A quick question to all retailers; do you have an accurate idea of your inventory right now? Or even more importantly, can you give a detailed report of the items in your stock within the next hour or so?
If that’s a no, or even a mixed yes and no, you need an inventory optimization.
But what exactly does stock/inventory management mean in retail?
Using technology in warehouses is the prime way to define inventory optimization. A company’s reasons for improving and holding inventory, ironing out the supply chain, and reducing returns are to deliver to its customers what they want, where they want it, and via the platform they choose to purchase it on.
Ultimately, a positive and remarkably satisfying customer experience is largely dependent on successful inventory control. However, the problem lies in evolving customer expectations, which seemed to take an altogether U-turn ever since the pandemic occurred.
Retailers ought to realize that it isn’t a trend. It is the new reality that is affecting the very core of the future of supply chain operations. And we’ve got to find a solution that works.
With the advancement in solutions that digitize the entire chain of commerce, the challenges facing supply chain and fulfillment leaders have amplified, if anything.
As consumers’ comfort with online shopping continues to increase with technology becoming ubiquitous, customers actively switch exclusively to digital channels to meet all of their needs, be it clothes, groceries, to entertainment. In such a scenario, the demand to safely fulfill these orders fast remain a top priority.
Building customer confidence and satisfaction is a big challenge if you don’t have real-time insights into inventory data.
Businesses spend magnificently on customer experience because according to a survey, 86% of consumers are willing to pay more for a better experience. Jeopardizing inventory management, therefore, can impact the bottom line of customer experience altogether, leaving your customers annoyed.
Experiencing a botched delivery at some point in online shopping is bound to happen. Social media is abuzz with users posting their delivered items versus that which was advertised in an appalling quality difference.
This happens not because the seller intended to sell a bad product but instead, due to the direct result of poor inventory management. Failure to see what’s in the inventory and shipping of an inferior graded product without checking in real-time causes poor fulfillment accuracy and a bad customer experience.
Tech solutions that streamline integration and manage pre-season, as well as in-season systems, allow retailers to monitor what’s available, in what quality, and at what location for ensuring optimal stock delivery.
The second biggest way in which technology helps build optimal customer experience via stock management is by erasing stock-outs. If there’s anything detrimental to the sustainability of your business, it is a stocked-out item that is made known to the buyer only once he/she places the order.
Radio-frequency identification (RFID) in the supply chain is a technological tool that allows retailers to identify items using radio waves by transmitting data from an RFID tag to the reader. This significantly increases supply chain visibility and inventory accuracy. In fact, with RFID, retailers can automate and improve accuracy by 30% and reduce out-of-stock situations by 50%.
Customers won’t wait or care for an explanation; they’ll simply move to the next buyer and won’t look back. Maintaining a perpetual inventory management system that allows real-time recording and live updates helps you keep in touch with the products in your warehouse. This is particularly important during “in-season” when peak purchase seasons must be met with equal enthusiasm by the sellers.
A unique selling point of many top brands is the quickest delivery time. The handling and processing of orders play a critical role in how happy your customer gets – the faster the order is delivered, the better the experience.
A streamlined inventory management system can keep retailers abreast of the location of their items, such that the time taken to find, sort, pack, and ship is drastically reduced.
The unbearable cost of returns is a critical challenge to overcome, compounded by devastating insights and stats into bad customer experience and handling of returns. Customers with bad purchase experiences are 140% less likely to spend than those with a positive experience. Importantly, retailers can only recoup a maximum of 25% of the loss incurred in prices on each returned item. Therefore, a returned product is a collective loss of consumer and opportunity.
The key is to arrange an instant swap until the product is still under warranty or send a new product in exchange for the returned one if you have enough in your stock inventory. Again, this calls for a proper inventory management system that is strong and streamlined to ensure proper return handling and regaining of customers’ trust.
In conclusion, a robust inventory management system optimized for assortment, order, and delivery helps you orchestrate your entire fulfillment network and deliver amazing omnichannel capabilities. The goal of stock management is to have the right product at the right time and the right place to avoid losing money on overstocking and lost sales.
This is enabled by inventory visibility and technology solutions, helping sellers track their products from manufacturers to warehouses and the point-of-sale. At the end of this optimization is a long-lasting, positive, and guaranteed 5-star customer experience.
For more information on how the potential of the technology can be unleashed through human-centric solutions in optimizing your inventories, visit the retail and logistic digital experts, altavantconsulting.com.