Inventory management and your omnichannel retail dream
5 steps to get started on your inventory visibility journey
Omnichannel retail, omnichannel commerce – it’s all the same. Providing your customers with a consistent, seamless experience and allowing them to move between channels to order, edit, collect or return is now standard.
With separate systems across organizations, how do you merge everything so orders, inventory and fulfillment options are shared? This exact challenge created the traditional order management system. Today, most of the largest retailers are fully omnichannel. They treat their warehouse and store inventory as one. Orders can be placed and managed across all channels. And, fulfillment options are only limited by your imagination (BOPIS, SFS, curbside pickup, etc.).
If you are not one of these early adopters of omnichannel retail, you’re probably wondering where to start. Combining multiple and often disparate systems can be difficult and many internally-designed systems weren’t built for omnichannel options. That means they can be difficult and costly to upkeep as more fulfillment options are demanded by customers, and perhaps already provided by your competitors.
Inventory is the first step for all omnichannel retailers. You can’t make delivery commitments to your customers if you don’t know where all your inventory lives. Let’s walk through a few initial steps that will guide you in your journey to omnichannel inventory visibility.
Step 1: Determine where your inventory exists across your network and across systems that are tracking that inventory. This gives you the scope of potential issues and effort, plus the cost that exists in your organization.
Step 2: Ask yourself – do you build or buy? Some companies feel they have more control over their order management system if they build it in-house. This way, they control all aspects of the system and have complete flexibility. However, other companies prefer to focus on innovating and delivering great customer experiences and don’t want to tie up resources building such a tool. In these cases, they prefer to purchase an off-the-shelf product.
One thing to keep in mind is how much customization you’ll need. You may have relatively simple plans initially – but think long-term and be able to expand your fulfillment options as new ideas are developed.
Step 3: Decide if you are going to update your entire order management system or start with getting an accurate real-time view of your inventory. Figuring this out early on is critical to your success. If your company is ready to jump all in and update your order management system, you are set. However, if your company wants to take a more conservative approach, you could start with just implementing an inventory visibility solution so you have real-time, accurate inventory data across all channels.
Step 4: Build a business case to justify the investment. To do this, read this recent report from Forrester. Additionally, familiarize yourself with the benefits that other retailers have achieved with an intelligent fulfillment platform:
- Eileen Fisher increased accuracy and trust in inventory data, helping associates serve customers faster.
- Fossil can now reallocate stock in a dynamic way when inventory for an in-demand product is running low on one of its channels.
- REI uses artificial intelligence to factor in various goals throughout the year, such as product margin, shipping speed and fulfillment costs, and matches that to its inventory in its three distribution centers and 155 stores.
Step 5: Start assessing different vendors to see which is the best fit for your needs. This is a very important point in the journey, as the choice you make in this step will most likely be part of your company for the next 10+ years.
If you’ve made it past step 5, that is when the hard work really begins. Now is the time to maximize your efforts and test, test and test again in order to optimize and glean value from your inventory management journey. Read this recent blog to learn three reasons why you need a better view of your inventory.