"Omnichannel Inventory Management" is frequently used in the retail industry.
What does it entail, and how can it help your business? Moreover, what are the top recommendations for introducing an Omnichannel Inventory Management system?
Everything that has been mentioned thus far, and more, will be covered in this post. By the end of the piece, you will have a firm grasp of Omnichannel Inventory Management and how it may boost your business.
Definition of "Omnichannel Inventory Management"
Omnichannel inventory management refers to keeping track of and syncing stock levels across all points of sale, whether online, at a physical store, or anywhere else.
With efficient omnichannel inventory management, stock levels can be monitored and adjusted across all sales channels without physically moving any physical goods.
Businesses can keep tabs on stock levels in real-time through logistic management software, whether a product is offered in-store, online, or through a third-party marketplace.
Companies utilizing Omnichannel Inventory Management
Many companies now recognize the value of adopting an omnichannel strategy to maintain an advantage over rivals. Amazon, Starbucks, Target, and Best Buy are some of the most well-known.
They perceive benefits such as happier customers and better revenue as a result. In addition to lowering out-of-stocks, increasing fill rates, and cutting inventory-management expenses, omnichannel inventory management has also improved customer service. For a good reason, many companies are adopting omnichannel inventory management solutions and eCommerce supply chain management methods.
Advantages of an Omnichannel Inventory-Management System
It's difficult enough to manage stock for just one sales channel. The complexity increases at an exponential rate as more channels are added. Attempting to handle all of this on your own, using pen and paper or Excel spreadsheets, is a waste of time. With a centralized solution, using the digital dashboards of each channel is efficient at best.
A "single source of truth" for all of your inventory information is what you need. Several significant advantages become available when you adopt a logistic management software solution. These include:
- Avoiding shortages and backorders,
- Boosting contentment among paying customers,
- Bringing down overhead expenses,
- Boosting Profits and Sales.
Omnichannel Inventory Management: How Does It Work?
An omnichannel inventory management system allows for centralized tracking and administration of stock across many distribution channels. It implies that regardless of whether a product is sold in-store, online, or via a third-party marketplace, the company always knows precisely how much of each item they have available for sale.
Omnichannel vs. Multichannel Shopping: Key Distinctions
Retailing across more than one channel is known as omnichannel or multichannel retailing. The primary distinction between omnichannel and multichannel merchants is that the former has a single strategy for inventory management across all channels, while the latter handles each channel independently.
Let's pretend you already use a multichannel approach to selling your wares, incorporating online and offline stores, social media, etc. What's the difference between that and adopting an omnichannel strategy?
The seamlessness of the omnichannel process significantly benefits you and the customer. If you combine everything, serving consumers will be a breeze. A more streamlined inventory system is another cost-cutting benefit of the omnichannel retailing strategy.
Customers will be even more loyal if they can make an online purchase and return the item in person. It can be made possible via e-commerce supply chain management. However, there are some difficulties and hurdles that it must surmount first.
Problems With Omnichannel Inventory Management
What is preventing your organization from launching an omnichannel management system? Think about this.
You can't manage omnichannel stock manually. It would be best if you could automate this step with technology so that the process runs more smoothly.
Channel sales, software integrations, shipping labels, and stock information can all be found in one place with a solution like inventory management software such as Luminous.
Poorly Coordinated Supply Chain Procedures
Every part of your supply chain must be integrated into your omnichannel inventory system to function correctly. You can count your suppliers, manufacturers, logistics partners, and more in this category.
If these entities utilize incompatible logistic management software or cannot connect, it could throw off your inventory management system. Fortunately, there are several options for software that already include supply chain management tools.
Luminous's consolidated approach to vendor management is made possible by its built-in vendor management system (VMS).
Errors in Ordering
With so many variables at play, it's crucial to have a system that can monitor progress and guarantee precision. With the help of an inventory management tool, you can track your stock levels in real time across all sales channels.
Also, it will minimize errors because it would automate routine processes like shipping and order processing. Even though it's a complicated procedure, omnichannel inventory management can significantly affect your company's success. Developing a system can boost customer happiness, decrease operating expenses, and boost revenue and margins.
Inventory Visibility Is Limited
Monitoring stock levels in real-time is crucial to efficient stock management. It is among the most significant obstacles companies confront when introducing an omnichannel inventory management system.
It's easier to oversell things by knowing what you have in stock, which can result in unhappy consumers and a drop in revenue. Luckily, some tech solutions can provide you with the insight you require. Luminous, for instance, allows you to monitor stock levels across all sales channels in near real-time, making it one of the best SCM software on the market.
High Inventory Storage Costs
It's crucial to provide your sales channels with space in the processing center.
If you do, you can avoid being stuck with unsold inventory and have to get rid of it. Instead, make innovative use of available storage to avoid holding too much or too little of an item. If you want to find the best SCM software for your company, look no further, as Luminous can be your saving grace for all your needs.
Monitoring Your Orders
You must know all the components of an order, its origin in stock, and its destination with absolute precision. It is the only reliable method of monitoring inventory and confirming proper order fulfillment.
Fortunately, many software options can assist you in keeping tabs on your orders and stock levels. Luminous, for instance, is one of the best SCM software that allows you to monitor stock levels across all sales channels in near real-time with its incredible supply chain analysis tools. It also has an OMS (order management system) integrated right in, so you can monitor and handle everything related to your orders in one convenient location.
Top Recommendations and Techniques for Managing Omnichannel Inventory
Now that we've covered some obstacles you'll face, let's look at the best methods for managing your inventory across many sales channels.
