From new and emerging online shopping trends to global supply chain issues, retail brands have been facing extraordinary challenges over the past couple of years, but the ones that came out fighting – and won, all share a common denominator: good inventory management.
What is inventory management?
Inventory management is the process of managing stock throughout the supply chain. This includes the management of raw materials, components, and finished products, as well as warehousing these items. On a day-to-day level, inventory management also means keeping track of goods – where they are and how long you’ve had them, knowing what they cost and what they’re retailing for, as well as identifying popular stock and ordering the right amount to satisfy demand.
What are the advantages of inventory management?
Inventory management allows you to track the acquisition, storing, and selling of your products. Based on this information, you can forecast inventory and automate the reordering process. When the products have been purchased, you can track them from your supplier to your warehouse, and through the fulfillment process to the customer and back through the returns process.
But there’s more to inventory management than intelligent tracking and streamlined order processing. Long-term, inventory management delivers a range of benefits that contribute to business growth.
Improved cash flow
Brands and organizations that prioritize inventory management improve cash flow by spending less on slow-moving items.
When you’re less likely to run out of stock, you can respond to demand before your competitors, which means an increase in sales.
With a holistic view of your inventory, you can identify the products that deliver the best returns for your business and invest accordingly.
Leveling up for success
Recent shifts in consumer behavior and an unprecedented demand for online commerce means some retailers are now falling short of customer expectations. Several key factors need to be taken into consideration when choosing an inventory management solution:
1. Does it support omnichannel commerce?
With 73% of consumers preferring to shop through multiple online and offline channels, today’s businesses must support consumer demand for inventory across online stores, brick-and-mortar stores, marketplaces, and social media channels.
2. Does it offer inventory level transparency?
Buyers expect to see inventory counts for the products they want to purchase at each location. Businesses that provide visibility into stock levels benefit from higher revenue and customer loyalty.
3. Will it allow customers to buy online, pick-up in store (BOPIS)?
Buy online, pick-up in store transactions soared during the pandemic. US shoppers spent $72.5 billion through click-and-collect fulfillment options in 2020 — which accounted for 9.1% of all e-commerce sales. And the trend looks set to continue. In fact, it is expected the BOPIS market will exceed $140 billion by 2024.
Sitecore OrderCloud: A flexible inventory management solution
Sitecore OrderCloud’s headless, API-first architecture enables omnichannel management across multiple customer touchpoints, while its InventoryRecords feature offers a seamless inventory management solution that flexes to adapt to changing consumer demands while providing specific benefits to retailers, manufacturers, and product distributors.
- Multi-location retailers can track inventory across their brick-and-mortar locations so that they can provide customers with real-time information about stock at stores closest to their location. With full visibility into available inventory levels, shoppers can decide whether to buy online and select a delivery option or, instead, buy-online-pickup-in-store (BOPIS).
- Product manufacturers can leverage the feature to determine which distribution center is the best option for each customer based on their requests and shipping address. It can also help manufacturers prioritize the inventory they send out – for example, sending out the oldest inventory first or shipping from preferred distribution centers.
- Product distributors avail of smoother order fulfillment. If an order cannot be completed within the first lot of inventory, they can ensure it is sent together in the second lot to avoid delivering the goods across two lots.
Read more about how Sitecore OrderCloud’s game-changing capabilities expand inventory management or find out how omnichannel personalization gives brands a competitive edge.
Fiona Hilliard is a Content Marketing Manager at Sitecore. Connect with her on LinkedIn