Challenges of using store inventory for online order fulfillment
Omnichannel retailers aim to satisfy customers no matter how they choose to engage: Online, in-store or a combination of the two.
It’s never an easy feat, as success depends upon a tightly integrated front and back end in order to provide customers a seamless, successful shopping experience.
But since reopening after COVID-19 lockdowns, many retailers have had to carefully assess how they were navigating the use of store inventory for their omnichannel order fulfillment strategies.
Inventory visibility across channels
Management of inventory is a particularly thorny issue for any retailer with an omnichannel philosophy.
The retailer must first accommodate multiple sales channels simultaneously: An online shopper must be able to “see” what products are in stock just as easily as one who is physically in the store.
Then, the retailer turns that multi-channel strategy into an omnichannel one when, for example, it allows a customer to: shop for items on a mobile device; log onto a retailer’s site hours later on a computer and access the same shopping cart; check availability online and place an order for curbside pickup.
Discrepancies in physical inventory counts
Many retailers were able to launch – and maintain – a buy online, pickup in store (BOPIS) strategy.
However, since stores reopened, inventory counts are becoming muddled as retailers had been using store inventory to fulfill online orders.
Being able to reconcile what has just been purchased online with in-store inventory – and meeting the expectations of both types of customers — is a gargantuan task.
Customers should never see an item in stock online and discover it is sold out once they reach the store.
Some of the reasons for such discrepancies include:
Shrinkage: Shoplifting and employee theft account for substantial loss of inventory. Fraud and administrative errors are also to blame.
Data inconsistency: Online ecommerce, in-store POS systems aren’t tightly integrated or are being manually updated, so floor count may be inaccurate.
Resource strain: Sales associates are performing fulfillment tasks, so they have less time to help shoppers on the sales floor locate items.
Payment timing for BOPIS orders
In addition, payment timing can cause inventory challenges. Items that are part of orders that are paid for online but picked up at a store are likely removed from inventory earlier than those that are paid at the time of pick up.
Paying before pickup not only expedites that process for ecommerce shoppers, but for those in-store as well. In-store shoppers experience longer wait times when online customers must join the line to pay and pick up their orders.
Poor fulfillment has a significant negative impact on customer retention. It is difficult to have the entire picture of what inventory is where throughout all channels.
Having accurate inventory visibility – which provides stock, order monitoring and tracking information — is crucial for a successful retail operation.
That requires a combination of technologies such as POS software tied to barcode scanners, RFID, warehouse execution software, etc.
The result is a retailer that meets, and sometimes exceeds, customers’ needs.
Read this blog and others on the RPI blog.