Accurately Assess Your Stock
In the United States, 43% of SMBs don't maintain an inventory system (or do so with a manual system). A whopping 43%!
As a result, you'll be miles ahead of the competition if you know how much stock you have. If you want to know your actual stock levels, you need to be able to see what you have in stock across all of your sales platforms.
For this purpose, you will need a technological solution that allows for constant monitoring of stock levels. For instance, you can monitor your stock levels in real-time across all sales channels and make adjustments as necessary using inventory management software like Luminous.
Overselling products, frustrating customers, and losing sales are all possible outcomes if you need to know what you have on hand.
Promote in-store Exchanges
You may mitigate the loss to your bottom line by encouraging returns in-store. After all, there are several ways your firm could benefit from a satisfied consumer returning an item in person.
A buyer may find what they're looking for or uncover other goods they'd like to buy.
Customers will save time because they won't need to print a return mailing label or go to a shipping company. If they purchase what they need in the store, they will be grateful for the extra time they have been given back.
You can get the benefits of their in-store purchases without incurring the expense of a shipping label. What this means is that everyone benefits. So, what happens if they bring it back to the store but don't buy anything else? Don't worry about it.
You'll still be able to make a sale in-store, but you won't have to fork over extra cash to have the item scanned into your warehouse and re-posted online.
Make Your Supply Chain More Coordinated
When your supply chain is integrated, you can track items from when they are ordered until they are delivered to a store or customer's door.
With this level of insight, you can monitor your shipments and know precisely when they will arrive. It also helps you anticipate problems before they happen and take measures to fix them.
If you know an item will be delayed, you may notify clients via your website or app as soon as possible, saving them time and annoyance.
As an additional perk, supply chain integration enables you to monitor inventories and make modifications as needed to maintain an optimal supply level. Keeping up with demand is essential to stay supplied during busy periods like the holidays.
Improve Your Return Procedures
Modifying your return rules is another step toward omnichannel inventory management. Your return policy needs to be straightforward so that customers may make informed decisions. It needs to be adaptable so that you may provide a range of options to your customers that are appropriate for the product, distribution channel, and individual.
You may, for instance, waive the restocking cost for online returns while requiring payment for in-store returns.
You could give shop credit, exchanges, or refunds as methods of return. And make sure your customers understand the return policy you have in place.
Fighting a refund request will, of course, set your company back some cash. However, the lack of a reliable refund procedure may have much more detrimental effects. Many consumers would buy more regularly at a store with a simple return policy.
Create a Strategy for Ensuring Client Happiness
Establishing a strategy to ensure customer happiness is another crucial step toward achieving omnichannel inventory management success. Developing a method to record and address client inquiries or complaints is necessary.
Customers will see that you value their opinion and will take action to rectify any problems by developing a strategy to ensure their contentment.
You don't have to go to extremes to devise a strategy to increase consumer happiness. But it needs to reflect your company's unique circumstances and include the following:
- A method of keeping tabs on concerns or inquiries from consumers.
- A strategy for dealing with customer exchanges and returns.
- Methods for addressing comments and suggestions from clients.
- A refund policy that is simple, straightforward, and easy to understand.
Keep in mind that providing excellent customer service is crucial to the success of any retail business. Doing so will result in loyal clients who will gladly buy from you again and happily share the news about your business.
Spread Your Stock Around
The advent of internet shopping meant that a single warehouse could house a company's entire stock. After a while, you recognized that there were more effective strategies than this, especially if you were dealing with a wide variety of products as the business built up.
It is not unusual for companies to store their goods in several different facilities nowadays. There are several pluses to using this technique. The first advantage is that it shortens the distance between you and your customers, reducing shipping times. Second, it provides a safety net if one of your warehouses experiences troubles (e.g., weather problems).
Finally, it's essential to have a backup plan when working with perishable goods. For example, you can rapidly ship things from another location to keep clients pleased in an out-of-stock situation.
How Much Time Does It Take to Deploy an Omnichannel Inventory Management System?
A company's size and complexity determine how long it takes to establish an omnichannel inventory management solution. The vast majority of businesses, however, may anticipate entire operations within a few months.
There are certain things you can do right away if you need an answer right away. First, taking stock of what you already have and where it is stored is essential. This action will give you a solid foundation to build an omnichannel strategy.
The next step is to plan out the consumer experience you wish to provide. How about allowing them to buy online and pick up in-store? Or would you give a more streamlined process where customers may shop online and have the things delivered directly to their front door?
Once you have a firm grasp on what you want to do, you may begin actively seeking means. Many viable choices are available; take your time selecting the one that best suits your company's needs.
Deconstructing Omnichannel Stock Management
Omnichannel inventory management, in a nutshell, is a platform that helps companies keep track of their stock levels across several sales channels.
Businesses can benefit significantly from this arrangement since it allows them to stock inventory closer to their customers and acts as a safety net in case one of their warehouses experiences technical difficulties.
Through omnichannel inventory management, companies can gain a deeper insight into their consumers' demands and needs. Although it may take some time to implement an omnichannel inventory management solution, the benefits will be worth it.
Allow Luminous to Aid Your Company Now in Managing Inventory Across All Channels
One option to enhance your stock management is to implement an omnichannel system. Also, Luminous is available now to assist you in getting started with eCommerce supply chain management.
Luminous's connection and supply chain analysis tools let you synchronize stock information across several e-commerce platforms, allowing for more streamlined order fulfillment and, ultimately, more successful business expansion.
Companies may improve their inventory management across all channels and markets by utilizing Luminous's extensive automation and centralized inventory synchronization and supply chain analysis tools.
Contact us or book a demo to learn more about how Luminous might improve your company as an inventory management software!