Inventory is At the Heart of Omnichannel Retail Success
As many readers of this blog know, I've been working with Direct Tech, a 26-year-old provider of merchandise and inventory planning tools for direct-to-consumer retailers, for the last few years. Earlier this year, Direct Tech was acquired by Software Paradigms International (SPI), a 20-year-old provider of IT solutions to brick-and-mortar retailers. It’s exciting to be part of the integration of these combined experiences to deliver omnichannel solutions to retailers.
The experience has also provided me increased exposure to big-box retailers and the challenges they're facing. While meeting recently with a 500-store retail customer of SPI, we discussed the marketing trends it's trying to navigate, which closely parallel the challenges of direct-to-consumer retailers.
Consumers are in charge. They expect channel transparency and highly personalized products and promotions. This is an almost identical challenge for store and internet retailers. The only difference is the operational solution required to meet the need.
Consumers expect to be able to buy anywhere, ship anywhere and return anywhere. This is a bigger challenge for brick-and-mortar retailers due to the number of possible physical locations, while internet retailers tend to have a smaller number of distribution centers.
Promotions are increasing exponentially. Twitter, Facebook, Instagram, emails, retargeting … the list is seemingly endless and continually changing.
There's too much data for planners to consume. Planning and purchasing systems must provide big data processing capability and predictive analytics to provide planners with reliable recommended actions. Whether a brick-and-mortar retailer, internet retailer, catalog retailer or any combination of the above, the issues are fundamentally the same.
These same issues were solidly reinforced in the results from SPI’s 2015 Omnichannel Implementation and Technology Survey. SPI contacted merchandising and IT professionals from more than 100 retail companies, and will be publishing a study of the results in August. Here's a sneak-peek at some of the findings:
- More than 70 percent of retailers indicate they must introduce omnichannel solutions to provide a seamless customer experience.
- The pressures on inventory planning to meet the customer’s expectations are great. Sixty-eight percent of the survey respondents named buy online, pick up in-store as their top initiative.
- The No. 1 reason given to pursue omnichannel solutions is to increase sales.
- The No. 1 business challenge for omnichannel retailers is planning and budgeting across channels.
It's no secret that I have a strong bias for the importance of inventory planning to a retailer’s success. As I hear the needs from in-person meetings with both brick-and-mortar and online retailers as well as observe the results of SPI’s 2015 Omnichannel Survey, I've come to the conclusion that we're truly in a game-changing time in the retail industry, but it’s really dependent on the timeless reliance of inventory planners. Give them the tools, training and resources needed to ensure the right inventory is at the right place at the right time.
Joe is Vice President of Product Solutions at Software Paradigms International (SPI), an award-winning provider of technology solutions, including merchandise planning applications, mobile applications, eCommerce development and hosting and integration services, to retailers for more than 20 years.
Joe is a 34-year veteran of the retail industry with hands-on experience in marketing, merchandising, inventory management and business development at multichannel retail companies including Lands’ End, LifeSketch.com, Nordstrom.com and Duluth Trading Company. At SPI, Joe uses his experience to help customers and prospects understand how to improve sales and profits through applying industry best practices in merchandise planning and inventory management systems and processes.