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4 Tips For Hoteliers to Manage Retail Inventory Better

by
Hotel Tech Report
5 days ago

Managing inventory for retail outlets isn't always second nature for hoteliers. It's a bit different than managing room inventory...after all, you can’t swap out your rooms for better ones! There are also two big differences in optimizing the retail product mix for peak profitability: what's on the shelves directly impacts how much product is sold, and what's kept in inventory (and for how long) affects overall profitability. The main objective for inventory management technology is to stock the items that guests want, and keep just the right amount of those items in stock to meet demand -- all without over ordering and leaving too much money sitting on the shelves (especially important for perishable goods). When deployed properly, inventory management can also help with: Efficient use of limited storage. Most hotels are starved for space. An inventory management system keeps you're ordering streamlined and minimizes carrying costs or wastage from spoiled inventory.  Choosing winners and losers. As we noted above, the main objective is to get the right items on your shelves -- and keep them there. Inventory management technology separates the winners from the losers, so you stay streamlined on stocking inventory.  Promotions and other marketing activities. The technology can guide you in creating promotions centered on high-profit items. Start practicing healthy inventory habits: here are 6 tips to help you run your hotel’s retail operation like Amazon. For this article, we'll be using Impulsify as our reference vendor to illustrate the functionality that helps build these habits quickly.  Impulsify's point of sale pantry management solution automates highly profitable lobby retail outlets that grow incremental revenue.   #1: Know the costs of your inventory Successful retail inventory management starts with a solid foundation. There are three key terms to understand: Ordering costs. This is the amount of money that you spend on ordering items from vendors, as well as the labor cost associated with making these orders. That second bit is often overlooked! If your staff spends hours each week counting inventory and making orders, it's going to cost you a lot more money than just the goods themselves! Shortage costs. This is the amount of money that you lose from having items out of stock, as well as the opportunity costs of tying up cash in inventory. For example, running out of sunscreen in the middle of summer would lead to lost revenue at your lobby store!  Carrying costs. This is the cost of storing your inventory. Each square foot of space has a sunk cost; you have to carry that cost for each item in your inventory. Once you get a handle on these three costs, you’ll be well-positioned to optimize your retail operation. With a point of sale solution like Impulsify your hotel will have real time visibility into these key metrics to make better decisions around merchandising and stocking.   #2: Practice FIFO Healthy inventory habits extend to ensuring the health of your guests. Don’t underestimate the importance of using FIFO, or First In First Out, when managing inventory. FIFO means that you won’t waste money on throw away expired goods. This means that staff will rotate stock, and put the fresh items behind the older ones when restocking shelves.  FIFO also has a side benefit: it actually makes for more accurate inventory counts. Inventory management solutions can trigger alerts for expired goods based on shelf life which saves time. When you train your staff to always rotate and stock from the back, they take more time with the process. This leads to more consistency in both how items are stocked and how inventory is counted.   #3: Be strategic about your SKUs “SKU” is an acronym for Stock Keeping Unit, the global standard in product management. Each product has its own unique SKU, like a fingerprint, so that individual products can be accurately tracked. Each SKU takes up space on the shelf, and a strategic inventory manager will analyze the carrying cost of each SKU to determine whether it's worth it. Unless there’s a reason to keep a product stocked, such as certain necessities, underperforming SKUs would be discontinued. In an ideal world, only high-performing SKUs would remain. Smart SKU management also means that you make bulk orders wherever possible. There’s a cost savings to ordering in bulk, so hoteliers should strive to balance those savings with the carrying costs of storing inventory in the back of the house.   #4: Use data to shape product mix and placement Each transaction provides a window into a guest’s mindset; from the time of day to the items purchased to the guest’s length of stay, the metadata is an important piece of the retail puzzle. This information identifies your winners and losers, which then keeps your inventory tight and focused on your guests’ actual needs. Any unexpected discoveries should influence your product mix -- and how it’s displayed on the shelves. A vendor like Impulsify has a massive database of transactions that helps with these product and placement decisions. This database of over 5 million helps it make recommendations about what to stock (and how to display it). That way, you benefit from industry-wide benchmarks and won’t have to only rely on instinct or habit to decide what guests prefer. It’s like having a dedicated store manager -- but without the labor cost.

