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Modern shoppers aren’t known for their patience and unhappy customers aren’t known for keeping their feelings to themselves. A single dissatisfied customer will tell 9 to 15 people about their experience, with some telling 20 people or more. What’s one of the top complaints listed by customers? “Failure to deliver.” Which is exactly what happens when you have supply chain issues – such as out-of-stocks, shipping errors, and internal shrinkage – that come from trying to manage inventory manually. If a customer makes the effort to confirm that you have a specific product in stock before making a trip to your store, but arrives to find that you’re sold out of that item… well, that’s the type of experience they’re going to yodel from the hilltops.
When your supply chain fails to deliver because you’re trying to do things by hand, it creates a negative ripple effect for your business as customers share their experience with those around them. So then why have only 15 percent of retailers digitized their supply chains?
Realize when the most expensive upgrade actually isn’t your best option
Being a retailer nowadays means investing in a whole lot of tech. It can be hard to know where to focus your resources to maximize return, especially when you haven’t innovated for a period of time and multiple areas of your business are begging for your attention. When in doubt, start with your supply chain. All too often, retailers focus their resources on advertising or renovation without paying attention to the ‘behind the scenes’ customer experience, which results in situations like Sears’ where the retailer is paying out $0.91 cents per square foot on upgrades while completely neglecting the supply chain issues that are killing their business. While most retailers that haven’t digitized their supply chains list cost as the primary reason for the delay, many of these same retailers invest in store upgrades that don’t directly impact the customer experience, or help them avoid those “failure to deliver” type situations that can kill a business’s reputation.
Recognize out-of-stock patterns to match supply with demand
Out-of-stocks aren’t an anomaly. Inventory forecasting is a “constant issue” for 73 percent of retailers, which helps explain why consumers regularly report understocks when visiting stores. Luckily, your business doesn’t have to go down like that. There are actually distinct patterns to where and when you run out of inventory that can’t be seen by the naked eye, but they can be easily charted by an AI-based inventory visibility platform. When customer demand for product fluctuates based on seasonal changes, trends, or local events, an AI-based platform can help alert you to these changes before they impact your business. Additionally, an AI-based visibility platform not only tracks where inventory is located, but it identifies subtle trends in stock levels to help you get ahead of out-of-stocks so that you’re always ready to deliver a standout customer experience when and where it matters most.
Reduce shrinkage with universal inventory visibility
Shrinkage is a profit-killer for retailers of all sizes and technology advances don’t seem to be helping the problem. In fact, 41 percent of retailers reported increases in overall inventory shrink last year. While that statistic may call to mind images of hackers and thieves getting hauled out in handcuffs, the reality is that 87 percent of retailers say that inaccurate inventory counts cause more lost profits than theft. This is major considering that shoplifting has long been considered the #1 source of shrinkage. When every branch of your supply chain is completely transparent, it’s a lot harder for inventory to get lost (or stolen) between the cracks. Vendor relationships are simplified, shipments and deliveries are easier to track, warehouse operations run more smoothly, and you always have the right product for your target customer in stock.
Bringing it all together
The more you know about how your business is running, the better your business performs in the eyes of your customers. It all starts with smarter investing, so take action by adopting a platform with inventory visibility to help you eradicate “failure to deliver” across your retail operation. Then, use a platform such as Watson Supply Chain Insights to reduce shrinkage across your supply chain so your business operates at full-capacity and you always know where your inventory is located–– ultimately creating a better experience for your customers… and better profit margins for your bottom line.