FAQ: Store Inventory Visibility
Inventory visibility is a fundamental part of the omni-channel retail equation. Virtually all of today’s consumers use digital channels as their first step to research products they want to buy. Whether on mobile, tablet, desktop, or laptop. It is easier than ever for consumers to browse retailers' offerings. If one retailer does not have a product a consumer wants, another competitor is likely to offer an alternative. Beyond just product selection, inventory availability may also play a factor. When one retailer is out of stock of an item, another is all too eager to service the customer with their goods. In today's online environment, enterprise-wide inventory visibility is a critical first step to dominate the retail space. In addition, store inventory visibility is a solid differentiator. Today, only 4.1% of retailers show a detailed level of store inventory visibility. Store visibility is an additional opportunity that many retailers miss. As many consumers have time sensitivity around their purchases without knowledge that a product is available for pickup, the consumer may look elsewhere. On the theme of store inventory visibility, this post reviews several common customer questions. In fact, the questions below are taken directly from Google's query stream. These are several frequently asked questions (FAQ) customers ask when they search for distributed order management.
Q: What is Real-Time Inventory Visibility? Firstly, inventory visibility refers to showing a retailer's overall stock levels. This is for the retail associates (call center, in-store staff...), and for consumers online. On the other hand, store inventory visibility specifically speaks to the stocking levels of individual store locations. Advanced distributed order management systems (DOM) provide this level of acuity. Not only is the warehouse stock level displayed, but the system can provide a view down to the store level, and even down to the shelf level in a store. The real-time component refers to the DOM that aggregates all the inventory positions and changes in real-time. Real-time will be as close to real-time as the weakest link in the supply chain technology stack. So, if the warehouse data is only updated and pushed out every 15 minutes, then that might define the refresh cycle. In our case, the DOM aggregates all inventory data - from the: Warehouse Management System (WMS)
Some POS systems with store inventory data
The Consequence of not Offering Real-Time Inventory Visibility The consequence of not offering real-time data is that consumers may think that inventory is available when in fact it is not. This can lead to a poor consumer experience should the consumer place an order for an item to be fulfilled either in the store or to be shipped to the consumers home, only to receive a phone call from customer service to explain that there was a data error. The inventory that they thought was available was in fact already spoken for by another consumer. Consider too, that there are real-time transactions taking place all day. These affect inventory positions as well. These include: In-store sales (POS system)
Online orders (E-commerce: Episerver, Salesforce, BigCommerce, Shopify Plus...)
Online marketplace transactions (Amazon, eBay, Walmart, Jet, Rakuten...) For more about this read: 4 Reasons You Need Real-Time Inventory Visibility
3 Ways Online Inventory Visibility Drives Retail Sales
Q: Why do Retailers Need Safety Stock? Safety stock is merchandise expressly held back from being shown online. In effect, retailers show inventory levels close to what they have but do NOT show all the stock. An important part of inventory management is using safety stock to ensure that certain locations don't have all their merchandise sold through one channel. Sold-out stock creates a negative perception of the retail operation and brand. Safety stock also helps to account for scenario’s where the actual inventory may be available, however it is not saleable to the consumer. There could be a variety of reasons why this happens. The reasons can include such scenario’s as the product or good was damaged, the packaging is missing or someone stole the merchandise. This is essential to show store inventory visibility online. It forms a core part of omni-channel retailing. After all, it lets customers know the goods available for sale at any given location. But, a brand works hard at its demand planning and allocation. As such, a retailer may want its stores to have at least a few versions of the latest merchandise. To save a few for display and for in-store ONLY purchases. Given that customers that purchase goods in-store, often purchase more merchandise - retailers want to encourage in-store visits. Boosting foot traffic can be good for the entire business and retail ecosystem. Find more depth on safety stock in: Retail Marketing Stunts and In-Store Safety Stock
What Exactly is Dynamic Inventory Visibility?
Q: Should Merchants Provide Store Inventory Visibility? YES. If you can - then DEFINITELY provide customers with store inventory visibility. Doing this lets customers know what you have at the locations near them. This is good because it promotes your brand in their mind. It also encourages them to come to your store to browse and shop. Another important aspect is that it leaves them with the sense that they can count on your brand to provide the information they want. If they had just come in to your store, when you are out of stock (OOS) on an item, then this will lead to disappointment. It is a missed brand promise. If the customer checks online and you are OOS, then at least they saved time by not dropping in. On the other hand, if they check and the item is in stock, but it is down to the last two in-store - now you have a sense of urgency. Ultimately, giving the customer more information can seem risky. But, doing it will drive more traffic to your stores, and will improve your brand image. This is especially true now. The Omni-2000 research found that only 4.1% of retailers provide this level of information online. It is an opportunity to differentiate, and reap the rewards - unlike your competitors!
Q: Explain Dynamic Inventory Visibility Dynamic inventory visibility lets retailers choose what inventory is shown for different geographic regions. This is an interesting form of store inventory visibility because it helps retailers focus on certain regions with high margin product. Think of a retailer with stores and warehouses concentrated in a western geography. In the west, it makes sense to allow all customers to see the full breadth of inventory. But for online customers in the eastern region, there probably is a high cost to shipping goods to fulfill those orders. As such, the retailer prefers NOT to have customers in the east order low margin items. If they do so, the retailer may end up losing money on every order shipped. At this point, the retailer could stop selling to the eastern region altogether. It is an option, but not an attractive one. By using dynamic inventory visibility, the retailer can segment their stock of merchandise. In this case, they would segment by high margin products and low margin goods. Coupling an advanced DOM with a good e-commerce engine, the retailer can now show ONLY high margin goods to the eastern shoppers. That way, when they place an order, it is more likely to be profitable, even after shipping charges. For the western clients where an in-store pickup and lower shipping fees exist, the full range of product inventory is available. A further discussion is available at: What Exactly is Dynamic Inventory Visibility?
Are Dynamic and Real-Time Inventory Visibility Different?
Q: How Does Inventory Virtualization Work? Inventory virtualization otherwise known as dynamic inventory or inventory segmentation is critical for retailers that sell through multiple channels. Special consideration and attention need to be placed on balancing potential conflicts between the online channel and foot traffic. For example, a retailer may be offering a product online which happens to have a very high sales velocity in a particular store. If there are only a few items left in-store and no replenishment is in sight, there is a good possibility that an online consumer buys the last items. This then leaves the store vulnerable to a poor customer experience. There is a great likelihood that a customer will walk into the store to make a purchase. After all, the SKU was fast moving and now the retailer has missed an opportunity to have a face to face interaction with a customer. This missed opportunity is even worse because customers buy in-store are more likely to make additional purchases than online consumers. In addition, imagine the customers' sentiment when they realize that they drove all the way to the store only to realize that an online consumer purchased the merchandise just prior to their arrival. Inventory virtualization is critical to any retailer offering a true omni-channel experience.
Further Questions If you have a further question about store inventory visibility, or any other retail/order management related question - please send us a note to email@example.com. We will get back to you with an answer as soon as we can... and it might even inspire our next blog post! Author: James McBain is Director of Pre-Sales. He has 17+ years of experience in Sales and Account Management. Previous roles include: Director of Account Management, Strategic Account Manager, and Client Manager. James has held roles in brand name firms like Compuware, IBM, Scotiabank, and OrderDynamics. He has a passion for disruptive technologies that evolve how businesses currently operate. Back to List View