Today, shoppers can get any product they want almost as soon as they want it. In fact, Amazon reported that it achieved its fastest Prime speeds in Q2 2023, with over half of Prime members in major U.S. cities receiving orders the same day or next day. According to the report, these delivery times are four times faster than they were in 2019.
As e-commerce delivery times continue to improve, the value of brick-and-mortar retail becomes even more critical., Even with same-day delivery, visiting a local store can still result in quicker fulfillment, but only if the store has exactly what the shopper wants.
Therefore, it's essential that brick-and-mortar retailers have the products their customers need, when and where they need them. This involves an advanced understanding of a store's inventory and the connectivity of nearby warehouses and fulfillment centers, which in many cases are the retailer's stores.
Let's dive into the best practices for meeting local fulfillment demands and how store inventory management technology helps physical retailers keep up with ever-improving online delivery options.
The Global Inventory Challenge at a Local Level
Recently, IHL Group studied out-of-stocks from the customer and retailer perspective. They measured how frequently customers visit local stores in their communities looking for something but were unable to find it, as well as how often retailers were using discounts to reduce excess inventory, avoid spoilage and sell-through off-season products. IHL Group referred to this crossroads of negative customer and retailer inventory experiences as "inventory distortion."
The firm's research report, Retail Inventory Distortion Study, the Good, the Bad, and the Ugly, stated that, "In 2023, the total cost of inventory distortion is projected at $1.77 trillion, with out-of-stocks accounting for $1.2 trillion and overstocks totaling $562 billion." The report cited vendor issues and theft from employees and consumers, and bad inventory data systems as major drivers of this growing inventory shrink. In fact, poor internal processes and internal data system issues were attributed as the cause of $412 billion in inventory distortion.
How Real-Time Inventory Management Technology Can Help
One way to combat inventory distortion and improve the availability of stock at local stores is to take a holistic, data-driven approach to inventory management. This involves both advanced data-driven technology and employee training.
Oftentimes, inventory management is conducted in silos with store managers reviewing inventory at their location, and headquarters reviewing ERP systems at a high-level. This leads to inventory management errors and a disjointed view of overall inventory across the organization.
Additionally, many inventory disruptions are caused by human error when an employee is not trained properly on using the right systems to manage and report stock status to corporate. For example, imagine a store in Chicago is running low on a jacket that a Minneapolis store has in excess. Headquarters may not have a comprehensive view of where products need to be and when because an employee in either store might be unsure how to respond to the situation. This could result in shoppers in Chicago leaving empty-handed while the Minneapolis location might have to discount the jackets to move through the extra inventory, decreasing margins.
To avoid this problem, retailers should strive to implement an in-store system with an integrated and easy-to-use inventory management platform that allows for real-time data exchanges at both the corporate and store levels. This technology ensures that the central system effectively represents what employees and shoppers see on the shelf, while eliminating the risk of conflicting data entries.
Automate Key Inventory Processes With GK
Achieving a full view of inventory includes a lot of moving parts like stock transfers, returns management and more. With GK's Store Inventory Management solution, retailers can track all movement within their stock with ease.
The solution offers a detailed inventory intake that stores all reference documents for products, receipts and returns. Better yet, since it is integrated to GK OmniPOS, inventory activity can come from any in-store touchpoint including mobile devices, increasing the efficiency in which store employees update inventory information. The solution also manages unexpected inventory issues like recalls, last-minute reallocations, emergency orders and defective product support.
With this enhanced level of accuracy in real-time inventory reporting, retailers can also begin to rely more heavily on AI-based forecasting and replenishment technology. These tools base their decisions off of data, and the more accurate the data is, the more the technology can positively impact the customer experience. Finally, with mobile reporting capabilities, response times improve, leading to fewer last-minute inventory challenges.
In addition, if a disruption in the supply chain or a sudden change in regional demand does occur, GK's platform helps retailers make quick adjustments to the inventory strategy that limit the impacts of the disruption.
Get Started With Enhanced Inventory Management Today
By unlocking store-level process support, retailers can rest-assured that each store is appropriately stocked based on the supply and demand needs of the regional customer base. In addition, if a disruption in the supply chain or a sudden change in regional demand does occur, GK's platform helps retailers make quick adjustments to the inventory strategy that limit the impacts of the disruption.
Are you ready to take your store inventory management to the next level and compete with the rapid fulfillment timelines of needed to win over shoppers today?
Reach out to us today to learn more about GK's Store Inventory Management solution.
