The world of commerce is an ever-changing one. Tech developments such as 5G and the Internet of Things are reshaping everyday life. And that includes how we all shop. Customer support is evolving with social media, artificial intelligence and unified communications.
That’s a lot for any eCommerce business to keep up with. Some things, though, will never change. That includes the importance of robust inventory management to retail. Being able to get the correct products to your customers is fundamental to success. Ensuring you don’t fail at order fulfilment begins with understanding your inventory and supply chain.
In an increasingly complex eCommerce world, keeping track of inventory is tricky. Many brands are turning to omnichannel inventory management – also known as multichannel inventory management – to meet the challenge. We’re going to share five tips to help you make omnichannel inventory work for you. In doing so, we’ll cover:
Image Source: Fit Small Business
That’s the difference between omnichannel and multichannel retailing. Omnichannel is a unified process whereby every platform is a part of a seamless whole. The benefits for consumers and brands are clear.
Consumers get to shop and interact with firms how and where they wish. The brands, in turn, can excel in the areas of customer satisfaction and retention. That’s not to mention the cost savings inherent in more effective inventory control.
It’s not a simple case of deciding to take an omnichannel approach, however. There are a range of omnichannel challenges and obstacles a brand must overcome.
Image Source: Talking Logistics
Having siloed supply chains and systems is a recipe for disaster. It can cause several issues:
Image Source: Finances Online
When orders get placed - no matter the channel - stock and other figures get updated in real-time. Everyone in your organisation, therefore, can have confidence in the data they access. That’s even if the orders got placed in a different country or via a less popular channel.
For many brands, the first step to true omnichannel inventory management is finding the right platform. Leverage truly integrated omnichannel software, and you’re half-way to success.
Image Source: Statista
Improve your reverse logistics, and you’ll also boost overall omnichannel inventory management. Items returning to you from customers, after all, still form a part of your inventory. They’re still products you need to manage effectively.
The best way to start in this area is to give returns the respect they deserve. Don’t think of then as an afterthought or a regrettable symptom of selling online. Establish a fair and transparent returns policy. Then, publicise the policy to your customers.
Your aim is to make returns as straightforward and organised as possible. That may mean asking customers to message an address with a given sales email subject line. That way, correspondence about returns can sync up with a customer’s original order. Refunds or replacements are then infinitely easier to manage.
Making it simpler to handle returns is good for customers and retailers alike. Globally, on average, 15% of consumers will abandon a brand after a bad returns experience. Improve reverse logistics, and you’ll also give customer retention a welcome boost.
- Cross-channel integration
- Clear data visibility
- Smart warehousing
- Returns policies & processes
- Customer experience & satisfaction
What is Omnichannel Inventory Management?
Modern brands know it takes more than a reliable product at a reasonable price to impress consumers. Many firms are now focusing on making customer experience their principal differentiator. That means excelling in every interaction a company has with its customers. Providing excellent customer experience also means meeting customers where they are. Companies must sell their products and make customer support available via many channels. Modern consumers want to use different devices and buy through various platforms. It all depends on what’s most convenient for them at any given time. eCommerce brands, then, must reach customers via a range of channels. It’s no longer sufficient to try to funnel all customers to a single website. So, is listing products for sale on multiple platforms the definition of omnichannel? Unfortunately, it’s not that straightforward.Omnichannel Vs. Multichannel Retailing
If you sell on Amazon, your own website, and via other channels, you’re a multichannel retailer. You’re not necessarily succeeding at giving an omnichannel experience, though. Omnichannel is about providing a seamless customer experience, no matter what. Customers must always get the same high-level interactions. That's regardless of the device they use or platform through which they buy. Omnichannel inventory management is a vital element of ensuring precisely that. It’s the process of monitoring and managing all inventory across every channel that you use. More than that, it means doing so accurately and in real-time. That's in order to maintain excellent customer experience across the board. A brand must excel at omnichannel order management, warehouse management, and more. Every aspect of the supply chain has to get tracked and handled efficiently. All sales from all platforms must get accounted for in good time.Image Source: Fit Small Business
That’s the difference between omnichannel and multichannel retailing. Omnichannel is a unified process whereby every platform is a part of a seamless whole. The benefits for consumers and brands are clear.
Consumers get to shop and interact with firms how and where they wish. The brands, in turn, can excel in the areas of customer satisfaction and retention. That’s not to mention the cost savings inherent in more effective inventory control.
