How easily can you satisfy customer demand in the store? My colleague, Tim Barton, recently broached this subject when he hosted a webinar with the British Retail Consortium and Retail Connections analyst Chris Field, looking at how to drive bricks-and-mortar sales.
At the heart of retailers’ challenge is being able to give shoppers the same satisfaction in the store as they can online. For too many organizations, a well-known online customer can be completely anonymous when they walk onto a shop floor.
Even more worryingly, the item this unknown customer wants to buy can also be anonymous to the retailer, if it’s not ready and available to purchase there and then. This is because many companies lack a 360 degree view of customer activity and a complete view of stock, in order to match supply to demand in all channels.
This can have devastating consequences in terms of both lost sales and brand perception; what’s the point in spending vast sums on marketing to get customers into a store, only to disappoint them on arrival with a lack of availability?
A single stock view is absolutely fundamental to keeping customers happy. Retailers need the ability to look up and allocate inventory in real-time – but how do they achieve this in the most cost-effective, least disruptive manner? iVend Retail has put together 5 ‘progress’ points to help retailers align their journey to a single stock view over the next 12 months:
Step 1 – get the foundational technology right
The right cloud solution is the bedrock of omnichannel customer satisfaction. To serve the customer everywhere, retailers need to move from multiple systems to a single means of managing inventory. Moreover, this solution has to be capable of scaling/evolving as the business grows; there’s little ROI on technology which will quickly be outgrown.
Step 2 – use that technology to gain real-time insights
The most profitable retail organizations are using up-to-the-minute data to make decisions ‘in the moment’. A single stock view is more than just having 360 degree visibility; retailers need to know the availability of that stock, to determine what has already been promised to customers and what is available to sell.
Step 3 – improve the accuracy of decision making
As I alluded to in the previous step, the strength of a company’s decisions depends on the accuracy of their insights. Customer behavior changes by the moment, and therefore with real-time information, retailers can plan, merchandise, allocate and replenish based on current conditions.
More than that, they can tweak their models as market conditions change, to profitably fulfil orders based on stock availability in all channels.
Step 4 – increase sell-through with more effective forecasting
By mapping demand more closely across their business network, retailers can in turn increase the accuracy of planning and forecasting, based on customer insights. This enables the right volume of stock to reach the right location, thus increasing sell-through and reducing the incidence of overstocks.
Step 5 – reducing the safety stock ‘safety net’
Speaking of overstocks, the proliferation of retail channels has increased the volume of surplus stock being held, as retailers fear running out in one location. Today, typically 60% of inventory is safety stock.
With a detailed, real-time picture of activity across the entire company infrastructure, and the ability to make responsive decisions about allocation and replenishment based on demand, retailers will have less need for overstocks.
By reducing overstocks by 20%, retailers could benefit from a 2.6-4% positive impact on their profit and loss account. Meaning not only is more product being sold at full price, but a single stock pool is running leaner and reducing costly wastage.
UK retailers: are you attending RBTE 2016 on 9-10th March? Register for our free omnichannel single stock pool bootcamp to kick-start your single stock migration. Limited places available.