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The Increased Importance of Inventory – How Owning Stock Improves Customer Experience | Bidder’s Bites

Smart brands manage the customer experience during the flow of seasonal or unexpected trading shifts. Real-time inventory visibility, analytics, and educated planning allows businesses to deliver a consistent customer experience, whilst managing inventory during spikes in demand.

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From the dawn of time, commerce – or trading – had existed in some form or another, the bedrock of which is supply and demand.  There are many examples of this in the wild. Caterpillars that secrete nectar to attract ants, who eat the nectar to protect themselves. Small fish clean bigger fish and give certain ones (their clients) a priority service compared to others.

And humans are no different in this basic essence: when we have a desire for an item or service, we seek out a reliable business that can provide it for us. But the world for humans has changed immeasurably. Long gone are the days when you would use a land-line to call a business to see if they had something in stock, use teletext to get the latest holiday deal before it was unavailable, or indeed look through the Yellow Pages to find “other similar businesses”.

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Instant gratification

With the advancement of the digital world, we all rushed to unlock pandora’s box, to see what beauty it held within and the benefits it can give us as individuals. And the benefits have been plentiful but have come at a cost. The cost is the change in how we react as personalities.

We are now expectant of instant answers, quality customer service and contextual experiences, all of which have put a huge economic and operational burden on the businesses that exist today, especially those that have had to adapt to the new way of engaging with a customer in the digital age.

The advent of faster mobile data services and improved capabilities of mobile devices has helped to fuel the desire to be able to “reach out” at any point to anywhere in the world and find what you are looking for, from brand information, to product pricing to reviews, everything we want to access is there, right there, at the touch of a screen or voice search.

A core area of the industry that is most visibly impacted by this is retail, and one of the areas that needs addressing and urgent attention for many brands is inventory.  For years we kept talking about the age of mobile – which had many false starts as we know – but eventually took off, and we realised that we could use these devices for much more than texts, calls and playing snake.  We could now interact with our favourite brands and shop right there and then. Utopia, right? Wrong…

Leveraging inventory for loyalty

This kick-started a spiralling issue for brands: loyalty. How would brands keep their customers loyal? Price played a big part, but so too did customer service and customer experience, with inventory being a key part of being able to maintain that experience. And the importance of this aspect is as vital to loyalty now as it has ever been.

Early movers such as Schuh understood the importance of this. If they did not have your shoe size or type in store but had it somewhere else, then it would be shipped free of charge to any mainland UK address for your convenience.

And Schuh continued investing in this area of customer experience. Next-day delivery six days a week is now driven by a warehouse that can pick 12,000 items an hour while its analytics tracks KPIs for delivery, delivery accuracy, and a nimble replenishment model that helps stores to stay stocked. They also fulfil orders from store so customers can reserve shoes online and pick it up in store just 20 minutes later.

Increased expectations

Whilst the likes of Schuh were raising the bar through stock visibility and fulfilment options, many others could not adapt. They were and probably still are using spreadsheets, siloed systems, ERPs that have been “bastardised”, and maybe even paper-based in-store stock checking. Essentially, this means that they are failing to give an honest and truly convenient customer experience to their client base, which spells disaster in the age of fickle consumer loyalty.

The age of Amazon Prime and Click-and-Collect means consumers are expecting stock visibility on any device, fast fulfilment, transparency throughout the entire fulfilment chain, and easy returns. Remember that the cost of retention is significantly lower than the cost of acquisition.

Is this a make-or-break in terms of staying ahead of (or even in-line with) the competition? In a nutshell, yes. It is not the only area to consider, but it is a significant one that is seemingly overlooked or misunderstood by many. Stock visibility is crucial, and if you are not owning the customer experience by managing your inventory and offering full visibility of stock and fulfilment, you can be sure one of your competitors will be. They now own your customer.

A survey of Gen Z consumers found 60 percent always or sometimes check a store’s in-store inventory availability online before going to make a purchase. Twenty percent, however, said they would never shop at the retailer again if a website said a product was available in-store and then found that it was out of stock.

Cross-channel consistency

A clear omnichannel customer experience should allow customers a frictionless, consistent experience on any channel or device. Customers use various digital and physical channels during the buying journey, and it’s vital that these mirror one-another. This can be extremely difficult for many businesses as their data is not available in a single pool, but more spread across solution throughout their digital estate, making it hard to impossible to be able to give a real-time view of inventory at any given time… which is the holy grail for many a business

Traditionally, one of the reasons consumers visit brick-and-mortar stores is for a higher quality of customer service. However, inventory can be an issue for physical retailers, increasingly as many stores diversify their product lines and offer in-store experiences, with shelf space at a premium.