It’s not a simple case of deciding to take an omnichannel approach, however. There are a range of omnichannel challenges and obstacles a brand must overcome.
What are the Obstacles to Omnichannel Inventory Management?
Managing omnichannel inventory is a tricky business. When you sell via many channels and platforms, there are a multitude of aspects to reconcile. It’s not easy to track orders from many sources or to keep stock levels accurate at all times. The following are some of the most notable omnichannel challenges.1. Siloed Supply Chains
Most retailers begin selling via a single channel. Perhaps you started out as a brick-and-mortar store. Maybe you began selling your wares on eBay or another third-party platform. It’s as any brand adds new channels that the difficulties can arise. Too many companies fail to appreciate the importance of unifying the channels. That’s not just to inventory management, but other processes as well. Fail to connect your systems, and you end up with siloed supply chains. That’s where order and inventory data for one channel is entirely separated from that for the others.Image Source: Talking Logistics
Having siloed supply chains and systems is a recipe for disaster. It can cause several issues:
- You won’t know precise stock levels for your whole organisation
- You might double up on purchase orders
- You may have to cancel orders as some customers won’t get updated on out of stock lines
2. Accuracy, Tracking & Visibility
As a business expands across channels, visibility is harder to maintain. If you have one store, one warehouse, and one till, tracking orders and stock levels is straightforward. Introduce more sales or storage locations, and it’s a more significant challenge. Many brands fail to recognise the importance of visibility. It’s a severe barrier to omnichannel inventory management. If a brand doesn’t have a centralised system to track orders and supply chains, accuracy will suffer. Fail to account for that big order on the Facebook Marketplace, and you’ve got far less stock than you think. Don’t update everyone on the arrival of a delivery, and your office may reorder tomorrow.3. Demand Planning & Stock Levels
Strong omnichannel order management isn’t only about accurately tracking present circumstances. It also helps businesses to forecast future consumer demand. Only by knowing what you’re selling via all channels can you fully grasp customer needs and desires. Such demand forecasting is vital to omnichannel inventory management. It’s how you ensure you’re not left with dead stock. In the same way, you can also make sure you don’t have to turn down orders because of an empty warehouse. Getting stock levels wrong in either of those ways is costly. Such mistakes, however, get more likely as you introduce more channels. Your supply chains, after all, are unavoidably less straightforward. That is if you don’t implement a suitable omnichannel system to manage them.4. Systems & Tech
Responding to new consumer demands is often about leveraging the right technology. Live chat software, for example, is essential to modern customer support. In the same way, a cutting-edge solution can revolutionise your inventory management. Many firms, though, lack the correct tools and systems. Without the right software, omnichannel inventory management is almost impossible to achieve. Try to track orders, deliveries, and more using a collection of spreadsheets, and you’ll see what we mean. Leveraging the correct solution, meanwhile, brings many advantages. As well as integrating diverse channels, the best tools can also use AI to transform workplace processes. Through AI-driven automation, you can boost the productivity of your entire staff.Strategies to Improve Omnichannel Inventory Management
That’s the most significant omnichannel challenge dealt with. Now, let’s turn our attention to what you can do to overcome them. How can you introduce omnichannel inventory management that delivers seamless customer experience? By adopting some – or all – of these omnichannel inventory tips.1. Cross-Organisational Integration
Omnichannel retail is all about unifying your processes, channels, and operations. It pays, then, to consider inventory management as one crucial part of a greater whole. It’s a vital element of your wider business. As such, it needs to integrate and work with other, equally essential aspects. As well as unifying sales channels, you must also link inventory management with your other systems. Order and CRM systems must, for instance, integrate with your inventory management system. That’s how you can be confident that the stock levels on that system will be 100% accurate all the time. Integrations with other solutions are also invaluable. Linking up your inventory management and contact centre software is a prime example. Do so, and your service agents have more information at their disposal to assist callers. They could, for instance, check stock levels before suggesting replacement products.2. Clear Data Visibility
Introduce a truly integrated inventory management system, and it’s also easier to achieve better data visibility. Such a system, after all, centralises all your inventory data. Through one platform, you can view and analyse all data on sales, suppliers, and more.Image Source: Finances Online
When orders get placed - no matter the channel - stock and other figures get updated in real-time. Everyone in your organisation, therefore, can have confidence in the data they access. That’s even if the orders got placed in a different country or via a less popular channel.
For many brands, the first step to true omnichannel inventory management is finding the right platform. Leverage truly integrated omnichannel software, and you’re half-way to success.
