Using omnichannel in retail is a sign of the evolution of the industry. Customer journeys used to start and finish in the brick-and-mortar store. These days customer journeys follow an omnichannel experience – they shop online, use their mobile phones, they go into the brick-and-mortar stores, and call in to support centres. No matter how you slice it, a customer will interact with retail through an omnichannel fashion during their purchase.
However, the evolution and implementation of omnichannel have brought many challenges to the management of inventory stock. Luckily, there are a few strategies that businesses can tap into to optimise inventory management.
When a brick-and-mortar store implements an eCommerce platform, sometimes the supply chains for the sales channels stays segmented. This segmentation can cause discrepancies with inventory stock across the business. If inventory information is scattered in different places, your demand forecasting could be miscalculated and it will be difficult to optimise the supply chain if you’re not sure what’s collectively coming in and what’s collectively going out. Without this visibility, you risk not being able to fulfil orders and having unsatisfied customers.
How to manage
Be proactive about finding an online inventory management solution before you implement another channel. Make sure the online inventory management solution is scalable and accounts for growth. If it allows for change, it can adapt as your business grows with more components in the omnichannel world. This way you can integrate your supply chain and track inventory across all channels in real-time. Your supply chain will be amalgamated into one clear system.
Safety stock can be immensely important when problems with suppliers arrive. If 200 winter skis get held up in customs, then you’ll most likely have to dip into your safety stock. It helps prepare you for peak demand times or when there are issues with supplier delivery. However, with omnichannel inventory management, there is a lot of stock going in a lot of different directions. A common challenge is over-filling your safety stock to account for the different channels. It’s a large investment to have money sitting in safety stock. If you are looking at your safety stock in silos, then you will have difficulties maintaining healthy, sustainable levels of safety stock.
How to manage
Essentially, you need to reduce your safety stock to better optimise across all channels. It’s also important to recognise that your safety stock amount will never be exactly one number. A steady safety stock means you’re not considering changes in demand and popularity of some products. Use an online inventory management system to track stock levels in real time.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.