The retail industry is at a critical inflection point. The biggest brick-and-mortar stores are facing significant external pressures, and today’s customers have come to expect a seamless omnichannel shopping experience, every time. To better understand how retailers are faring in this uncharted retail era, Bossa Nova partnered with Wakefield Research to survey corporate retail professionals (CRPs) about their current inventory management practices and opinions on the retail automation technologies designed to transform store operations.
What we found was staggering. All CRPs surveyed acknowledge at least one instance of inventory mismanagement, and 99 percent admit at least one recurring inventory issue plaguing their operations. When asked to assign their stores a letter grade for inventory management, 64 percent gave their stores a “C” grade or worse. No CRPs gave their stores an “A.”
However, this doesn’t mean that retailers are admitting defeat. More likely, they’re admitting reality. Supply chains with multiple touchpoints are inherently challenging to run, and it’s inevitable that errors (human or otherwise) will creep into the tracking process. Retailers could neglect these issues when brick-and-mortar stores were a customer’s only option; however, there are now countless e-commerce sites offering multiple alternatives for purchasing the same product.
The evolution of omnichannel has only served to amplify these problems. As brick-and-mortar retailers began selling online, they treated the two channels as independent businesses, with inventory managed separately or as a subset of one or the other. One of the main problems was and continues to be the old “garbage in, garbage out” conundrum; that is, “if my raw data is poor, the experience delivered is equally as poor.” Retailers often use workarounds to combat this. For example, a store could choose to mark an item as “out of stock” for buy online, pick up in-store orders, even though the store’s inventory data notes three of the items are in-store. Although the product might be there, retailers commonly opt to deny the order rather than risk the high likelihood that the data is incorrect and disappoint the customer. These workarounds result in lost sales and further drive customers to seek out alternative options. With all this choice, accepting that inventory is inaccurate and anticipating a customer will still purchase a substitute product is no longer a viable option.
Advanced automation technologies, like in-store robotics, excel at repetitive tasks like scanning and auditing on-shelf conditions and are ideal for a dynamic store environment. Encouragingly, 100 percent of CRPs agree that automating inventory management would have some net benefit. Seventy-six percent say that the introduction of robots in stores would improve employee productivity. A comparable 74 percent said inventory accuracy would improve as a result, while increased profits (69 percent) rounds out the top three perceived benefits of introducing robots to stores. Most importantly, 62 percent of CRPs feel that employees would embrace their new automated colleagues, and 61 percent believe customers will do the same. While large-scale retailers are historically conservative when it comes to big changes, it’s promising to see that the majority of respondents are willing to consider alternatives to outdated inventory management practices.
Accurate, real-time product inventory data is the crux of a seamless omnichannel retail experience, and it’s clear that automation holds the key to helping retailers understand what’s happening in their stores and on their shelves. The data these technologies collect serve as “ground truth” for stores and enable retailers to transform their store operations. By offering — and delivering on — the omnichannel experience customers demand, retailers will reap the rewards of this brave new retail world.
Martin Hitch is the co-founder and chief business officer at Bossa Nova, a robotics company that provides product inventory data for retail.