How to run your hotel retail like Amazon with Impulsify

by
Hotel Tech Report
2 months ago

In 2016, Amazon unleashed a retail revolution: a store without cashiers called Amazon Go. The store uses RFID to automatically calculate what a shopper owes as they leave the store. Without cashiers, the experience is more convenient and far speedier. Amazon Go has now extended its cashier-less experience to 11 stores in 3 cities. As more consumers experience these types of seamless self-serve solutions, from grocery stores to CIBO Express markets at airports, they expect more control and convenience across other interactions. Hotels are beginning to feature these types of experiences in their lobby stores, bringing this convenience and speed to hotel guests.   For hotels, the lobby store is a triple threat: it’s an amenity that guests love, it doesn’t cost too much to implement, and it builds a reliable incremental revenue stream. And, with the right technology like Impulsify, the store doesn’t have to add unnecessary layers of complexity to hotel operations.   What Impulsify does: intelligent retailing tech One of the leaders in hotel pantry management technology for hotels is Impulsify. Aptly named, the technology encourages “impulse buys” with its guest-facing self-service kiosk product - Shop Pop. On the back end, the system simplifies inventory management, ensuring that adding a lobby pantry won’t also add an unreasonable burden on staff. Together, Impulsify is a powerful system for hotel gift shops, pantries, and grab-and-go markets.     Impulsify’s ImpulsePoint technology has a few different features that form its approach to intelligent retailing. There’s both the hardware that guests and staff interact with on a daily basis, as well as software running in the background that optimizes inventory for a specific hotel’s situation. Across both, the experience must be flawless, with intuitive screens that are simple and straightforward to use.   Impulsify powered hotel retail experience With Impulsify hoteliers get: Automated inventory management: Staff use a barcode scanner and a portable tablet to track inventory. By avoiding manual methods, such as pen and paper transferred to a spreadsheet, you reduce errors and increase productivity. Impulsify enables guests to easily grab products from your hotel lobby store and notifies your team when supplies are low.  The platform delivers data that helps your team optimize the products that you’re selling for margin and volume to take the guesswork out of your retail operation. Self-serve kiosks: The Shop Pop guest-facing kiosks eliminate the need for guests to stand in line for payment. Guests select their own items, scan each, and then charge either directly to the room or on a card -- all without staff intervention. Guests can select items at their own pace, and avoid standing in line to pay. Overall, a better experience for everyone: front desk can tend to other needs and guests enjoy speedier service. Impulsify creates a frictionless retail buying experience for guests which means that they buy more from your shop all the while improving their experience on property. Data-driven decisions: Impulsify delivers real time data to help you optimize inventory selection in order to maximize margins and reduce waste. When you start with Impulsify you will see which products are moving off the shelves and which aren’t so you can optimize your selection. The platform makes it easier than ever to experiment with new product assortments and quickly identify top money-makers. Impulsify can even make recommendations about which products to stock your shelves with because they have data from millions of transactions in their hotel ecosystem.   Who Impulsify is for: Hotels of all sizes Given the structure of the category, Impulsify’s core segment is select service hotels with limited on-site amenities. Since restaurants in select service hotels may offer a smaller menu with shorter operating hours than a restaurant in a full-service hotel, these properties benefit from a more tightly-operated “grab and go” market or lobby pantry. Impulsify also works well in the full-service segment, as intelligent retailing technology can be used by any hotel that has a store, gift shop, restaurant or grab and go. For hotels that currently use manual processes to manage and stock inventory, the impact of Impulsify’s automated, data-driven platform can be significant. Given that Impulsify can drive a project from design to grand opening, larger resorts could even engage Impulsify to expand retail offerings in areas of the property that may be more remote. Verified product review on Hotel Tech Report (Impulsify reviews)   5 reasons hoteliers love Impulsify   1. Intelligent strategies for assortment and merchandising. Inventory management is only one part of the equation. The true value of Impulsify comes from how it uses location, guest profiles, hotel size, and hotel type to make smart recommendations about what to stock and how to display it on your shelves. To date, Impulsify has processed over 5 million transactions, giving it a growing database of information so you won't have to rely on instinct or habit to decide what guests prefer. It's like having a 24/7 store manager without the added cost! 2.  