Inventory Visibility: Why It Matters and How to Improve It
Posted by Amanda McLaughlin on May 11, 2024
Deliver modern, mobile-first shopping experiences that delight your customers. Drive ROI back to your business across all customer touchpoints—in-store, online, and on mobile. Book a time with our team to learn how we can help transform your business with our omnichannel solutions.
*Privacy Notice: By hitting "Submit," I acknowledge receipt of the NewStore Privacy Policy.
Having a comprehensive understanding of your current inventory levels across your enterprise – known as inventory visibility – is essential for keeping customers happy and making decisions regarding fulfillment, replenishment, demand forecasting, and a multitude of other critical areas.
However, our 2024 Omnichannel Leadership Report suggests that the current state of inventory visibility is less than ideal. The report reveals that less than half of retail websites offer the ability to check store inventory, and only 43% of brands with an app have a feature within the app to check inventory in stores.
Customers have zero patience for an experience that says a product is available in-store, only to visit the store and find out it’s not. For many consumers, that’s a bad enough experience to never shop that brand again. The lack of visibility not only frustrates customers, but also results in lost sales and revenue for brands.
In this article, we answer:
Inventory visibility is the ability to accurately track and manage the movement of goods, in real-time, throughout the supply chain. With excellent inventory visibility, you can access real-time data on stock levels, sales, and customer demand, and consolidate this information into a single view.
By effectively storing and monitoring this information, you can make more informed decisions about your inventory management, mitigate the risk of overselling and underselling, and accurately forecast demand. When done well, this can create a strong foundation for scalable growth and bolster your relationships with customers.
Experience remains the most critical factor in shaping how consumers engage with and perceive brands. In fact, research shows that an overwhelming 78% of consumers have made purchasing decisions based solely on their experience, while 82% would recommend a company based entirely on the quality of their interactions.
Modern retail is in a constant state of flux, driven by rapidly evolving consumer shopping habits. Today’s shoppers interact with your brand across multiple channels and devices, all with the singular goal of making their experience more convenient and hassle-free. Many retail brands are having trouble getting it right because most inventory management systems haven’t evolved for modern retail.
Omnichannel focuses on providing customers with seamless and convenient experiences, and real-time inventory visibility is a crucial component of this approach. By maintaining a unified view of your inventory across all demand sources, you can unlock more opportunities to meet and exceed customer expectations. That means delivering on customers’ desires and differentiating your business from your competitors. In essence, real-time inventory visibility is the key to satisfying customers’ “what, where, and when” needs in their shopping journey.
More specifically, when your business has accurate inventory data, you can offer flexible fulfillment options, such as buy online pickup in-store (BOPIS), ship-from-store, and same-day delivery, among others. Additionally, you can optimize your product offerings, and tailor your marketing and promotions to specific customer segments, resulting in more personalized and engaging customer experiences.
From improving the customer experience to boosting revenue, inventory visibility offers numerous advantages for retail brands.
Customers want easy, intuitive, and transparent shopping experiences. Inventory visibility enhances customer experience by ensuring that products are consistently available when and where customers want them. This reduces instances of stockouts and backorders, preventing customer frustration and disappointment. Additionally, it enables retailers to offer accurate product availability information online and in-store, empowering customers to make informed purchasing decisions and ultimately increasing satisfaction and loyalty.
Achieving true omnichannel excellence means creating enjoyable experiences for customers at every touchpoint, including returns and exchanges. Equipping your staff with the right tools and resources, such as mobile devices like iPhone, makes it easy for them to accept returns and place items back in inventory for reselling. By streamlining the process, you create a more positive and hassle-free experience for customers and store associates alike.
In the wake of the “Amazon Effect,” customers have come to expect quick and efficient delivery as the norm, with same-day or on-demand delivery becoming the industry standard. Meeting these expectations requires complete oversight of your inventory, so you know exactly what you have in each store as well as what is out of stock.
Unlocking omnichannel’s full potential requires inventory visibility. Accurate and up-to-date inventory data enables you to improve demand forecasting and planning, quickly adapt to fluctuations in customer demand, and ensure products are available whenever and wherever customers want them. With omniscience in action, your staff can always find a way to get customers what they want.
Omnichannel leaves no room for excuses. Help your store associates say ‘yes’ to more customers by giving them the ability to access and sell inventory from any location. Whether it’s fulfilling an order through another store, a warehouse, a distribution center, or online, endless aisle gives your store associates the inventory visibility they need to save the sale and please the customer.
When your customers have tight budgets, it can have an impact on your business too. During tough economic times, it becomes crucial to make the most out of inventory and minimize expenses. Accurate inventory visibility gives you insight into precise stock levels for each item, enabling you to maximize the sales of your current inventory before investing in more unnecessary stock.
Empower your store associates to cross-sell or upsell. By making your entire catalog available to all in-store customers, they are more likely to come in and find something they love. This translates into more opportunities to make additional sales without resorting to high-pressure tactics that can turn off customers.
