Identify retail engagement challenges before they happenOctober 24, 2019
Inventory is more than just fulfillment. Despite what some may think, it is of prime importance: without an effective inventory management system, you endanger the success of your customer engagement efforts. To protect those efforts we must treat inventory as a key component of our customer experience and ensure our customers’ needs and expectations are always met.
Let’s take a look at some of the challenges posed by lack of a comprehensive inventory management system:
Out-of-Sync Online and In-Store Inventory
Though all retailers strive to increase in-store visits and purchases, the fact remains that the majority of shopping now begins with an online search. So much so that more than 80% of consumers conduct online research before buying anything. That’s a telling statistic given that most retailers have not yet been able to sync online and in-store inventory.
To add fuel to that fire, more than 75% of consumers conduct their research from mobile devices. This means that people could very well be either in-transit, or even in-store, while searching to determine whether the item is currently available. And whether it’s the search that encourages them to visit the store to see and buy the item, or if the search happens in real time within the store—either way, a sale depends on the items being present.
Lack of Inventory that pertains to Personalization
In today’s highly connected, data-driven world, the need for personalization is the single biggest business goal in retail. And the numbers don’t lie. Seventy-five percent of modern customers are more likely to buy from a brand that personalizes the transaction, addressing them by name and using their purchase history to make shopping recommendations. The sad truth, however, is that more than 80% of retail businesses are far behind the technology curve from where they should be to solve this modern need for personalization.
That said, inventory has become a key driver in ensuring that customer expectations are met when addressing personalization. For example, if the key to personalization is to offer rewards, discounts and, most importantly, suggested retail items based on past engagement history from online, in-app, or in-store, it becomes obvious why knowing what inventory is available and accessible to the marketing automation engine is of growing concern.
If an offer is to be made to an individual through an engagement engine and that offer is accepted by the customer, and the desire to purchase is present, then that item better be available. If not, the brand damage may be severe enough that the customer simply leaves and never returns. Even more dangerous, the sharing of that experience on social media will cause further damage through the viral nature of social platforms and culture. All in all, a precarious situation to be in for something as simple as inventory visibility and transparency.
When it comes to inventory as a whole, the logistics of getting items from the warehouse to the store is a situation that has been solved for years. However, with online, in-app, and in-store shopping interconnected, the idea of what is currently in the warehouse paired with what is also in each individual store adds a new dimension.
There are two distinct challenges as they pertain to inventory tracking. First, there is the obvious aspect of what has been shipped to each store and the subsequent ability to check each store for the availability of items. However, more than just warehouse-to-store delivery, tracking also becomes the challenge for returns. In many cases, items are returned to different stores from where they were purchased. This again adds to the complexity of keeping track of inventory and what is available across all locations.}
The days when it was acceptable for in-store staff to make a customer wait while multiple phone calls were made to various other locations to determine stock is no longer an option. Retailers should have instant insight into where an item is located, its options, and its levels. Of course, it should be more than that, the system should be designed to give the option of either in-store delivery or home delivery. Without that ability, retailers are sure to fall behind.
The key to these three challenges is real-time visibility into all aspects of the inventory realm. And though you may see that as difficult, you can solve them with just a few modern engagement tools.
First, let’s take a close look at your inventory management system (IMS), one that connects warehouse, in-store, and online stock views into one robust system. Truth be told, many retailers need a new system as they continue to make do with older and outdated systems: ones that have been listed as end-of-life by the provider or were home-grown and lack the ability to easily adopt digital transformation initiatives.
A new and more modern IMS should automatically optimize the placement of items in your inventory based on preferences and the velocity of inventory movements. Furthermore, it should also support a number of mechanisms for capturing all of the information required to properly manage and document every item in your inventory—wherever it may be and whatever state it might be in. In fact, it should also be part of your Warehouse Management System. Let’s call it a Distributed Inventory Management System (DIMS).
Once you have that detailed visibility, then you can start bringing in even more valuable pieces of the customer engagement toolset; for example, the Customer Data Platform (CDP).
In short, a CDP gathers data from all available sources with the purpose of properly collating and attributing that data to a specific individual to build a profile of that individual. With a robust CDP, there are no known limits to the types of data that can be collected. Whether structured or unstructured, personally identifiable information (PII) or anonymized data (non-PII), a good CDP should support it. This means that by connecting into existing systems such as CRM, loyalty, Point-of-Sale (POS), and other tools in the Martech (Marketing Technology) stack, you can leverage single-user-profile information to truly connect and engage with customers.
However, without a robust and interconnected inventory system—a DIMS—the CDP is useless. Because without precise inventory visibility retailers risk making offers or promoting items to customers that aren’t available.
And that’s even worse than when they were just browsing.