4 Reasons You Need Real-Time Inventory Visibility Today there is nothing more frustrating than shopping for an item, needing it immediately, and not finding a retailer that can tell me where to pick it up right away. Recently, I wrote a post on this very topic, on my buyers journey to finding a new leather briefcase. In another such journey, none of the retailers had serious click and collect capabilities. One passingly highlighted that they had the model I wanted, and even told me it was ‘in stock’. Well, it might have been in the morning, but by the time I got to the store, it was either sold out, the item was ‘in stock’ at the warehouse, or their information was flat-out wrong. Useful for an online order that would deliver in a few days… but without the real-time inventory visibility at store level not at all useful for my immediate need.
Real-Time Inventory Visibility vs Lost Time There is an important difference between real-time or near-real-time inventory visibility, and what most retailers seem to be showing on their ecommerce sites. Real-time inventory visibility means the retailer has a REAL Order Management System (OMS), that collects and consolidates all inventory positions for a retailer, and provides this information when required. Simply put, a light OMS (add-on module to a POS or ERP system), simply can't manage this effectively. Most retailers, like the one in my journey, are collecting an overnight inventory position reading from the Warehouse Management System (WMS), and providing this as to stocking position. Not bad in the morning, but the data becomes stale as the day progresses. By early afternoon, if the retailer is doing any reasonable volumes, the inventory visibility is out of date, and simply cannot be trusted. It's last night's view of the world! Great for online pureplay retailers, but not helpful for a true omni-channel retailer or your customers. Light order management systems are typically found as an extra module of an eCommerce system, part of some ERP systems, or a simple add-on to a POS / legacy POS system. These are the systems that will do a single pole of the WMS system. The batch data download is provided and used by that retailer – for the rest of the day. Unlike these simple systems, a robust OMS takes the WMS position, then observes all different inventory locations throughout the organisation. It tracks all the incoming and outgoing dynamic inventory positions, considers the online order, shipments, incoming inventory, in-store inventory, and gives you a complete real-time view by location. Wow. There is more to this than real-time inventory than just a batch data pull. But, why do you need this?
Why Do You Need Real-Time Inventory Visibility?
1. Show customers what you REALLY have When a shopper has an item in mind that they want to buy, the usually want it now. Let’s face it, we live in an instant gratification world. Given the option to wait for a week for those new shoes, or have it within 2 hours - which would you choose? Most of us will take the 2 hour option. Letting customers know that the item they want to order is available at the store near their home, or on their route somewhere – means they might stop in to pick it up right away. Showing how many units of an item a particular location has lets your customer know that you have exactly what they want, at a nearby store. It is not vague. Nor does it suggest that they should order it to arrive at their home or office. Rather, it tells them that they can come and get it right now. From the retailers perspective it means you lock in the sale immediately. And that you are able to turn over the inventory right away. Better yet, that inventory is turning over in your stores – which means you will limit the pressure to discount at the end of season. Plus, about 58% of shoppers buy more products when they come in to do a pickup. That means, just getting them to drop in is likely to increase your sales!
2. Avoids a BAD Customer Experience Customers these days do their research online before making a purchase. They see the item they want, and maybe even see that your system shows it is ‘in-stock’. During their errands, they drop in to a nearby location, and find that the item is out of stock. Technically, you can argue that the item was in stock at some locations, and that it was definitely in stock at the warehouse. Maybe the item might even have been in stock first thing in the morning, but was purchased. Great. Does your customer care? No. More importantly, this just created a bad customer experience, regardless of the reason. While they leave in frustration, are they likely to give you a second chance with so many competitors vying for that customer’s business?
3. Promotes a Positive Brand Experience With a lack of real-time inventory visibility, more of your customers will encounter the out of stock situation, when they come in to purchase. Research shows that 8.0% of all merchandise is out-of-stock at any given time. If any store location has about 4,000 active customers who purchase in a year, that might be 320 frustrated customers who got the ‘in-stock’ notice on your website, but did not find the inventory at the store. By the way, that’s PER LOCATION! With that many frustrated customers walking out without a purchase – what is the erosion impact on your retail brand? Over time, and a growing number of frustrated buying journeys, your retail brand becomes known for not providing the right information online (erosion of trust), or always being out of stock.
4. Customers Expectations as Mobile Shopping Grows Just about everyone has a smart phone. So, even during the in-shopping-mall buyers journey, customers are checking your merchandise and availability, while they shop. Millennial shoppers expect retailers to have the back-end technology to tell them whether the location in this very mall, has the item they want. If they are actively shopping, and your location has the stigma of ‘old inventory data’ then the Millennial shopper (for one) will not trust your brand enough to walk over to your store. However, with real-time inventory visibility, EVEN if the local store does not have it, you can make the commitment to get it to that store within 2 hours. This is where real-time inventory visibility shows its true importance. What you may want to ask yourself is whether this mobile shopping trend is likely to continue, or will merely be a passing fad. Naturally, I jest. All readers should realize that mobile shopping is only likely to grow in the coming years. That means, more shoppers want to order the item they want, and walk in to collect it right-away. Make sure you are ready to help make that journey happen!
So Do I NEED Real-Time Inventory Visibility? We reviewed four good reasons why you need real-time inventory visibility. Yes, most retailers are showing some level of stocking information today. However, most of these are based on single pull batch information, based on yesterday’s inventory closing positions. That is just NOT good enough for today's shopper. That's certainly NOT going to be enough to keep the Millennial and Generation Z shopper engaged, and coming back to your brand. As mobile shopping starts to grow, now is the time to make sure you are ready for the future. A robust order management system gets you started on the right path to deliver. Take stock … or you will be out of stock in more ways than one! Author: Charles Dimov is Director of Marketing at OrderDynamics. Charles has 21+ years experience in Marketing, Sales and Management across various IT and Technology businesses. Previous roles include Chief of Staff, Director Product Marketing, and Director Sales. Charles has held roles in brand name firms like IBM, Ericsson, HP, ADP, and OrderDynamics. Related: Back to List View