’We no longer have that in stock’ or ‘Sorry, we don’t know when we will next get another shipment of that’ are no longer phrases that retailers can afford to use. Overstocking and understocking products can be damaging to a retailer looking to maximise on profits.
In fact, retailers are currently facing a tidal wave of customer expectations – which can be hard to meet. The problem is, retailers today are adrift in a sea of inventory. This analogy is apt when you consider the “boat” to represent the overall production system of the business and the sea of water it sails on to be the inventory level. If the sea levels were to reduce, the “rocks” become exposed. This is dangerous for both the physical and metaphorical boat, leading to problems with the inventory system.
When it comes to the “rocks” that retailers encounter, these can be anywhere throughout the process. Be it machine changeovers taking too long, late supplier deliveries or quality issues – retailers need to be prepared to face these difficulties throughout the supply chain journey.
The retail supply chain used to be simple. From supplier to distribution centre, distribution centre to the store and store to the customer – it has barely changed in 150 years. Yet, today – retailers face a stormy journey. As consumer expectations continue to change, and rapidly – the need to fulfil these increasing demands across multiple new channels driving up inventory.
In fact, according to Gartner, 54% of retailers say that fulfilling online orders from store increases store inventory by 10%. Essentially, even the best-run retailers could be having issues with increasing inventory as they expand across channels.
However, what’s more, it’s quite likely that the inventory is covering up issues, not just with the production system, but with issues with the overall omnichannel fulfilment system. These issues can include poor sales forecasts, problematic inventory placement decisions, supplier delivery delays, missing process orchestration, data silos and inefficient manual processes.
To avoid these bumps in the supply chain and to improve the process, retailers need to implement the right technology to facilitate necessary data flows. This applies to both inside and outside of the organisation.
The best place to start is in finding out what the source of these issues is. In doing this, the inventory can then be controlled.
When it comes to inventory and visibility, a great starting point is real-time inventory visibility. This offers instant insight into stock. Think about it. It’s 11am and you’re expecting a bulk delivery, but you have no idea where it is. A real-time inventory visibility solution can help every retailer to overcome this with real-time insights that can make it possible to meet the demands of customers and planners through any channel. By understanding real-time inventory status across all your locations, you can determine the most beneficial way to use the inventory at any specific time to maximise sales and profits. This, whilst also ensuring customer satisfaction. Increased visibility over the supply chain is crucial in maintaining an updated view of inventory, regardless of the number of systems any retailer has.
We live in a more digital world than ever before. This means consumers are far less patient when going into a store when it comes to finding a certain product they are looking for. If a retail assistant were to walk over to a shelf to see if the product is still in stock, the customer might not wait. The ability to check the online systems is therefore key to giving accurate and up to date information to a customer regarding the location of an item – or alternatively, when the next shipment is due.
This doesn’t just apply to retailers. But, to the customer too. Today’s customers are no longer just going to traditional brick-and-mortar stores. They are shopping online via mobile devices, iPads and tablets. This means they expect to be able to check whether or not a certain product is in store – or if in fact, it’s stocked in a store nearby.
Whilst implementing real-time visibility into the inventory process may take time – it’s easy to understand. This is why it is important that retailers take their time to find the best solution for them.
It’s hard to stand out in a world of retail that knows no bounds. However, one thing that can make a difference is stocking the product your customer wants. Making the customer experience as seamless as possible will ensure future purchases from an individual. It’s time retailers ensure they stop saying “we don’t know” and start saying “where”, “when” and “how many” of a certain product can be found. This real-time insight is a no-brainer in increasing sales and productivity, whilst also fulfilling a customer’s needs.