According to Harvard Business Review, 73% of customers use multiple shopping channels. It suggests that modern customers are increasingly adopting a multi-channel shopping approach. They seek to explore products, compare offers, and make informed decisions.
This is why many forward-thinking businesses are turning to real-time inventory management systems to meet evolving customer expectations. They help track, plan, and manage inventory through many channels.
Most omnichannel retailers today use real-time inventory management systems. Optimizing the supply chain with real-time inventory data allows for a seamless shopping experience and reduced costs. In addition, these systems offer efficient inventory control and stock visibility across various channels.
Through improved supply chain optimization, businesses can unlock a host of benefits.
Understanding the Benefits of Omnichannel Inventory Management
Real-time inventory management is necessary for e-commerce retailers to provide a seamless shopping experience to customers. Effective management of stock data ensures long-term customer satisfaction and ROI returns. The system also helps plan for seasonal fluctuations and streamline the sales process across all channels.
Some key benefits of optimizing the supply chain with real-time inventory data include the following:
1. Optimizing Inventory Across Channels
How many times has it been that a product shows in inventory but is not available in-store? The inventory accuracy for retailers stands at 65%. These inventory discrepancies can be caused by human error, return mismanagement, or other issues.
Omnichannel in the supply chain allows for reduced out-of-stock situations. As illustrated by Best Buy, e-commerce inventory management boosts customer retention and satisfaction. The electronics retailer gives several options to its online customers. Most importantly, it enables users to track their preferred products at specific store locations.
2. Improving Customer Satisfaction
Omnichannel customers are known to show more loyalty to their chosen brands. HBR's study found that 23% of customers revisited retail stores after their first omnichannel experience. It also suggests that customers recommend the brand to others compared to offline customers.
Parker Hannifin, for instance, had 101 divisions operating separate inventory management systems. To improve efficiency and customer experience, they developed an e-commerce platform. Now customers can place an order on one platform instead of different channels. This switching has helped them to-
- Optimize their inventory
- Maximize sales
- Boost customer satisfaction
3. Optimizing Operational Efficiency
Employing a real-time inventory management system can help you boost your operational efficiency. Such a system utilizes technology to track and control inventory levels in real time. As a result, you stay up-to-date on stock availability across various business channels. This enables you to make informed decisions and prevent stockouts and overstocking.
For instance, Eileen Fisher's various channels had separate inventory management systems. Trust in stock data was low as the data was only updated periodically. The decision to switch inventory management systems helped them -
- Build trust in their employees' minds
- Reduced costs and delivery time
- Implement a ship-from-store fulfillment model
4. Offering a Seamless Shopping Experience Across Multiple Channels
Customers today have access to several channels for their shopping needs. They tend to check products online before visiting physical stores. Inventory consolidation across channels provides a seamless shopping experience for customers. It allows customers to browse products and check availability at specific store locations.
As a case in point, Walmart's online grocery pick-up service is an excellent example of a seamless shopping experience. Customers can shop online and pick up their groceries from a nearby store! The result was that-
- Customers found it user-friendly and quick
- Online customers spent 50% more than offline store customers
5. Improved Customer Data Management
Previously, customer data used to be divided over different segregated platforms. But with real-time inventory management systems, customer data is consolidated over one system.
Parker Hannifin's strategy is a lesson on better understanding your customer. Based on the consolidated customer data -
- The system provided product suggestions to users
- Optimized stock intake
- Reduced inventory storage costs
- Helped tailor the marketing strategy to customers' needs
Challenges and Considerations in Implementing Real-Time Inventory Management
Effective implementation of an inventory management system can present several challenges. First, plan to reduce risks to improve your business' efficiency when implementing your strategy.
Here are some common challenges associated with implementing such a system:
1. Integration with Legacy Systems
Implementing an automated eCommerce inventory management system requires a robust and reliable technology infrastructure. This includes hardware, software, and network capabilities to support the optimization of inventory data. Many legacy systems, though, are incompatible with new technologies. As a result, investing in a new system may be necessary to ensure smooth implementation.
Integration of legacy systems requires careful planning, assessment, and sometimes custom development. Businesses can streamline supply chain operations with an integrated approach.
2. Data Accuracy and Synchronization
Real-time inventory management relies on accurate and up-to-date data from various sources. This includes point-of-sale systems, warehouse management systems, and online platforms. Ensuring the accuracy and integration of data from different methods can be challenging. After all, data errors can affect the effectiveness of an automated inventory system.
Seamless integration of data from multiple sources is essential for maintaining the integrity and reliability of the real-time inventory management system.
3. Scalability for Future Expansions
As the business grows, it may experience fluctuations in demand. Hence, inventory management systems should be able to handle varying inventory volumes. In addition, a scalable system may involve additional hardware, software licenses, or cloud-based solutions. This allows for seamless expansion and increased data flow accommodation.
Ensuring the system's scalability empowers businesses to adapt to changing needs.
4. Personnel Training
It's essential to train employees to use an omnichannel stock management system. Adequate training will help maximize the system's potential and help drive adoption. In addition, training personnel should include all aspects of the system. These include updating and viewing inventory data and generating reports.
While training requires considerable investment, it will help employees adopt the omnichannel system quickly.
5. Security and Data Protection
Inventory management systems handle sensitive inventory and customer data, including financial details. So it is critical to focus on data security. Data security includes encryption, access controls, and regular security audits. By prioritizing data security, you can protect customer privacy and safeguard your brand image.
By proactively addressing security, businesses can instill confidence in their customers and maintain the integrity of their inventory management system.
Embracing Real-Time Inventory Data for Enhanced Efficiency and Customer Satisfaction
Implementing a real-time inventory management system offers many benefits for businesses. For example, it helps improve operational efficiency, optimize inventory control, and boost customer relations. First, however, you need to be aware of system implementation challenges.
Many legacy inventory management systems aren't compatible with new technologies.
Moreover, when implementing a new system, be mindful of the system's scalability. It needs to adjust to seasonal inventory fluctuations and customer demands. Consider privacy and security too, when building seamless shopping experiences with real-time inventory management.
Read our blog on Implementing Machine Learning for Personalized Product Recommendations in Seamless Shopping
With a robust and scalable inventory management system, you can pave the way for future growth and success.