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How inventory visibility will drastically impact the customer experience
Customer expectations have changed seemingly overnight because of the pandemic. This isn’t a trend. It’s a new reality that has affected the very core, and future, of your supply chain operations.
Without real-time views into inventory, you risk losing customers who want to buy from a retailer who can check stock across multiple locations and provide up-to-the-minute views on what's available near by.
Retailers of all sizes need to quickly adapt and position themselves for success in an increasingly online and contactless purchasing environment. What does that look like and mean for your business? Each interaction has to live up to the ever-evolving customer expectations and inventory visibility is essential for that – starting at the initial entry point of any digital experience. Without real-time views into inventory, you risk losing customers who will find an alternative retailer where they know they can purchase from how and when they prefer.
The challenges that supply chain and fulfillment leaders are currently facing and working around every day are now amplified. For example:
- Inventory data is scattered across siloed systems in and outside of the organization, so teams don’t have the information they need when they need it.
- Without the right tools to connect and correlate inventory data, and see the impact external events can have, it’s impossible to proactively address disruptions to inbound supply to meet demand.
- Costs are rising to fulfill orders and meet customer expectations for same-day or next-day delivery.
"As the consumer’s comfort with online shopping becomes higher and technology is more intuitive and ubiquitous, the digital side of the retail business may be stepped up at a faster rate than previous projections."
Forrester Research¹
While shoppers continue to purchase everything from groceries to clothing to home entertainment items through digital channels, the demand to fulfill those orders fast and safely remains a top priority. Customer confidence can be a huge challenge when you fail to have real-time insights into your inventory. These shoppers are more likely to continue shopping online now that they are comfortable and familiar with the easy processes. However, they need their chosen products available through a menu of reliable fulfillment options – in addition to flexible return options.
One of the biggest obstacles many retailers face is knowing exactly what currently exists for inventory availability, calculating the shipping time for that inventory, and then promising an accurate delivery time to customers within a matter of minutes.
Inventory management, a critical element of the supply chain, is the tracking of inventory from manufacturers to warehouses, and from these facilities to point of sale. The goal of inventory management is to have the right product in the right place at the right time – without overstocking and losing money spent to purchase that inventory. This requires inventory visibility — knowing when to order, how much to order and where to store stock.
To get merchandise to shoppers faster and more efficiently, retailers are adding fulfillment options like curbside pickup, buy-online-pickup-in-store (BOPIS), and same-day delivery. Efficiency in optimizing your inventory – which includes the planning process – allows you to move in-store inventory quicker, while getting customers what they need within hours. However, this can be a significant hurdle when your suppliers are struggling to meet surges and shifts in demand, and delivery channels are delayed and unpredictable as transportation and logistics providers adapt to change. In addition, demand patterns and trends based on last year’s sales are changing on a weekly basis.
Get an accurate view of the stock sitting on your shelves
Channel proliferation mandates the need for a platform that handles surge to online, call center, mobile, marketplace, and of course physical storefront activity. Connecting end-to-end inventory visibility with intelligent order orchestration is the path to efficient, flexible fulfillment – today’s competitive advantage.
The increase in online orders, coupled with the instability of supply production, is causing an escalation of shipping delays. For example, if most of your inventory comes from overseas, odds are good that you can’t rely on shipments from your suppliers arriving on time (or with complete orders). In turn, this impacts what you have at any particular warehouse or store to ship to your customers. Retailers who have real-time views into where their inventory sits are able to use additional and innovative delivery methods to fulfill orders in order to remain profitable and meet the surge in demand from shoppers.
The winners – now and moving forward – will be the retailers that quickly adopt these emerging services and capabilities to outpace competitors.
Ulta Beauty CEO, Mary Dillon, recently shared how the company is focusing on expanding the different ways to shop (online, in-store, curbside) to help drive customer loyalty and create more profitable customers who shop and spend more.
Uber recently announced two new types of services including Uber Direct and Uber Connect. Uber Direct is a delivery platform for retailers looking to implement same-day delivery for purchased items.
Retailers must create a digital strategy that allows them to pivot quickly for short-term wins such as curbside pickup, and also transform and scale the business for long-term wins like an entirely sustainable supply chain operation.
A robust order management platform helps you orchestrate your entire fulfillment network and deliver powerful omnichannel capabilities. You can track orders from inception to delivery, automate manual fulfillment processes and data throughout the order lifecycle, and get real-time visibility into every order across all channels.
With a digital supply chain, you don’t need to wonder if you can scale and respond to a crisis. You have the speed, flexibility, insights and innovation to manage disruption today and get ahead of events in the future.