Self-pay = PMS integration. The self-service kiosk means that guests don’t have to stand in line to pay. They can pay with a card, or charge it to a room. The system integrates with your property management system  to pull all purchases to the guest’s folio -- a major benefit to the guest experience. With self-pay, you can also place a kiosk in different areas of a property. Perhaps your golf resort would like to include a “grab and go” pantry in another location away from the clubhouse; self-pay makes it all work. 3. Full design services. If your property is undergoing renovations, you may already have an idea of what you’re looking for. Or, you may want to consider using Impulsify’s specialized knowledge base to design the ideal layout for your hotel’s store. Existing stores can also be renovated to better leverage Impulsify’s novel approach to intelligent retailing in hotels. The design services include renderings, elevations, and ADA-compliant construction drawings, as well as project management for the entire process. 4. Automated shopping lists by vendor. Eliminate tedious manual ordering with Impulsify’s automated shopping lists. Once your hotel implements Impulsify, the system monitors sales to automatically build order sheets. This is an incredible time savings, as staff no longer has to be trained on which vendor provides which product. The automation also prevents inaccurate ordering, ensuring that your hotel either holds excessive inventory nor runs out of things that guests want.    5. Planogramming. 5 in 6 Americans admit to impulse buys -- and a planogram likely contributed to these purchases. A planogram is a diagram that specifies where products should be placed to optimize both store space and shelf layout. A planogram uses popularity, preference, and relevancy to place products strategically so that consumers find what they need -- and, of course, make more impulse buys (such as those candy bars by the grocery store checkout)! Planograms also keeps a store organized, which appeals to consumers and makes re-stocking much faster. Most hotels could never afford a full time planogrammer (up to $47,000 a year), so Impulsify leverages its database of hotel purchases to create data backed planogram models for its hotel partners.   Impulsify pricing Pricing varies according to a property’s needs, such as: Number of self-service kiosks Whether or not you need design services Size of the space, as far as number of SKUs managed Number of your properties using the Impulsify technology Length of contract Monthly vs annual billing Based on those factors, you can expect to pay a one-time implementation fee, as well as a flat monthly fee for the software (ranges from $199-249 depending on billing cycle), per the pricing below. Each subscription comes with two USB scanners, ongoing training and support, and account setup. On the hardware side, Impulsify charges some upgrades related to enabling self-pay, as well as for product scanners, kiosk units, and retail sales data analysis to benchmark your retail performance.  Get a custom Impuslify price quote for your hotel here   Conclusions: Should you consider Impulsify? Incremental revenue is a hotelier’s best friend. If you have an existing store, there’s the potential for capturing even more revenue. If you're building a new property, or considering adding a “grab and go” store to your hotel, Impulsify can help you achieve your revenue targets. Results from a study conducted by Impulsify with 12 select-service hotel clients using the technology are astounding: 49% increase in revenue, 220% increase in profit, 62% profit margins.  The results are so good that Impulsify has an ROI guarantee. Also: 20 global chains can’t be wrong! That’s the number of larger brands already using Impulsify to optimize inventories to match shifting guest preferences. Once you add in the self-serve kiosks and mobile inventory management, Impulsify is quite appealing. It reduces the burden on staff while also optimizing profitability of on-property retail. Not to mention a big boost to guest satisfaction. Just like Amazon enabling frictionless checkouts for its customers -- and earning loyalty in the process -- hotels can make a visible impact on its guest experience with a similar approach to giving guests control and convenience.   Read Impulsify reviews from verified hoteliers like you

Founded by a rockstar restauranteur and fueled by Hyatt's legacy, Tock is taking Opentable head on

by
Jordan Hollander
3 months ago

Entrepeneur Nick Kokonas is no stranger to the hospitality business.  Mr. Kokonas is arguably at the top of the food chain in what is widely regarded as America's #1 'foodie' city, Chicago.  Nick is the visionary behind iconic hospitality concepts such as Next, Alinea and The Aviary.  If you haven't experienced these concepts - they alone warrant a trip to the Windy City.  If you decide to go check out his luxury cocktail lounge concept The Aviary, for example, you'll need to book ahead of time since they fill up months in advance.  Given the massive demand for his restaurants and limited capacity of physical space Kokonas realized that cancellations on platforms like Opentable were extremely costly to his businesses.  Like many great entrepreneurs, Kokonas set out to solve a problem that was personal to him and started pre-selling experiences at his restaurants and bars.  