By Prashant Ganti, Head of Product Management, Zoho Finance and Operations Suite
Over the past decade, consumer expectations regarding convenience have skyrocketed and businesses responded by providing an omnichannel buying experience. Instead of limiting themselves by selling their goods in a physical store or through a website, businesses needed to allow customers to purchase goods from multiple platforms including physical stores, websites, marketplaces like Amazon, and more. This evolution has enabled customers to shop from multiple places, while businesses expanded their reach to multiple channels.
Furthermore, customers expect faster delivery timelines. While rapid deliveries ensure customer satisfaction, businesses endure a lot of stress on downstream systems, particularly inventory management. For emerging businesses, setting up and maintaining these systems can be overwhelming.
Added to this, the shifting trend towards data-driven decision-making means businesses need an efficient system in place to manage stock, handle sales and purchases, forecast demand, and satisfy customers. This is where a robust inventory management system comes into picture.
Here’s how an inventory system can help businesses achieve a complete omnichannel experience.
Consumer experience is the key
Customers expect a frictionless sales experience. This involves treating every customer touchpoint as a whole entity. In the current scenario, businesses encounter diverging customer touchpoints, including social media, websites, chatbots, mobile apps, and retail outlets. Ensuring the seamless transition between one touchpoint and the other becomes paramount.
While this omnichannel strategy increases customer convenience, every channel operates independently and has its own restrictions. Businesses need to maintain consistency across touchpoints, tailor a personalized shopping experience, enable real-time inventory visibility, and fulfill orders through customer-preferred options. A simple example could be the tendency of customers to check if the product is available in a particular store before visiting it. Without proper investment in technology and dedicated planning, businesses can mess up customer-centricity.
Handling inventory in transit
Today, businesses need to meet customer expectations in a fast, reliable, and flexible way, while optimizing operations and maximizing profits. Leveraging in-transit inventory can play a significant role for businesses in achieving this omnichannel experience.
In-transit inventory refers to the goods transported from one location to another. This can include movement between distribution centers and stores or even to customers’ doorsteps. Maintaining in-transit inventory enables businesses to widen their product outreach by offering items online even if they aren’t readily available in every store. By tapping into inventory en route, businesses also get to save on last-mile delivery costs and ensure faster delivery times.
Putting a robust system in place to effectively utilize and manage in-transit inventory can help businesses minimize excessive inventory costs and ensure transparency throughout the system. This can include transferring stock from one location to another based on demand and initiating order fulfillment from the nearest location.
Insights into inventory across stores and channels
One of the foundational aspects of delivering a satisfying omnichannel experience lies in real-time inventory visibility. Customer expectations begin from product availability and go beyond fulfillment speeds. As businesses expand sales, the complexity of managing inventory multiplies. Without visibility, order accuracy and completion become a guessing game.
A rightly-aligned inventory management system helps businesses stay on top of their inventory levels without worrying about updating stock manually across their stores and website as they make sales. With strategies like BOPIS (Buy Online, Pick Up In-Store), item reservations, and multi-channel inventory allocation coming up, a well-executed inventory management strategy becomes critical for scaling businesses.
Order fulfillment is equally critical
“When our grandfathers owned shops, inventory was what was in the back room. Now, it is a box two hours away on a package car, or it might be hundreds more crossing the country by rail or jet, and you have thousands more crossing the ocean.”
This quote from the then-UPS CEO, referenced by Thomas Friedman in his book “The World is Flat,” epitomizes the globalized world view at that point in time. There’s an evident monumental shift in how businesses view and manage inventory. This shift is largely due to the omnichannel experience that gradually transcends the boundaries of inventory and order management. Today, businesses need to consider multiple networks of goods, be it in transit, in warehouses, or even in production, for sales.
Unifying the shopping experience online, via mobile, or in-store requires an interconnected inventory landscape that can promise consistent customer deliveries. An efficient inventory management system can help businesses gain visibility over a shipment thousands of miles away and ensure every aspect of the item journey is accountable.
While focus has shifted to nearshoring in the recent past, the fact remains: consumers require an option to purchase from any channel and the variance in fluctuation of goods is more than it was. It is imperative for businesses to have real-time inventory visibility and manage omnichannel experiences profitably. Businesses need to have efficient systems in place to maximize sales and address the growing demand better.
Friedman (2005, p. 174)