4 Essential Tips for Improving Inventory Management and Winning Lifelong Customers
At first glance, inventory management may appear far removed from the customer experience. However, it can be just as integral to shoppers as mobile apps, self-checkout, and in-store displays. In fact, companies that prioritize improving this process often see a rapid improvement in customer sales and loyalty.
In January, Business Insider reported that Walmart was leading the pack in technology-enhanced inventory management. By summer, almost a fifth of the retail giant’s stores will feature robots that will traverse aisles in search of misplaced items, empty product shelves, and pricing errors.
Of course, keeping up with inventory has always been critical. Many retailers don’t think about the connection between customer delight and being able to find the right product right now. Nothing frustrates consumers quite like missing or out-of-stock merchandise.
Technology can’t solve every inventory management issue, but it has the potential to solve specific problems and foster a harmonic retail experience for customers. Even retailers with several stock-keeping units (SKUs) can leverage software and artificial intelligence (AI) to adapt faster. By evaluating historical data and constructing more reliable projections, they’ll elicit a harmonious response.
If your retail shop is ready to leverage technology in order to improve its inventory management system, follow these four steps to solidify your footing before rollout.
1. Execute a top-down, cross-departmental initiative.
Just last year, fashion retailer Asos discovered that automating inventory can’t happen across internal verticals without a comprehensive, multidepartmental strategy. Brand leaders noted that its updated inventory management system was launched without enough forethought. Essentially, the system performed only half its job, leaving gaping holes in inventory information and contributing to significant stock and profit downturns.
Without full buy-in (and expectations) from upper management, your inventory management program will struggle to gain traction. Everyone will see your goal as too big to undertake, leaving you with siloed episodes of success. Furthermore, you may not hear about stumbles until they slash your bottom line.
2. Begin with the end in mind.
Measuring tech-enhanced inventory management becomes enormously important, especially in the early stages of change. Pinpoint results that align with the goals and measures of revenue and customer satisfaction. Then, see how you can use analytics to reduce inventory snags and streamline processes moving forward for all stakeholders.
Begin with the end in mind. Write two reports: one showing the inventory management system achieving its goals and another showing it missing its goals. Work back from the reports to the solution specs and the development process. This will paint a clear bull’s-eye to align everyone’s efforts.
Kroger uses predictive analytics to inform planning and improve confidence in inventory management. Predictive analytics not only reduces the number of times items end up on back-order, but it also helps track customer and economic trends to provide better information with which to make merchandising decisions.
3. Link your budget request to shareholder value.
New tech requires investment. Without the backing of your financial team, you’ll have trouble securing the long-term dollars needed to collect, analyze and use statistically relevant results. Again, be ready to make a case for inventory management as a far-reaching operating expense worth its own line item.
This need not be as daunting as it sounds. According to a 2019 report, 12 percent of companies are ready to prioritize tech-related corporate investments. Among those investments are inventory management solutions — as they’re a direct connection to increasing customer conversion, customer satisfaction, and shareholder value. Consequently, your chief financial officer may already be open to the idea.
4. Practice patience and persistence.
You’ve heard the phrase, “big ships turn slowly.” While larger brands move slightly slower than nimble newcomers, the campaign for the benefits of a future-forward inventory management system can propel your vessel forward with more force.
Keep communicating the vision — not just of harmonic retail, but also how smarter inventory management equates to better customer experiences and higher conversion rates. Consistent messaging helps colleagues deal with change and ensures alignment of the true value and end goals. Additionally, you’ll show other companies in your supply chain that you’re serious about improving inventory management.
Belk stayed the course with its AI-inspired inventory upgrades and reaped the benefits. By moving toward a deeper understanding of how to keep the correct version of all merchandise on shelves, Belk proved itself visionary in its niche. Now, the company is pressing other supply chain vendors to adopt similar inventory management methods.
Every customer touchpoint matters, including how consumers feel when they can shop their preferred brands rather than having to settle for competitors. Take advantage of technology and generate harmonic retailing moments in a deep, meaningful manner by sharpening your inventory management.
Scott T. Reese is chief technology officer at Harbor Retail, where he helps bring Harmonic Retail™ to life with intuitive Self-Healing Technology™.
Scott T. Reese is a passionate leader, a “what’s next” enthusiast, and an arbiter of progress — with the detail-oriented, get-it-done attitude needed to make sure those big ideas are actually accomplished. Scott is currently serving as chief technology officer at Harbor Retail, where he helps bring Harmonic Retail™ to life with intuitive Self-Healing Technology™.
He spent the first 10 years of his career learning how to be an effective, inspiring leader in the United States Marine Corps. Then, he spent the past two decades collaborating to make a difference as an expert in corporate process and an effective consultant in the field of technology.