If you've ever worked in retail, you know that there can be many different options for seemingly the same item. As the old saying goes, "If you find a style you like, buy it in every color," so when the customer finds the perfect fitting blouse, they'll now purchase it in a variety of colors and styles. However, when they approach the register, they only hand you one item stating, "I have seven of these. They are all the same brand and price." They assume they are helping, thinking it will help speed things along to scan just that one item seven times. In reality, this could cause a significant inventory issue.
The fact of the matter is that each item has a different stock-keeping unit, or SKU, that allows vendors to track inventory movement automatically. It accounts for all attributes associated with the item type that distinguish it from other item types, such as size, style, and color. Because of this, point-of-sale precision must be maintained to prevent adverse effects on performance measures, order replenishment, and other various supply chain processes.
Below are just a handful of the various omnichannel segments that could be affected.
1. In-Store Shopping
Most days, you can walk into the grocery store and quickly pick up the items you need in the brands you prefer, but if there are inventory inaccuracies, perhaps your usual brand is not in stock. Now, you're faced with potentially spending more for a different brand or just going without. People rely on these businesses to maintain the appropriate inventory levels so that their everyday routines are not disrupted. Ensuring that the proper items are scanned in and out helps keep the correct amount of any given product on the shelves.
2. Buy Online Pickup in Store & Curbside Delivery
Buy Online Pickup in Store (BOPIS) or Curbside Delivery has become even more popular throughout the Covid-19 pandemic. It enables customers to select items from the comfort of their homes and then pick them up at a time that is convenient for them. While these are online purchases, they are fulfilled and retrieved directly from a store location. This combination of device and in-person shopping requires that the online availability and the physical quantity of merchandise match.
3. Online Orders
It used to be that consumers would turn to online shopping when they needed a specialty item and could afford to wait the days, or even weeks, that it took to arrive. With Amazon offering 2-day Prime shipping, with the option to expedite the order and receive it the very next day, that is no longer the case. Seeing that something is "Out of Stock" when trying to order something online is frustrating, especially when there is little to no indication of when it will be in stock and ready to ship. Unavailability of merchandise can potentially lead to a lost sale.
These areas are no longer autonomous of one another but are connected to create an omnichannel ecosystem. Thus, the data found in these systems must be consistent throughout the supply chain to maintain proper inventory levels. The ability to track and adapt to inventory changes impacts a company's sales and long-term success.
Inventory Transparency for Improved Customer Experience
Inventory transparency plays a significant role in consumer loyalty and engagement. The Ernst & Young Future Consumer Index shows that 40% of U.S. consumers regard authenticity and honesty in a brand as extremely important when making a purchasing decision.
With consumers adopting the blend of in-store and online/mobile shopping, the customer experience relies on accurate inventory data. There is the expectation that inventory quantities are consistent across the board. Still, a recent study by the Auburn University RFID Lab concluded that only 13% of retailers had on-hand quantities identified on their websites that matched the physical on-hand amount in the store. In those instances, those companies risk losing consumer confidence.
Achieving Inventory Visibility through Automated Data Sharing
To combat inventory disparities, companies are turning to automated electronic data sharing processes. Implementing these electronic connections enables inventory tracking throughout the order-to-cash cycle and is one of the most critical investments a company can make in its infrastructure. This automated flow of transaction documents allows companies to identify the exact location, status, and quantity of items within their supply chain while eliminating the need to enter data into each partner's systems.
In today's age of supply chain uncertainty, sharing data with trusted partners is among the first steps towards achieving inventory visibility, resulting in a responsive and resilient supply chain.
Dive deeper into harnessing the power of inventory visibility! Download the whitepaper, ‘Building the Responsive Supply Chain’ for further insights, strategies, and an action checklist to improve inventory visibility within the omnichannel supply chain.