In a stroke of genius, Kokonas had figured out how to turn costly cancellations into his most profitable reservations - Tock was born and his restauranteur friends couldn't get enough of it. As disruptive innovation often plays out, Kokonas started in a relatively niche market: ultra luxury hospitality concepts.  Opentable (owned by Booking) wasn't threatened as it wasn't their core market.  Tock continued to broaden it's feature set building rich guest profiles, a dynamic CRM and offering traditional reservation functionality for their partners and is now on pace to dethrone the behemoth that no longer can afford to look the other way.  Today Tock's product is simply better than Opentable, plain and simple.     Since it's 2014 founding Tock has processed $290M of prepaid transactions and millions of reservations in 18 countries around the world.  The company is now helping not just restaurants but hotels, nightlife venues, wineries and even museums to create, market and sell incredible experiences to guests. Key to Tock's success, Kokonas leveraged his network to secure financing for Tock from top venture capitalists like Pritzker Group Venture Capital - funded by the family behind Hyatt and Two Roads Hospitality.  Pritzker VC has an extremely entrepeneur-centric approach to investing given it's evergreen fund structure and has a clear competitive advantage in the hospitality market given the Pritzker family legacy.   Tock founder and rockstar restauranteur Nick Kokonas   Pritzker VC has had some major exits in the travel and hospitality space such as Single Platform and Tickets Now.  The firm also has live investments in: Shiftgig (an hourly labor recruitment marketplace), SpotHero (a parking lot management solutions company), Upserve (restaurant point of sale solutions) and Eved (B2B payments for the meetings and events industry). To learn more about Tock, we sat down with Pritzker Group Venture Capital's Justin Malina to learn about Pritzker Group's perspective on venture investing in the hospitality space, cutting edge trends in the market and why he's excited about the journey ahead for Tock.  Justin is truly representative of Pritzker's hands on approach as he was recruited from one of their portfolio companies.  Justin is not your typical armchair investor - he's held key roles at massively successful startups such as Sittercity and Instacart so he brings an extremely unique perspective that blends venture investing and startup operations strategy.     Pritzker VC's Justin Malina   Tell us about your personal journey from working in tech startups to become a venture capitalist My first job out of school was in investment banking, though I knew that wasn't something I wanted to do for the rest of my career. Most of my colleagues left after 2 - 3 years for private equity, but I was interested in working with high-growth companies and thought that working in venture capital or at a startup would be a better path for me personally. I started networking with folks in the Chicago tech ecosystem and a lot of the feedback I received was to go join a startup and gain operating experience vs. jumping right into VC . I took that advice and spent several years as an operator at a couple of consumer tech companies, Sittercity (also a PGVC portfolio company) and Instacart, where I focused on operations and strategy. While at Instacart I learned of a potential opportunity to join the PGVC team. It was tough decision to leave a company on a rocketship, but ultimately I wanted to get some experience on the other side of the table as well as broader exposure to the Chicago tech ecosystem. I also knew that opportunities to break into venture were very rare, especially in the smaller tech ecosystems outside of the Bay Area, and I wanted to take advantage of this unique learning opportunity.   What makes Pritzker Group Venture Capital unique? Unlike the typical venture firm, PGVC is an evergreen fund with no LPs. We are solely backed by J.B. and Tony Pritzker and therefore have more flexibility in terms of how we invest. We take a long-term view without any sort of artificial exit timeframes and our check size can range from $500k to $50M. Our investment sweet spot, however, is the Series A/B stage with a check size of $3M - $8M. Ultimately, our goal is to deploy $15M - $20M across the investment life cycle of our most successful companies. The thematic areas we invest in are consumer, enterprise, digital health and a category we call emerging tech (e.g., IoT, AR/VR, drones). We are a national firm, though our core geographies are Chicago, Los Angeles and New York City. We believe the best form of capital is supporting our companies in generating revenue and therefore, we’ve invested in resources such as venture partners, sales bootcamps and a network of customers / partners to help drive growth.   What series investment did you participate in? We invested in the Series A, which was a $7.5M round led by Origin Ventures.   