3 Ways Online Inventory Visibility Drives Retail Sales
Yes, there are many more ways than three that online inventory visibility helps retailers. For now, let’s focus on three specifically that drive retail sales up. These are: Stock visibility and availability
Stock Visibility & Availability
Online inventory visibility means your customers get to see what you have. Most retailers have a basic level of online inventory visibility. At its most basic level, the site tells consumers if an item is ‘in-stock’ or not. It does not provide further detail. So how does the shopper know whether the store near them has that stock or not? In the US 63.3% of retailers show the most basic level of inventory visibility only. This level is 79.5% for the UK, 56.0% for Canada, and 72.5% for Australia. (All reference taken from the Omni-1000 Research series) Simply giving shoppers an online view to how much stock is available - drives sales. Shoppers discover that you have the items they want. This means they often choose to look no further. Therefore, your sale is locked in! Mission accomplished. How much uplift this gives you is a big question. It will vary by retail sector (footwear, fashion, health and cosmetics…), brand strength, convenience, returns policies, and so on. One retailer mentioned that inventory visibility helped them raise sales in select stores by as much as 30%. Despite these occasional home-runs, most retailers will experience a 0.5% - 5% lift. That's a lift in sales just from of adding online inventory visibility. But, its not all net new business. Part of it is cannibalization from your other channels. In other words, the customer may have purchased anyway, by walking into one of your stores. In that case, your chain would have received that sale through other means. Even if you consider cannibalization at 60% - 80% … you still have 20% - 40% of upside.
A huge advantage of order management technology is that it ties in all sources of inventory. It also monitors the inventory transactions and movements from all related systems, in real-time. This means more retailers can show detailed store by store inventory levels. This drives a sense of urgency with customers. Online inventory visibility shown at the store level can create this sense of urgency. As an example, a customer looks at your site. They find the item they want. They see that it there only 2 pair left at the store near them. Sense of urgency created. This shortage can be good, as it triggers many customers to buy-now. In effect, detailed online inventory visibility can help create that sense limited supply. For your shopper, it is a matter of 'getting it' before someone else snatches the last one. Again, mission accomplished.
Related: 4 Reasons You Need Real-Time Inventory Visibility
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In-Store Pickup: Offer Retail Discount of Not?
Just showing online inventory visibility, and that you offer buy online pickup in-store (BOPIS) services, will imrpove sales. Customers find the item they want on your site. They shopped around online. There are three retailers with similar goods, at similar price points. Yet, only one retailer of these three offers the ability to purchase now, and pickup the order in a few hours. Now you are feeding that craving for instant gratification. They want it now, so give it to them now. That seals the deal. That lets you stand out from the crowd. You are the retailer offering both a stock level and fast in-store pickup (click & collect). Congrats - you just landed the order! Is this unrealistic? Not at all. Only 29.1% of US retailers offer in-store pickup to customers, today. That is less than one third of retailers. The opportunity to catch customers this way, is now. Get your omni-channel strategy in gear before the competition does. It will let you reap the rewards. Click and collect is more widely used by retailers in the UK, with 67.0% offering the service. However, Australia stands at 25.5%, and Canada at 23.5% of retailers offering the service. Opportunities, opportunities! Just giving customers with in-store pickup (BOPIS) offering and online inventory visibility drives sales uplift. Naturally, this depends on the market and many other factors. Generally, we expect this uplift to range from 0.5% to 3%. If you are running your own estimate, consider too that there will be a cannibalization effect here. Cannibalization might be lower, because customers are considering your retail chain rather than the competition. Perhaps 40% - 70% is an appropriate expectation. If the customer does not buy from you online, then they bought from your competitor.
Online Inventory Visibility Drive Sales
Whether its from a sense of urgency, purely seeing that you have, or from the service offering that others don’t have; online inventory visibility drives sales. These are not huge numbers. You won’t revolutionize your retail chain overnight. But, in a hyper-competitive retail market, a few points of sales growth separates winners from loswers. Seriously considering an omni-channel retail strategy? Then inventory visibility is an important part of it. For help with estimating your own ROI calculation, Contact Us for help. OrderDynamics helps retailers map out your expected ROI with an advanced DOM and omni-channel strategy. Give us a call, for some quick, no pressure help. Author: Charles Dimov
is Vice President 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.