Sunday, September 06, 2015

Some Thoughts About Multiple Inventory Tools In Terms of Omnichannel Retailing

Inventory is a key element of category management in retail. Actually, it was the first step of the category management process: the ECR, effective customer response, is based on sharing information about sales, inventory, and production by both retailers & manufacturers. 

Even though most of retailers consider inventory as a liability, something that cost money, Ikea believes it is more an asset: the more inventory you have, the less chance of being out of stock, which means you minimize your missed sales, increasing turnover. 

But there is a big challenge that appeared with omni channel retailing : how do you manage the different concepts, especially brick & mortar & E commerce inventory? There are in my opinion two main issues:
  • In 90% of the cases, information system dealing with inventory are different between brick & mortar & E commerce business units. Why? Because they have not been created at the same time. Especially, in brick & mortar, they are hardcore huge data base, with a lot of risk to transfer to a new system. But that causes a big issue, as it means it is difficult to have a single inventory system that may ease the inventory management for both BU
  • In nowadays E commerce, market places take a larger space in the game. And in market places, the merchant don't manage inventory. Therefore, if you sell some goods by a third party, it is difficult to forecast which share will go to the third party and to you.
But by having a global inventory, taking into accounts online & brick & mortar sales will be a key factor of success for retailers in a near future.