But a lack of in-store inventory shouldn’t mean a lost sale. This is where the likes of Schuh lead the way. Aligning in-store technology or mobile sites and apps with inventory management systems provides customers ample opportunity to purchase their goods. It’s an opportunity to offer fulfilment options – pick up in store, free speedy delivery – and make buying frictionless and attractive, as opposed to the customer leaving the store and finding a competitor.

Businesses are investing in sending real-time store stock feeds to their EPOS systems, drawing this together with their other physical stores, and creating an inventory matrix that allows for optimal stock fulfilment and customer satisfaction. This is where, as I referred to earlier, the human traits we deal with in the digital era are so expectant of this instant gratification and consumers feel that they are owed this by right, so we are judged constantly on our abilities to keep meeting and exceeding these ever-growing expectations.

What does the customer need?

Let’s not forget online and mobile shoppers, who’ll be comparing like-for-like products on various sites and are looking for instant gratification. Differentiators here will be price, availability and fulfilment options. This is where retailers need to display their inventory, create urgency if possible, and highlight fulfilment, loyalty or discount options to stand out from the crowd.

On the front end, AI-driven analytics tools and inventory management systems, plus cloud-based platforms mean accurate, real-time inventory information can be personalised and displayed to customers anytime, anywhere.

It’s vital these customers are given the information they need at key moments in the buying journey. If the warehouse is low on stock, create buying urgency with a low stock warning. If the warehouse is out, signpost to a click and collect option if stocked in the nearest store, or even better ship directly to the customer from that store. A single view of inventory makes this possible. Offer a sign-up for updates on when stock is refilled, or provide a date on when the product will be stocked again.

Fulfilment potential

When thinking about omnichannel operations like click-and-collect and ship-from-store, owning inventory in this way has clear business benefits in terms of dramatically reduced processing times, the ability to pick multiple orders at once, avoiding overselling in-store and quality assurance for order accuracy. It also frees up staff to deliver a better customer service. And in terms of that elevated customer experience, you’re enabling customers to shop and receive their product when and how it is convenient.

Optimising the returns experience for customers as well as internal operations has become vital for taking a lead on competition. Visibility of returned stock as well as outgoing items is important when maintaining stock levels and re-ordering inventory. Also, monitoring data around return reasons can highlight product, UX, or fulfilment issues, which can be used to optimise the customer experience.

Optimising stock

It is necessary for brands and retailers to understand that inventory ownership and being able to fulfil on that is not just a matter of increasing the chance of a sale to a customer. It is also a fundamental part of business strategy to ensure you are releasing held stock as quickly as possible. Money on the shelf is wasted investment, so make it easy to identify where it is, where to move it to, and also constantly learn and make changes to reduce wastage in the future and improve your bottom line.

Managing change

Whether it’s peak holiday season, a slow trading period, or an unexpected spike in demand for a product line, inventory management is integral in supporting the customer experience. Stock needs to be visible and ready to pack and ship. Smart brands manage the customer experience during the flow of seasonal or unexpected trading shifts.

Real-time visibility, plus analytics, and educated planning allows businesses to deliver a consistent omnichannel experience, whilst balancing the spikes in demand, without being left with excess inventory or, worse, out of stock. I’ve even seen single store retailers, who have a simple commerce platform, using improved Pick-Pack-Dispatch technologies that can optimise their time in the store, enabling them to service both the on-line customer and the physical customer standing in store, allowing them to treat both with equal importance and give consistent experience across all touchpoints.

 

In Conclusion

At the end of the day, if you have inventory visibility – use it. Make it transparent. Upsell, create urgency, and personalise the message to deliver customers what they want, when they want it, via their preferred platform.

With the advent of the Covid-19 outbreak, the balance between supply, demand and inventory availability has become even more critical.  It has highlighted significant weaknesses for many businesses on being able to continue to trade in any capacity, and if they can trade, they are not able to optimise their inventory across their entire estates which has therefore made them unable to give a consistent customer experience and has meant they are not able to shift stock efficiently.

Think of it this way: those businesses that have supported their customers with a positive experience during this time are likely to have built long-lasting relationships, where others have not.

We are now going to enter a new world of digital trading and the full product inventory path will be a critical area to have optimised to be able to cope with an ever-changing world.

Bidder’s Bites

Bidder’s Bites is a series of thought-leading blogs discussing the state of customer experience and the impact it has on businesses today, and how they can stay ahead of the game. Written by customer experience thought leader, Paul Bidder.

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