Solving the oldest challenge in retail: the pursuit of inventory visibility
By Radcliffe Cole, SVP of Consulting & Solutions
One of the biggest challenges that the retail industry faces centres on inventory visibility. Before the industrial revolution, supply chains were largely local in scope. The centuries unfolded alongside technological advancements, making it possible to manufacture, market, and ship products on a global scale.
Possible, but challenging to fully realise and manage. That’s because even with the abundance of available technology, many retailers still struggle to accurately determine what stock is available for sale and where it is located.
There are multiple root causes of this challenge. Fortunately, there are ways to thread a retailer’s operation together to achieve 360 inventory visibility, a single view of stock.
Let’s first unpack the root causes of the challenge.
When it comes to inventory management, it encompasses much more than ensuring stock availability. Retailers face multiple inventory challenges, which include unexpected spikes in demand, production delays, supply chain disruptions and supply chain shortages.
More than 75% of retailers experience supply chain disruptions at some point, which heavily impacts inventory availability. It’s impacting consumers’ attitudes and how they feel about retailers who are experiencing shortages. In a survey by Chain Store Age, 61% have felt frustrated, 46% impatient, 45% anxious, and 34% angry.
Inaccurate or ineffective forecasting and planning processes further contribute to inventory shortages. It’s responsible for retailers losing up to 30% on potential sales, according to the IBM Supply Chain Insights with Watson. Regardless of the size of a retail business, these challenges are universal and must be addressed to not only maintain operational efficiency but also transparency with customers.
Here are the core roots of the problem:
Legacy systems: traditional enterprise resource planning (ERP), point of sales (POS), and warehouse management software (WMS) systems have in general remained unchanged for over 30 years, primarily serving as financial systems of record.
Infrequent updates: lack of real-time communication between order capture and sales systems hampers stock accuracy, with most businesses relying on 1-2 updates per day.
Stock master fragmentation: retailers often lack an aggregated stock master, leading to a lack of visibility across different channels and fulfilment processes.
Thin stock lines and asset tagging: some businesses hold low volumes of stock to keep warehousing costs down while insufficient asset tagging naturally hinders accurate tracking.
Legacy operating procedures & channel conflict: regular stock takes and conflicts over stock allocation among different channels (such as ecommerce, retail, wholesale) present challenges.
To resolve these conflicts, retailers can invest in the right technologies and encompassing strategies to create a single view of stock.
Single view of stock
A single view of stock refers to a unified and real-time understanding of inventory across various channels and locations. Retailers can see all stock information across physical stores, distribution centres, and online channels.
Enabling a single view of stock requires retailers to implement and manage digital technologies and data integration in order to power consistent stock data, in real time, all throughout the supply chain.
Achieving a high level of accuracy, which is generally set at a minimum of 98%, is essential for effective inventory management. This unified view allows retailers to optimise their operations and customer experiences.
Our research of the retail landscape highlights the difficulties involved in creating inventory visibility. For small retailers with a single store and website to achieve a single view of stock, it must navigate complex processes, such as running reports from its ecommerce store and point of sale (POS) systems, guessing stock in transit, and dealing with inaccurate inventory updates.
For large national retailers with no single view of inventory, we see that they struggle with multiple and continuous issues with inventory accuracy. This is due to siloed and infrequent updates between web and POS systems. This leads to failed picks, customer service inquiries, and in general a poor customer experience. Outdated in-store tooling further complicates the process of fulfilling web-originated orders from retail stores.
When retailers generate a single view of stock, the customer experience is exceptional. Here are two examples:
The product page for Dune’s flatform trainers showcases rich imagery along with customer reviews of the product, the colours and sizes that are available, and the ability to check the stock in their local store. This gives customers all key information about the trainers and whether they prefer to buy online or visit to store for purchase.
The product page for Zimmermann’s luminosity ruffle gown has all the ingredients needed for a single view of stock. Built into its clean and stylistic interface are the capabilities for customers to have 360-views of the product, which sizes and colors are available, the ability to find the product in a store, and how to contact the brand for further assistance. The customer service team will be equipped with the relevant stock data to help customers with issues around availability and placing orders.
So, what is the current state of single view of stock across retail? A report by Retail Week found that 49% of retailers have a single view of stock in real time, up from 40% in 2022. The same amount of retailers have a single view of stock but not in real time (29%).
With just over half of all retailers failing to have a single view of stock in real time, there is still some way to go before we see full market coverage. Those that are able to see the full picture are receiving the key benefits.
Key benefits of a single view of stock
Enhanced customer experience: providing choice and convenience during the discovery phase of the customer journey significantly influences conversion rates.
Improved internal operations: equipping staff with the ability to assist customers in person, over the phone, or on social media leads to better service and increased sales.
Loyalty and reliability: maintaining reliable and always-available inventory fosters customer loyalty, encouraging repeat purchases.
Margin optimisation: accurate inventory visibility enables merchandisers to identify underselling or overselling scenarios, ensuring optimal stock levels, and avoiding order cancellations.
Real-time inventory decision making: accurate and up-to-date inventory data across all channels and locations empowers businesses to make more informed decisions and future demand planning.
Reducing cost to serve & sustainability: with high demand in the UK for warehouse space, retailers can utilise their stores as fulfilment centres, helping to reduce cost to serve, offer quick delivery options, and also reduce their carbon footprint.
How Tryzens empowers a single view of stock
Tryzens offers expertise in order management and provides solutions to address the inventory visibility challenge, enabling retailers to achieve a single view of stock. Because we develop and implement tailored solutions for each of our partners, our platform-agnostic approach means that we fit the retailer with the right technology, not force the technology on the retailer.
Tryzens provides high-level OMS consulting and strategy insights to set the foundations for tailored solutions. We also carry out OMS implementations using some of the best-of-breed platforms on the market, including Fluent Commerce, NewStore, OneStock, and Salesforce Order Management.
We’re currently helping a global specialist in fashion footwear and accessories develop its order management capabilities. It operates a national network of stores and sells across other channels: dropshipping, concession, marketplaces, and wholesale. This set-up puts particular focus on the brand’s omnichannel strategy and international growth.
The well-known brand partnered with Tryzens to implement an order management system that would provide:
Increased product utilisation
Lower cost to serve
A single view of inventory across its touchpoints
Improved customer experience that could drive loyalty
Our approach to the OMS project involves two phases: consulting on high-level business requirements and a detailed discovery.
Tryzens consulting involves helping to shape the OMS business requirements and understand the capabilities of suitable OMS vendors. We also executed both request for information (RFI) and request for proposal (RFP) processes, enabling downselection and award to the appropriate vendor.
In the second phase, Tryzens led a detailed discovery by gathering low-level functional requirements across OMS-related business processes, operations, project and change management, ecosystem and integrations, order orchestrations and servicing.
When retailers are able to overcome the long-standing challenge of inventory visibility, they can drive their organisations toward greater operational efficiency and improved customer experience, key levers of revenue growth in the current business landscape.
With the right strategy in place, powered by the best-fit technologies, retailers are able to see the full view when it comes to stock, helping to solve one of the oldest problems in retail. If you’re looking to implement a new OMS or optimise your current one, connect with Tryzens.
Share on social