Inventory visibility enables brands to implement experience-enhancing solutions such as endless aisle. With near-omniscient inventory management, you can say goodbye to unsightly 30-foot shelves and cluttered clothing racks. Instead, you can use that space to create a more inviting and engaging store experience, allowing customers to browse and purchase from your entire catalog. This approach will also free up staff time to focus on helping customers instead of adjusting displays or organizing clothes racks.
Inconsistencies in data and limited inter-system communication result in a confusing picture and unsatisfied customers. Inaccurate information, insufficient forecasting, and difficulties in pinpointing product locations are tell-tale signs that your inventory management needs some love.
Typically, you can trace the culprit to your technology stack. Outdated ecommerce platforms cannot handle the dynamic, real-time inventory updates from multiple sources, leading to problems such as stockouts, overstocking, and operational inefficiencies. These factors can have a negative impact on your business’s bottom line.
Most of the challenges with inventory visibility are related to:
Legacy ecommerce platforms may provide a basic overview of your stock availability, but they often struggle to communicate with essential systems that facilitate omnichannel journeys, such as mobile point of sale (mPOS) solutions.
Additionally, legacy systems cannot handle real-time inventory updates in various statuses since they can only process sequential batches and limited file formats. This can result in a fragmented customer experience, where customers may see that an item is available online, but it’s not in stock at the physical store.
Upgrading to an integrated inventory management system can help ensure that all systems “speak” to each other, providing a consistent experience for customers, regardless of the channel they use to engage with your brand.
Inventory management has become more complex due to the fast-paced nature of modern retail. With customers shopping across multiple channels, a single item can go through potentially hundreds of micro inventory lifecycle events. It’s no longer as simple as just “sold” or not “sold.” Items can be in a customer’s basket, at the checkout stage, on a wish list, saved for later, and more.
Managing inventory data can be complex since it is often spread across different systems, such as order management, warehouse management, and third-party logistics providers (3PL). This data fragmentation creates silos that can make it difficult to keep your ERP and ecommerce platform in sync with your inventory.
To ensure accurate inventory tracking across all sales channels, including brick-and-mortar stores, ecommerce, and marketplaces, you need a more granular level of management and understanding. Legacy systems often cannot handle this level of detail, leading to inventory discrepancies and missed sales opportunities.
Real-time inventory visibility is complex. It requires a well-defined process and the right inventory visibility software and approach. Omnichannel orders are especially challenging, and the right technology choices are crucial to reducing human error and ensuring your inventory is always in sync across every channel.
The key to achieving comprehensive end-to-end inventory visibility hinges on having seamless connections across every stage of the supply chain and all sales channels. To achieve this, you need an omnichannel order management system (OMS) that can capture and integrate data from all sources.
An omnichannel OMS connects inventory, customer, and order information in a unified platform. It’s the inventory visibility software you need. This comprehensive view is critical for determining if a product is available to sell and streamlining fulfillment. By orchestrating all orders across the enterprise, the OMS ensures efficient operations for ecommerce and point-of-sale systems.
Without an omnichannel OMS, you have to rely on a safety stock model to enable omnichannel, which is not optimal, especially given the current business climate.
Radio-frequency identification (RFID) technology uses radio waves to communicate between a tag and a reader, providing real-time tracking of products. This means that you can quickly and easily locate specific items in your inventory, as well as track their movement throughout your supply chain. Studies have shown that RFID can significantly improve inventory accuracy, increasing it from 70% to over 95%. With this increased confidence, you can make smart decisions about purchasing, fulfillment, and other aspects of your business.
Barcode scanning is another quick and efficient method for capturing product data and inputting it into your system. Once you barcode all inventory, your store associates can easily scan each item to access key product information such as the item’s storage location and stock quantity. Barcode scanning is another powerful tool for improving inventory visibility and enabling fast and accurate inventory management.
Reverse logistics plays a crucial role in managing the complex process of handling returns, repairs, and recycling of products. By implementing efficient reverse logistics solutions, retail brands can reduce costs, improve customer service, and increase profitability. When combined with RFID technology, the benefits can be amplified.
For instance, brands can use RFID tags to track products throughout their lifecycle, allowing them to understand the products’ condition and determine their availability for resale. By analyzing returns data in this manner, retail brands can gain insights into which products are selling and which ones are not. This increased inventory visibility can help you adjust your inventory levels, accordingly, leading to better decision-making and increased efficiency.
Whichever way you cut it, retail faces challenges from multiple directions: rising customer expectations, increasing competition, and pressure to reduce overhead costs while optimizing stock.
Real-time inventory is no longer a luxury, but a necessity for retail brands striving to win in today’s dynamic retail market. As consumer demands continue to rise, retail brands who fail to provide this level of visibility risk losing customers to competitors who can.
Keeping up with these demands requires the right technology choices. Legacy systems often lack the necessary capabilities to handle the complexities of modern retail. Investing in the right inventory visibility software can help you stay ahead of the curve. By embracing innovative technologies like and omnichannel order management systems and RFID, you can gain the end-to-end visibility you need to provide seamless shopping experiences and build a more efficient business.
If you’d like some advice on how to improve inventory visibility, reach out to connect with one of our omnichannel experts through the link below.
