Today’s competitive market and demanding consumers leave little room for retailers to make mistakes with their stock.
According to Drapers 2017 Multichannel Trends Report, a joined-up approach to in-store and online inventory is important for retailers to reduce unfilled orders and keep consumers satisfied. Treating stock as one unit, regardless of the channel it is sold through, could help retailers have a better understanding of the products they have on hand or need.
“From the customer’s perspective, they want to be able to buy wherever and retailers have to keep stock the same way, so all stock is available for sale wherever the customer is trying to buy,” HSO product and technology lead Robin Coles said. “It should be seen as one channel with lots of different service points, whether it’s for a customer who wants something in 90 minutes or one who wants to collect from store.”
Industry members, including Devatics product manager Godefroy Picart, say bringing together supply and demand across in-store and online outlets could improve stock accuracy.
“The biggest game changer for optimizing stock holding is better connecting supply and demand across all channels,” Picard said. “What if stocks ends up being in a group of stores when demand is in the e-channel? The biggest gains come from connecting supply with the demand through the unification of stock pools and intelligent routing of orders.”
Merging in-store and online inventory is only half the battle, though. As omnichannel retail becomes more of a reality, retailers are scrambling to keep up with consumers on their purchasing journeys. “Phantom Inventory,” or stock that’s listed as available when it’s not—whether because of damaged merchandise, errors or theft—remains a prominent issue for retailers.
(Read more about managing stock levels: Overcoming Inventory Allocation Obstacles in an Omnichannel World)
Heavy discounting is also a last resort for some companies looking to clear their stock. Although retailers can reduce their stock volume through promotions, doing this could negatively impact sales in the long run. What’s more, having an outdated inventory tracking system could exacerbate these issues.
But the issues of phantom inventory and mass discounting could be solved by technology, like data algorithms, RFID systems and devices to maintain a better grip on their inventory counts.
Finery London, a womenswear e-tailer, relies on data to provide an accurate outlook on inventory, especially during the holiday season.
“We swear by having numbers match and making sure we have ‘one true source of data’, whether it’s a busy time or a quieter one,” Finery London COO and co-founder Luca Marini said. “We’ve had the luxury of building our entire system architecture from scratch, unlike some others who have had to patch together different systems over the years, and thus have more problems reconciling stockholding in busy periods.”
Major retailers, including H&M and Inditex, use RFID technology in their brick-and-mortar stores to boost accuracy and track inventory.
“The whole notion of RFID has been slow to take off in retail, but it’s getting there now. It increases accuracy, although it doesn’t eliminate all errors because products might have the wrong tag that says the wrong size,” HSO product and technology lead Robin Coles said. “Better quality process instore can help eliminate problems elsewhere in the supply chain.”
Devices, including smartphones and tablets, could also help retailers improve their inventory outlook by tracking the movement of stock throughout stores. Jigsaw, another womenswear company, uses iPads to improve its stock accuracy and facilitate a seamless omnichannel experience for consumers.
“Our biggest initiative in recent months has been the introduction of One Stock. This is a solution that exposes stock levels from all stores to the online customer, allowing a store to fulfil an order when stock levels become depleted in our main distribution center,” Jigsaw omnichannel director Kate Holt said. “Our stock availability online has never been better.”