By Branden Jenkins, General Manager Retail, NetSuite
A retailer’s inventory is typically its top expense, and managing the right range of merchandise across channels and locations is a delicate balancing act. That balancing act only becomes more difficult when faced with today’s consumers who shop across multiple channels and have little patience for retailers who cannot meet the challenges of managing inventory and delivering real-time visibility across those channels.
That's why it is critical for retailers to become seamless organizations. However, delivering on the omni-channel experience requires a single, integrated platform that can provide global inventory visibility along with seamless order management and fulfillment processes. Nearly two decades after the emergence of e-commerce, truly integrated “bricks and clicks” businesses are the exception and not the norm.
Retailers need to quickly accommodate customers who cannot find the size, color, or variation they seek in stock at a particular location if they want to save the sale. Many retailers cannot even locate alternatives without pulling associates off the floor to manually call other locations and warehouses, never mind being able to quickly and efficiently locate the right product and have it shipped to the customer's home, work, or preferred retail location. In fact, today's savvy, data-driven consumers can often find the same product somewhere else more quickly using their smartphones than a retail associate can by conducting their own search.
Retailers do have resources at their disposal to fulfill the omni-channel promise by taking a more sophisticated approach to managing and fulfilling these orders. Heavily stocked locations are prime candidates for fulfilling out-of-store and online orders, reducing the risk of later markdowns. Accepting returns at any location, regardless of the purchase channel, also greatly enhances the omni-channel experience for customers and creates additional opportunity to strategically restock high volume locations as goods flow back into the organization.
The command to ship products from any location and accept returns anywhere cannot be built on the back of outdated, batch-processed inventory systems, however. Customer databases that fail to connect the dots between in-store buyers and online shoppers are equally inadequate. A single data source, connected across ecommerce, point of sale (POS) and mobile devices and capable of quick, real- time access, is key to the omni-channel revolution.
Omni-channel strategies are not solely driven by technology, however, and effective merchandising backed by analytical tools is still vitally important. Business rules that not only minimize markdowns, but also keep vital loss leaders or frequently bundled products on store shelves are crucial for the long-term success of an omni-channel strategy.
In many ways, this is just another variation on a familiar industry refrain: Overcome inventory challenges or die. Without a modern, real-time and technologically advanced omni-channel strategy, satisfying customers is all but impossible.