All You Need to Know about Real-time Inventory Visibility Challenges
With the advancement in technology, new tools, and platforms being introduced almost on a fortnight basis, and of course with the ever-evolving consumer buying behaviours, the retail landscape has witnessed a significant paradigm shift. And, inventory management is a crucial function that every retail brand, as well as individual retailers, must take care of.
Considering the gradual rise of tech-savvy, gen-Z customer base, meeting customer expectations (in this case, fulfilling the orders) might just not be enough. Today’s customers are eyeing to get easy, quick, hassle-free, and a consistent order fulfillment experience. And, cutting to the change, such top-notch order fulfillment is almost unachievable without robust inventory management and holistic visibility.
Buy in store or ship from the warehouse were the conventional methods that retailers used to leverage for order fulfillment. But, in the need to keep up with customer expectations, retailers had to introduce a few crucial aspects such as click to collect, ship from store, drop shipping, and third-party lockers for inventory storage. So, now, they have to keep a tab on inventory function, storage, and capacity across all these entities. And, the legacy systems built to aid in inventory and order management are definitely having a hard time meeting the expectation.
Though approximately 72% of retailers agree on the efficacy of omnichannel inventory management, most of them are yet to launch full-fledged into it. Well, inadequate real-time inventory visibility could be an obstacle in their pursuit.
We will be covering some of the crucial real-time inventory visibility challenges here.
Lack of Unified View of Inventory across multiple POS
Considering the versatility of stock points, it’s quite possible that retailers may leverage multiple software to keep a track of the inventory. Sometimes, retailers might find rearchitecting the legacy systems as well as unifying them a challenge. This leads to the challenge of incoherence among the points of fulfillment in the retail ecosystem. Retailers might not have clear visibility of what inventory they have, where it is, or whether it’s available to sell.
Though this is a crucial challenge, it’s nothing that can’t be solved with a robust Order Management System (OMS). These OMSs are built to accommodate inventory feeds from multiple systems, such as ERPs, POSs, Warehouse Management Systems (WMS), and eCommerce platforms, and keep that data in sync in a centralized directory. This will enable modern retailers to have a unified view of the Available to Sell (ATS) inventory across all the locations. OMSs are also crafted to accommodate inventory feeds from third parties too, such as suppliers and Drop Ship Vendors (DSVs).
While customer satisfaction is the prime objective of retailers, a booming ROI does not lag too behind. However, a lack of a unified view of inventory can result in lost opportunities to sell through online channels, which retailers must try to address on priority. To avoid inventory underselling, retailers must have a unified inventory picture from multiple locations in multiple geographies. Even if something is out of stock in the warehouse, retailers still can sell it if it’s available in one of the brick-and-mortar stores or directly from the suppliers using the ‘Vendor Direct to Customer’ model. This could be cost-effective, and convenient for the customer, to fulfill from a store.
In the circumstance where the inventory management system isn’t accurately reflecting the stock, retailers may end up overselling. For instance, they may sell a product twice or accept excess orders to fulfill for which they might not have adequate inventory. In the scenarios of fulfilling from stores and OMS not providing real-time updates, a shopper could purchase the last item in a store and it may still appear to be available online. This may again lead to lost opportunities, shopper distress at the inability to receive the product purchased due to unavailability. While placing buffer limits may reduce the risk of overselling, it may lead to underselling, which is not promising for the retailer too. Real-time inventory visibility is the best course of action to optimize the buffers and stand a better chance at higher ROI.
Much to the disappointment of retailers, legacy systems like ERPs weren’t built to handle real-time updates of inventory in different statuses across different stock units. And, POS systems are not devoid of similar limitations.
Inventory is no longer simply unsold or sold; it moves rather faster now. It’s placed in an online cart, removed from the cart, pre-ordered, back-ordered, reserved, in-transit, damaged, etc., and all within a short span of time and with just a few clicks. Simply put, any shortcoming at the retailer’s operational front may make them lose to their other proficient counterparts. Real-time inventory visibility is the best bet for modern retailers in efficiently managing their inventory while surpassing shopper expectations.
OMSs offer an incremental approach to inventory updates—where retailers got only to process the delta, keep the systems stable to continue to process sales uninterruptedly. SaaS OMSs even distribute their load across various cloud platform components, which means they can ensure scalability, and high performance at all times.
Inventory Segmentation Inability
Now, who does not love options while shopping? Your shoppers are going to appreciate your efforts if you could show them how they can avail of the products rather than just showing what all are available for sale.
To conclude, it’s not enough for retailers to be able to see the inventory, they also need to see which inventory can be used to fulfill specific types of orders. Here comes the role of inventory segmentation.
With a cloud-based, purpose-built OMS from Vinculum, retailers can achieve a much faster speed to market. In addition, these OMSs scale with the growth, and expansion efforts of the retailers. So, retailers can have the perfect solution for today and tomorrow to overcome the real-time inventory visibility challenges.
Intrigued to explore more? Do connect with the experts at Vinculum right away!
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