How to Leverage Stores as Your Primary Inventory Management Asset
Ironically, as commerce increasingly moves online, physical stores actually are becoming more strategically important. Why? Managing complex distribution networks becomes even more challenging with the increase in sales channels, increased rates of returns and demanding fulfillment expectations. Retailers are starting to leverage their physical stores as the warehouses and distribution centers of the future – reducing inefficient inventory management practices of old.
Leveraging stores to win
To keep up with Amazon, not only in commerce but in the supply chain, retailers need to invest in omnichannel solutions that provide complete inventory visibility across the enterprise. It means eliminating the silos of years past and allowing for a better customer experiences. They’ll need to provide customers with all possible fulfillment options, start leveraging their physical stores as distribution centers, and manage returns much more efficiently. This allows customers to shop and receive goods how they want, when they want, while boosting business outcomes across the board.
The idea behind omnichannel retail is to allow consumers to shop however and whenever they want. But actually having that product in hand is the essential final step to complete the process, so allowing shoppers to not only shop, but also fulfill their online orders in store is critical. The same goes for shoppers who like to browse in store. If their preferred size, color, fabric or any other desired characteristic is unavailable in the store, the store associate can leverage real-time inventory visibility through their order management system to reserve and deliver the item to any location the customer wishes.
Allowing for an omnichannel returns process will help you realize many of the same benefits as your omnichannel sales process. This includes improving customer satisfaction and loyalty.
While Amazon is one of many retailers who have launched a network of drop-off lockers at convenient spots in cities and towns, the store continues to be a more complete option. What if the consumer wants to exchange the item? What if they’re hoping to use store credit or even a cash reimbursement to buy another item on their wish list? A pick up locker is a good start and a convenient option for many, but doesn’t allow a retailer or a consumer to take advantage of any other part of the retailer’s value proposition. If the consumer wants to select another color instead, the pickup locker cannot accommodate, and certainly does not provide that immediate satisfaction.
Beat return woes
To manage the unpredictable flow of returned inventory at a particular store, a robust omnichannel order management system is critical. Returned items may or may not have value in the short-term. If they are in good resellable shape, then the order management system lets you bring that item back into the inventory pool, and even reshelf it immediately. The faster an item is put back on the shelf, the higher the odds that it will be resold. Doing this effectively takes away some of the pressure to discount the merchandise, and improves a retailer’s efficiency.
Beyond the returned item itself, many in-store returns are an opportunity for another sale. Many consumers will browse, elect to buy another product, or get a replacement product for the merchandise they returned (wrong color, size, version, etc.). In these cases, encouraging the customer to browse, or select the product they really wanted or needed, makes sense. If the return was a good experience, the vast majority of customers will purchase from that retailer again.
Consumers demand flexible fulfillment and return options. Retailers need to offer maximum convenience and personal connection to shoppers to compete in today’s environment. Use stores as the lynchpin to your omnichannel sales strategy, supported by powerful order management technology, and you’ll be on your way to an efficient and successful 2017.
-Nick McLean, CEO, OrderDynamics