when vendors proactively participate.

Relying on data to drive purchasing decisions instead of buyer-brand relationships will make the conversations you’re having more productive. With the tools and dashboards in AskTreez, reports can now be produced and shared automatically between select partners, allowing retailers and brands to make informed business decisions with confidence. Streamlining processes, reducing time spent on superfluous communication, and increasing efficiency around the logistics of ordering will reduce labor needs for all parties. 

If you’re powered by Treez and are interested in adding AskTreez to your account, reach out to your Customer Success Manager for details! If you’re not yet on Treez but want to join the only software ecosystem developed to power modern cannabis, click here to set up a demo.

Blog_AskTreez_Webinar CTA

 

Topics: AskTreez

Caitlin Pellas

Written by Caitlin Pellas