The Retail Inventory Imperative: Store Inventory Accuracy
While there’s no doubt that omnichannel fulfillment is important for modern retailers, it also introduces new risks as stores become a more integral part of a retailer's omnichannel fulfillment strategy. While lost sales are an obvious risk, there is another: the risk of disappointing customers. If a retailer promises an online customer that an order will be ready for pickup at a specific time at a local store, the customer expects it to be ready. If it is not, the customer may feel frustrated, and disappointed. In today's ultra-competitive market, that can mean lost business and damage to your brand reputation. In fact, Forrester Research finds that poor customer service translates to an estimated $62 billion in abandoned and lost sales in the U.S. each year.
High operational execution can help build superior brand loyalty, while low performance can drive customers away. With omnichannel fulfillment, store operations are critical to ensure customer promises are met.
However, this is easier said than done, particularly in the area of store inventory management, which is the foundation of the omnichannel fulfillment experience. Stores must become experts at accurately managing store inventory, as it is no longer just earmarked for that store – it is now available for sale across many channels.
Retail stores have traditionally struggled at accurately tracking inventory. That’s because of the complexity of stores, where everything is unpacked and individually displayed and potentially hundreds of people have access to each item and can move (or remove) them with little obviation. While the chaos of inventory in a particular store might cause headaches and lead to some shrinkage and inefficiency losses, historically, those affected were limited to the individual store’s customers. But the world has changed, and now a significant part of retailer’s customer experience is dependent upon promises being made that an item is available in the store for pickup or same-day delivery.
With omnichannel retail, store inventory availability is exposed to any of a retailer's sales channels through tools like global inventory visibility and available to commerce engines. The users of those sales channels – like customers ordering online or associates in the contact center – assume that published inventory availability information is accurate and that the item will be there when the customer comes to pick it up. The challenge lies in improving each store's ability to accurately manage inventory, so that information fed to global inventory visibility engines is increasingly accurate. In turn, this improves the accuracy of availability information when a customer or sales associate checks a store’s in-store inventory availability online before completing a purchase.
There are essential operational enhancements retailers can make to improve store inventory accuracy: store associate enablement and store inventory automation.
Improving How Store Associates Manage Inventory
Store associates are at the front lines of managing store inventory. Their jobs are growing more complex every day as store fulfillment needs increase. A baseline operational enhancement that retailers can make is providing store associates with applications that simplify, expedite and refine their store inventory management work.
By adding mobile-based guided inventory management capabilities to store operations, store associates will be better equipped with the information and tools that accelerate their inventory management work, improving the timeliness of inventory updates. Further, with a seamless process for managing inventory updates, multiple error-prone data entry steps are eliminated, helping to significantly improve inventory accuracy.
Applications like Manhattan Store Inventory help store teams improve store inventory accuracy, thus improving sales and reducing out-of-stock risks. Mobile receiving and inventory management capabilities designed for store associates provide guidance and data updates for managing inventory end to end, including store replenishment, site-to-store orders, pullbacks and transfers, whether by load, case, carton or item. Also, real-time management of ad-hoc inventory adjustments, like handling damage and shrinkage, helps to improve global inventory accuracy by managing real-time inventory dispositions. But mobile inventory management is just the start.
Automating Store Inventory Tracking and Updates
While helping store teams better manage in-store inventory can go a long way in improving accuracy, fully automating store inventory tracking using IoT solutions like RFID takes that to the next level. Auburn University's RFID Lab found that when retailers make store inventory available with RFID tags, store inventory accuracy rises above 99 percent, whereas traditional store inventory accuracy is typically below 70 percent.
Manhattan Order Management and Store Inventory work with RFID readers and solutions, like Zebra SmartLens, to automatically get information from RFID-tagged items in the store when they move. When an item moves into, out of or around the store, inventory status is updated to global inventory visibility. With RFID-optimized store inventory data, store inventory management becomes highly automated, helping retailers expose timelier and significantly more accurate inventory availability to sales channels, improving sales performance.
By tapping inventory in stores, not just in distribution centers, for the fulfillment of online orders, retailers have great opportunity to meet consumers’ insatiable demands for convenience and immediacy, while also reducing disappointment and lost sales created by out-of-stock situations. The key to offering various store fulfillment options is providing any sales channel with highly accurate visibility into store inventory availability at any time. To do so, retailers need to find ways to build the store's competence in managing inventory and increasing inventory accuracy, creating customer confidence that promises will always be met.