3. Smarter Warehousing & Stock Management
With the insights afforded by using the right omnichannel inventory management software, you can also make further changes. You may, for instance, find that you want to alter how you warehouse your product lines. Your traditional locations and methods may not best suit an omnichannel retail future. Embracing new channels could introduce your products to a broader audience. You may need new warehouses or distribution centres to serve those customers. If your business is going to scale, you won’t be able to ship online orders from your store’s backroom for long. It’s also essential that you can easily re-attribute stock if needed. Take, for instance, a firm that sells trainers via Facebook, a website, and a brick and mortar store. They might run a killer marketing campaign for Facebook users. Their trainer sales via that channel may skyrocket. Now imagine the company’s inventory. It’s possible that they earmark a certain amount of stock for each channel. In the circumstances described above, they need some flexibility. They’ll want to make more stock available for sale on Facebook. It’s that channel, after all, where there’s increased demand.4. Don’t Treat Returns as an Afterthought
So far, we’ve focussed on processes often placed under the umbrella of logistics. Now, it’s time to start thinking about reverse logistics. That’s the processes and operations related to returns and refunds. They’re vital to eCommerce, as return rates are always high for online retailers.Image Source: Statista
Improve your reverse logistics, and you’ll also boost overall omnichannel inventory management. Items returning to you from customers, after all, still form a part of your inventory. They’re still products you need to manage effectively.
The best way to start in this area is to give returns the respect they deserve. Don’t think of then as an afterthought or a regrettable symptom of selling online. Establish a fair and transparent returns policy. Then, publicise the policy to your customers.
Your aim is to make returns as straightforward and organised as possible. That may mean asking customers to message an address with a given sales email subject line. That way, correspondence about returns can sync up with a customer’s original order. Refunds or replacements are then infinitely easier to manage.
Making it simpler to handle returns is good for customers and retailers alike. Globally, on average, 15% of consumers will abandon a brand after a bad returns experience. Improve reverse logistics, and you’ll also give customer retention a welcome boost.
5. Always Think About Customer Experience & Satisfaction
It’s easy to think about omnichannel inventory management as a backend process. You might get tempted to believe it’s not a customer-driven aspect of your business. You’d be wrong. When seeking to improve inventory management, you must always think of consumers. Employing digital marketing tricks can help with customer acquisition. Being customer-centric, though, is what drives retention. It’s the same when it comes to omnichannel inventory management. Improving practices and systems will make a difference. Tying all improvements up with an aim to boost customer experience is what can take your brand to a new level. All our prior tips should feed into this final idea. You must design your system integrations with the goal of making customers’ lives easier. You should create your returns policy to the end of keeping consumers satisfied. Tailor and improve your omnichannel inventory management with customers foremost in your mind. It's then that you’ll reap the rewards.How to Get Started with Omnichannel
You should hopefully now understand the importance of omnichannel inventory management. We’ve also given you some big picture ideas about tactics for improving your firm in that area. Now, you’ll want to know how to take your first strides toward better omnichannel inventory management. The following are some straightforward steps to get you started:- Take inventory of your inventory. Before you can begin improving any system, you need to know where you stand. Take a step back and analyse your current inventory management. Think about your inventory, how your supply chains operate, and what you do to track stock
- Assess your omnichannel software options. You should now have an idea of the areas where the most improvement is possible. With that in mind, assess the different inventory management solutions on the market. Find the one that will make the most difference to your company
- Keep the customer in mind when rolling out new systems. When you implement a new solution, make sure you’re not changing for change’s sake. Every tweak you make should work toward the end of improving customer experience. Remind yourself of that throughout
Omnichannel is the Future of Inventory Management
Companies who stand against the tide of changing consumer demand get washed away. You must adapt to give customers what they want. Today, customers want seamless experiences across devices, platforms, and channels. That’s why omnichannel inventory management is critical. If you’re going to meet consumers where they are, you must have the systems to cope. With the right software omnichannel inventory management is possible for any brand. Keep your customers in mind throughout, and you can start your journey to efficient omnichannel retail today.Bio
Sam O’Brien - RingCentral UK Sam O'Brien is the Senior Website Optimisation & User Experience Manager for EMEA at RingCentral, a global UCaaS systems provider. Sam has a passion for innovation and loves exploring ways to collaborate more with dispersed teams. He has written for websites such as No Jitter and Hubspot. Here is his LinkedIn.