For a shopper, there’s nothing more frustrating than walking into a store to purchase an item featured online, only to find out it isn’t available. Nine times out of ten, that shopper will just go to another store to buy the item they want. For the retailer, an insufficient inventory management system means more than just one lost sale.
- The retailer also loses the opportunity to cross-sell or upsell
- The shopper could have a diminished perception of the retailer and may not return to make future purchases
Retailers can dramatically improve their ability to make customers happy by getting them the items they want – regardless of the channels they prefer – by moving to a single stock pool model of inventory management.
What is a single stock pool?
The concept of a single stock pool is not new, but some retailers have struggled to implement it. It basically means that rather than reserving stock for individual channels (i.e., in-store or eCommerce orders), all products are available on a first come, first served basis, to any shopper on any channel who requests them.
Let’s say it’s the holiday shopping season and smartwatches are selling fast. Rather than dedicating a certain amount of stock to each channel, a retailer could fulfill orders for smartwatches from anywhere as they come in. If online shoppers are looking for smartwatches, you can fulfill those orders from all warehouses and even from stores. If a store runs out of stock, the item can be ordered for store pickup or delivery directly to the shopper.
For the retailer, not only does a single stock pool help solve the problem of running out of inventory, but it also helps reduce the amount of safety stock required to cover cycle times reducing total stockholding by as much as 20%. The benefits can be significant: customer service can be improved at the same time inventory investment is reduced.
Successful approaches to single stock pool
Successful implementation of a single stock pool in an omnichannel environment requires a comprehensive approach covering many parts of the business, including:
- Merchandise planning
- Weekly sales and stock intake
- Planning and demand forecasting
- Pre and post-allocations
- Warehouse management
- Imports management
- Distributed order management
- Returns management and reintegrating stock
To successfully implement a single stock pool for inventory management, you need real-time visibility of your business’s inventory available in all locations and channels. Inventory management solutions that integrate with your enterprise resource planning (ERP) and point of sale (POS) systems can deliver the visibility you need.
Retailers of all sizes should evaluate their omnichannel roadmap and look very closely at their inventory management capabilities. From there, they can put the technology solutions in place to use network-wide visibility to its greatest effect; allocating, distributing, ordering and replenishing stock in a manner that gets the right product to the right customer every time, however and wherever they shop.