How is Tock disrupting the restaurant management software market? Tock's value prop to businesses is that its software enables them to offer unique experiences (e.g., tasting menus, special tables, standard reservations), exceptional hospitality and reduce no-shows, all of which ultimately drives sales. For guests, Tock allows them to book the best culinary experiences at restaurants, bars, wineries, pop-ups and events globally. The big vision for the company is to reimagine how reservation-based businesses connect with their customers. Tock's product is a modern SaaS platform that enables a) advanced CRM functionality, b) custom, high-margin upsell experiences and c) prepaid bookings. Significantly, the company's cloud-based platform offers superior functionality relative to OpenTable's legacy tech. Tock offers three pricing editions of its software, ranging from a purely metered plan (% of prepayments, no monthly SaaS fee) to a pure SaaS offering. The company initially targeted high-end restaurants that offered only paid reservations, but Tock has since expanded its focus to typical restaurants that offer free reservations.   Read why hoteliers rate Tock the #1 restaurant software on Hotel Tech Report   How did you come across the investment? Matt McCall led the deal for PGVC and we had an opportunity to invest based on his relationship with CEO Nick Kokonas.   What's one piece of advice you have for hotel tech entrepreneurs when raising capital? In general I'd say be sure to do your homework on the firms / investors you're pitching. Look at the companies they've invested in, the boards they sit on and the stage at which they typically invest. This will help you to be efficient with your time, ensuring that you're focused on the right potential partners.   It's helpful to get to know our firm (or any firm for that matter) before you start actively fundraising. Ideally we prefer to start building relationships with entrepreneurs early and track progress over time, which helps our committee get comfort with the team and ultimately the investment opportunity.   How do you think the hotel technology space will change over the next 5-years? I think we will increasingly see hospitality businesses look to differentiate themselves through leveraging data, which will allow them to offer users more personalized experiences. This is what Tock is doing with its built-in CRM. For example, a guest that has visited a restaurant with multiple locations can easily be identified when visiting a new location. This gives the business an opportunity to delight guests through better communication and hospitality.   People often say that hotels are a bit slow to adopt technology.  Do you agree? While that may have been true historically, I think that is quickly changing as these business look for new ways to differentiate their brands and ultimately drive revenues. I think Airbnb in particular has compelled hotels to increase their investments in technology as they compete for the loyalty of mobile-first, tech-savvy millennial customers. In the past, hotels may have been afraid to experiment and negatively impact the customer experience, but I think they're realizing that they're going to need to innovate to remain competitive in today's environment.   What's the most suprising thing that you found when performing due dilligence on the hospitality tech market? Although businesses are increasingly experimenting with and adopting new technologies, there is still a surprising amount of legacy technology in use today. OpenTable is a great example of that--its Electronic Reservation Book software was originally built in 1998.   If you were leaving venture capital tomorrow to start a hotel technology company - what would it be and why? Personally my background / expertise is mostly in consumer tech, coming from Sittercity and Instacart, so it would likely be something guest-facing. Going back to my point earlier on leveraging data, I think there are a lot of opportunities to use data to provide guests with more personalized experiences. Though I think Tock is pretty well-positioned to do this for hotels in addition to restaurants, so I don't think I'd want to try and compete with them.   What is the most interesting or surprising thing that you've learned from investing in hotel tech? There are so many companies tackling problems in innovative ways that I never would have thought about. For example, one of our portfolio companies, Journera, is working to improve the travel experience through building a data exchange for travel providers. The complexities of competitor relationships in the space make this a difficult problem to solve, but we believe this team has the industry knowledge, relationships and proven track record needed to convince travel leaders to buy-in.   What is the best book you've read lately? I'm currently reading Bad Blood and I'm fascinated by the history of Theranos. It provides an interesting perspective on why the "move fast and break things" mantra isn't always the right approach. I think it also underscores the importance of always asking the hard questions and trusting your instincts   What is your favorite podcast It's hard to choose a favorite, but the one I listen to almost daily is NPR's Up First. It's short (less than 15 minutes) but gives me a great rundown of the news on my walk to work.   What is one thing that most people don't know about you? Most people don't know that I participated in the National Spelling Bee in 8th grade and was on ESPN. So I've always been sort of a nerd.