The retail industry is at a crossroad. We've discussed omnichannel behavior for some time now -- both from a consumer and organizational perspective -- but we need to turn that discussion into strategy and action. Retailers are now challenged to use insight from data created across these channels to drive better business performance and meet customer expectations. Technology is they key to enabling this.
Nowhere has the explosion of omnichannel been felt more deeply than retail inventory. Monitoring, moving and replenishing stock was relatively simple when the only end point was the physical store network. But consumers now discover, browse and buy from retailers through a variety of channels -- physical, mobile, online -- through marketplaces and from Drop Ship Vendors (DSVs), which is creating more range, storage and fulfillment options than ever before.
The Retailer's Headache
Finding the optimum product selection and quantity to offer customers online and in-store is a trial in itself. Once you add in the ability for customers to place orders and return items across different channels, it becomes infinitely harder to know where there is surplus stock and insufficient supply.
Determining how much should be made available and where is a major challenge. Too much and it doesn't sell and has to be marked down. Too little and you’re out of stock with lost sales and lost customers. Too much in one place and too little in another just compounds the problem. It is this headache -- and its associated costs -- that means optimizing inventory and achieving flexible fulfillment in the omnichannel world is the next major imperative for retailers.
Creating Hurdles for Customers
Traditionally, businesses have used Point of Sale (PoS) systems to manage in-store transactions and local product inventory. However, when those businesses embraced online shopping, they added a separate solution to control e-commerce and warehouse inventory, and these two systems were rarely integrated.