"The investments we have made over the last four, five, six, seven years to develop the omnichannel capabilities, those things are going to pay back in a huge way right now, because while we are shutting the stores down to the consumer walking in day in and day out shopping, we are going to keep them up and operating as fulfillment centers, so leverage them as a huge asset."
Roger Rawlins
CEO
Designer Brand
A digital roadmap for quick wins and longer-term success
A digital roadmap can accelerate your journey to deliver immediate value and drive toward longer-term benefits. This may start with consolidating siloed inventory that is distributed across your supply chain ecosystem. With a real-time picture of all your inventory, you’re able to offer fulfillment capabilities such as BOPIS, curbside pickup and other services to shorten time to fulfillment and meet customer expectations. The key is having a plan and starting with one thing at a time based on how best to meet customer needs.
"We knew our manual processes simply wouldn’t scale any further, which was putting the brakes on revenue growth. We set out on an omnichannel retail transformation. As a first step, we wanted the ability to manage all inventory across the business as a single pool — and we started our search for a world-class order management system."
Keir McIntyre
Director of Direct to Consumer Technology
Eileen Fisher
If you’re using manual processes and a collection of dated, often homegrown legacy solutions that have reached their limit in terms of capabilities and scalability, then you’ve got plenty to keep you up at night.
Navigating the busy holiday season, and other events that create spikes in demand, is a daunting task, but pales in comparison to a future where disruptions are more frequent and multi-layered. How will you continue to adapt and be resilient? Technology can help!
Leveraging an intelligent fulfillment platform allows you to orchestrate your entire fulfillment network with powerful core capabilities and next-level options. It combines multichannel order aggregation, inventory and delivery visibility, and service availability within a single platform, for truly omnichannel order fulfillment.
"The impact of the pandemic tested our business and supply chain models, but with the help of IBM technology, we’ve opened new omnichannel capabilities that will continue to be a major component of our business...We’re confident that we’ll be able to continue showing this flexibility and adapt to our customers’ ever-changing needs."
Varadheesh Chennakrishnan
Chief Information Officer
JOANN
With enhanced inventory visibility, you’re armed with a set of high-powered binoculars that give you real-time inventory views across all stores, warehouses and channels, for flexible, fast and reliable fulfillment services, including-ship to-store, BOPIS, curbside pickup, delivery and drop-ship.
As stores continue to open, there is a heightened focus on sales associates to deliver a superior customer experience. This includes providing real-time product availability, recommendations based on customer history, and improved efficiency in pick, pack and ship/hand-deliver for BOPIS and curbside fulfillment capabilities.
All of this creates the opportunity to integrate the latest external data sources with internal purchase data, by channel, to create a holistic view of which product categories, regions and channels are seeing the most impact across your supply chain. This insight can be used to provide immediate and actionable insights and recommendations on product ordering and placement to minimize out-of-stock, as well as provide fulfillment recommendations to avoid future supply chain distributions.
As part of a Total Economic Impact study, Forrester interviewed several retailers with years of experience using IBM Sterling Order Management and identified the following key results:
- New profit from improved order management of USD 4.2 million. Reasons cited include improved availability, visibility and flexibility provided by additional omnichannel capabilities.
- Savings from improved operations of USD 6.4 million, including uplift in conversion rates and reductions in markdowns, shipping, inventory carrying and inventory placement.
- Avoided costs of previous collection of order management tools of USD 2.3 million, based on savings on license fees, regular hardware updates and full-time employee maintenance hours.
"We have retained approximately 70% of our sales compared to last year since moving to our enhanced curbside service model...This is a testament to the strength of our multi-channel capabilities – as our domestic online sales are up over 250% and approximately 50% of these sales are from customers choosing to pick up their products at our stores since moving to our curbside service model."
Corie Barry
CEO
Best Buy
According to this same Forrester survey, “The most important investment for any omnichannel program is to ensure that shoppers, store associates and suppliers know the precise location of which products are in every store. Many surveyed retailers have not achieved that vision: 56% said that inventory accuracy was a problem for their omnichannel. However, the top omnichannel investment is order management systems, which promise to support both inventory accuracy and order routing.”²
Footnotes
- The State of Retailing Online 2019: Omnichannel, Marketing, and Personalization,” Forrester Research, Inc., March 25,2019.
- Forrester, “The Total Economic Impact™ of IBM Sterling Order Management, Business Benefits and Cost Savings Enabled by IBM Sterling Order Management on SaaS,” December 2019.
