Inventory Visibility – Who Needs It? Editor’s Note: This post was originally published in November 2016 and has been updated for freshness, accuracy, and comprehensiveness. We are a retailer with 25 stores in addition to a great online ecommerce site. Things are working well. Over 15% of our business is omni-channel retail. Things are good. Why would I need to also add inventory visibility to my growing list of needs? If this even remotely describes you, then read on. Here is why online inventory visibility is something that customers are coming to expect from retailers. Yet in recent years, this has become an element that too many retailers have stepped away from providing. Let's cover some bases...
What is Inventory Visibility? As the topic describes, inventory visibility is about showing your clients and company associates what you have in stock. As well as where, and how to get it if your client wants it. The first step on this journey is to have the systems that know where your stock of goods are located. But it goes beyond simple inventory management at your distribution center (DC). Yes, your systems need to know about the DC inventory But it also has to make your store inventory visible, as well as any other locations such as displays, stock rooms, at third party logistics provider (3PL), and even at the drop shipper, if you are using one.
If the Customer Doesn’t See it … Does it Really Exist? To run an effective omni-channel business you need to show your clients what you have, and where it is. This permeates the supply chain. You need to know inventory levels at all your locations. Perhaps even more importantly, you need accurate inventory visibility and levels. After all, the whole point of omni-channel retail is to give your customers options. Inventory visibility is about showing clients where you have stock of an item at any of your locations. That way, if a customer wants to order online, and have it shipped to them, great. Alternatively, if they don’t want to pay the shipping fees, they have choices here too. They can opt to pick up their purchase directly from one of your stores (BOPIS). In this regard, real-time inventory visibility is a major play. If the customer sees that the store location near them has stock, that's great. It means they have the ability to fulfill. The benefit of inventory visibility here is that the customer may choose to drop in pick up the item directly. Bingo! The cost of shipping - saved, with a chance of upselling.
Why is the Pick-up Important? Recent ICSC research on consumer behavior shows the 69% of customers coming in to a store to pick up an order, actually purchased more goods! This was further supported by the Rise of the Superconsumer research that showed that 53% of Click and Collect Superconsumer buy additional items when in store to pick up an order. This is the holy grail of omni-channel retail. Most of all, this gives the brick and mortar centric retail industry a chance to compete effectively with online pure-play companies like Amazon. An interesting side note is that many pureplays are opening their own bricks and mortar stores. Amazon being among the most notable. Giving customers the option to pick up their goods, gives them a sense of control. It gives them instant gratification, and the ability to save on shipping and handling. Don't forget too that it is an opportunity to interact and ask questions of your associates.
It All Starts With… Remember, that this entire journey starts with your move to improve Inventory Visibility. If your system cannot aggregate your entire inventory pool, as well as provide a feed to show where all the inventory resides – you have a problem. It isn't just about inventory tracking. It's about pooling, segmenting, and getting the big picture. Only 55% of retailers show their customers where their product inventory is located, while also being able to transfer inventory across channels. (Gartner). Therefore, if you want a leg up over the competition – act now and show your stock positions. Even if only 10% of your clients chose to BOPIS, you can bump sales by 6.9% of your transactions (69% of 10%). What would that look like if 20% or 30% of your customers chose to pickup in-store?
A Key Delivery of Your OMS A solid distributed order management system (DOM / OMS) gives you inventory visibility as a key function. Start using it. Today, it gives you a competitive edge. If inventory visibility is not part of your system’s capabilities, start looking for a point solution that fixes your problem. Still not sure if this is something you should look at? Check out our Inventory Visibility Brief for more info. Omni-channel retail is growing around the world, in the retail industry. Giving customers inventory visibility is your first step. The bus is pulling out of the station. Make sure you are in the driver's seat, rather than left standing in the rain. Editor’s Note: This post was originally published in November 2016 and has been updated for freshness, accuracy, and comprehensiveness. Author: Charles Dimov was VP of Marketing at OrderDynamics. Charles has 23 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.Back to List View