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Inventory Optimization for Omnichannel Retailers

Today’s retail business has changed tremendously, partly due to rising customer demands and expectations. The retail business which once operated as physical stores has evolved with a complete restructuring and reorganization based on the current customer buying patterns. A new approach in retail is to position the stores as places where customers can interact with the brand, both online and physically. The focus of the retail store is now customer satisfaction and delivery fulfillment.

Retailers want to provide an omnichannel experience in marketing, selling, and serving customers. This requires managing inventory at optimal levels for online orders, in-store purchases and return channels. Optimal inventory is the foundation that allows retailers to offer the best brand experience to customers, irrespective of where they are located or how they interact or place an order.

Therefore, retailers offer different fulfilment strategies such as “order online and pickup from stores”, or “order online and collect from distribution center” and more, to adjust to the needs of customers. The downside to all these fulfillment strategies is the difficulty to keep up with delivery commitments, due to a number of inventory related challenges.

As sales channels expand, inventory needs to be distributed to multiple locations to meet the growing demands of the customers. This means, the greater the number of channels that a retailer uses to engage with the customer, the more important it is to have a strong inventory optimization system in place.

An omnichannel inventory optimization solution has additional benefits – it can offer retailers insights such as inventory counts for all products, when inventory levels are reaching critical state, when products are moved from one location to another and more.

Inventory Optimization for Omnichannel

When retailers use multiple channels for selling, they need to balance inventory levels that cater to all channels. This optimal inventory for omnichannel retail is based on the current inventory status, customer returns, online orders that are yet to be fulfilled and more. Otherwise without optimal inventory, they run the risk of going out of stock or over stocking.

According to Apparelmag, “In the simplest of terms, inventory optimization means balancing demand and supply by carrying a level of inventory that reduces the possibility of out-of-stocks while simultaneously minimizing the carrying cost of that inventory to the bottom line.

To balance and optimize inventory, retailers need to invest in automated omnichannel inventory optimization technology with capabilities for data capture, truck route planning, collecting customer feedback and more. Modern technologies such as cloud architecture and machine learning can be instrumental in inventory optimization. These solutions help retailers overcome delivery fulfilment challenges by ensuring:

  • Different fulfilment strategies for all the channels are taken into consideration for stock planning.
  • Clear inventory visibility is provided across all channels, which can be used to forecast demand.
  • Order management and delivery fulfillment processes work in tandem across all channels.
  • Inventory complexities are sorted out for online and in-store purchases.
  • Seasonal and promotional demands are taken into consideration to plan for demand and delivery.
  • Daily customer demands and operational needs of the inventory team are met.
  • Inventory levels are optimal at every store location.

Having a solution with the above capabilities can help retailers improve their inventory forecasting accuracy, and offer full visibility from the point of order origination to the delivery fulfillment location. Moreover, when inventory is available in real-time retailers can offer the most efficient and economical option to fulfil the order. This capability, improves their profit margins across all channels. Thus, with delivery fulfillment success retailers can enjoy increased trust, higher purchases, loyal customers, and long-term business success.

Retailers need to ensure that the omnichannel inventory optimization solution is integrated with the in-house supply chain system to balance inventory levels across all distribution centers. While inventory optimization solution is one side of the coin, the other side is the delivery management solution that facilitates better delivery fulfilment for retailers.

Implementing a robust delivery management software helps retailers overcome challenges related to missed delivery opportunities. It is imperative to have a delivery management solution that can handle all your delivery transactions without any glitches, while providing full visibility and control across the entire delivery journey. IGotIt is an industry-leading delivery management platform empowering retailers, logistics companies, warehousing and distribution and more to ace every mile of the delivery game. Get in touch with us to know more or to book a demo.

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