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Retail Business Review | Thursday, September 28, 2023
Recent technological advancements have enabled retail inventories to deal effectively with optimized control, store-workforce connection, and in-store team empowerment.
Fremont, CA: Inventory management challenges have become increasingly complex over time. Retailers and vendor partners must cooperate more effectively to prevent retail inventory distortion and provide consumers with better service as the role of the store evolves, and supply chain challenges remain.
Benefits of Technology in Retail Inventory
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Optimize Control
According to the July 2022 research report from Carl Marks consultants, more than half of the supply chain executives surveyed do not anticipate a "return to an increased normal supply chain" until the initial half of 2024. During the pandemic, 39 percent of respondents claimed they made technological investments to change their supply chain tactics.
While pandemic lockdowns and natural catastrophes that disrupt the supply chain may not be prevented, a technology designed to optimize the handoff between the supply chain and implementation—the last 20-yard "red zone" that determines whether a product is available on shelves—can be deployed.
According to a recent study from the IHL Group, out-of-stock and overstocks (together known as "inventory distortion") would cost North American merchants $349 billion in lost sales during 2022 alone.
While supply chain issues represent a sizable portion of the lost sales (roughly $129.2 billion), a staggering amount can also be linked to other factors like overworked labor ($63 billion) and subpar shelf replenishment techniques (retailers managed to recover $15 billion in failed sales during 2020 with better processes and systems alone).
Irrespective of the supply chain, this last cause of inventory distortion (store structures and procedures) may be rapidly rectified with the correct technological investment. Retailers are increasing their investment in retail execution technology because it allows them to reclaim control over some fate of the store's sales from the supply chain.
Connect Store-Workforce Ecosystem
Retailers encounter many difficulties in effectively managing and tracking inventory due to the sheer volume and diversity of SKUs within a shop. With additional stores and vendor teams, this problem gets progressively challenging.
Phantom inventory, theft, incomplete inventory audits, and mistakes in documenting sales or returns are all expensive problems in and of themselves, but they are more probable to surface when operating many locations.
An appropriate retail inventory technology provides the ability to communicate with in-store personnel on the ground and the merchandising service providers (MSOs) for in-store execution. Software solutions that provide immediate interaction and visibility on the store-floor level should be used to reduce inventory distortion.
Empower In-Store Teams
The frontline staff members who handle stocking and merchandising inventory are in the most significant position to identify problems with retail inventory early on. Enabling these teams with the authority to locate and address inventory problems at their source may result in enormous savings and revenue increases later, especially when automation is included.
As a result, store teams will be able to act immediately and have more visibility into how merchandise is performing in shops. This enhances customer service as employees will need less time to complete tasks and can focus on customer interaction.
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