Dana Oppermann, director of operations, Onera
Last year, brands and retailers saw unprecedented online demand — with 10 years of growth crunched into just three months. The trend is likely to continue, with e-commerce sales expected to grow another 14% this year. But the supply chain also faced unprecedented challenges, with manufacturing delays, carrier rate increases and transit issues continuing to plague retail and online fulfillment experiences.
Meeting the pace of growth while navigating new constraints has forced brands and retailers to reassess their traditional inventory management strategies. Companies are getting creative by offering inventory that they already have in-network in new and different ways.
As the following sections show, there are five essential steps brands, and retailers are taking to maximize the inventory they already have to create the innovative experience their customers expect.
Set customers’ delivery expectations earlier in the shopping journey
Everyone understands the impact the “Amazon effect” has had on customers’ “fast and free” delivery expectations, but the pressure to compete has also opened the door to new fulfillment options such as same-day and local delivery. Many partners and third-party providers can enable last-mile fulfillment services (particularly in urban areas), but how can brands craft an entire shopping experience around a fulfillment option?
Customers like specificity when evaluating options, and offering estimated delivery dates ahead of checkout gives customers the visibility they’re looking for to make purchase decisions. More brands are personalizing the online shopping journey by using targeted messaging like “get it now” and “delivery by tomorrow” upstream of checkout. This gives customers the visibility they want and better showcases inventory readily available to meet customer demand — resulting in higher conversion.
Bring click-and-collect experiences to the forefront of the customer journey
For brands with brick-and-mortar stores, buy-online-pick-up-in-store (BOPIS) and curbside pickup options have proven to be incredibly valuable — 85% of BOPIS customers make an additional purchase in-store, yielding more sales and larger basket size.
Still, many retailers cite a lack of customer awareness around the option as an obstacle to successful program rollout. How can brands ensure customers are aware of the BOPIS experience early enough to see the benefits? The answer is (again): Showcase the option earlier in the customer journey.
As a case example in point: While most companies offer BOPIS or pickup options only at checkout, many of Onera’s customers have brought location-level inventory visibility upstream to the product description page (PDP) and product landing page (PLP). Adding the ability to filter for BOPIS on the PDP has resulted in over 50% of BOPIS orders converting to additional in-store purchases. Adding shop-by-store inventory filters to the PLP drives higher conversion rates, with the average rate for a shop-by-store experience landing at about two times that of a standard e-commerce shopping flow.
Use in-transit inventory to satisfy customer demand
Supply chain delays are expected to continue well past this year’s peak season. Overwhelmed facilities translate to more out-of-stocks on websites and extended backorders, both of which come with high costs to revenue and customer retention.
How can brands make more inventory available more quickly? Offering pre-orders is a proven strategy to satisfy customer demand while avoiding the risk of over-purchasing. And some trailblazers are getting even more creative by promising in-transit inventory.
In-transit inventory is any finished unit that does not yet exist within the four walls of a fulfillment channel but is actively in shipment — including units that are en route from the manufacturer, store replenishments that are in transit from the warehouse and even in-flight return items that will be processed for resale. Tapping into this already-created, not-yet-arrived inventory is an efficient way to ensure there are enough units to satisfy demand without risking either over-purchasing or interim out-of-stocks.
Create one digital inventory pool to power every channel
Shoppers expect to research, compare and purchase products through whichever channel they choose to shop. Many brands are expanding into social shopping and marketplaces and building their own native mobile apps to meet customers where they’re already scrolling.
However, purchasing and managing web, mobile, social, store and marketplace inventory pools separately is a recipe for compounded data accuracy issues and crunched margins. The alternative is to share inventory data and manage a single, real-time pool for every demand and fulfillment channel. An omnichannel strategy that fulfills from a single digital pool means that an Instagram purchase can immediately update the available quantity on the website. Sharing event data across channels creates a single source of available-to-purchase inventory, eliminating the risk of over-promising inventory in one channel or facing gluts where supply is bigger than demand in another.
Investing in real-time data visibility is key to future scalability
While each of these strategies can improve margins, increase revenue and improve customer retention, they’re not risk-free. Underlying infrastructure constraints may contribute to inventory inaccuracies, data processing delays and disjointed customer journeys.
Many platforms, like Shopify, can power the front-end needed to offer these customer experiences. Often, though, brands are stuck with back-end systems that simply can’t keep up with the speed and amount of processing power needed to offer a seamless customer journey — which explains why 22% of retailers believe that their current tech stacks are not sophisticated enough to support new omnichannel strategies.
Increasingly, brands are moving away from monolithic systems and are instead building their tech stack around a network of modular components that improve flexibility, functionality and agility. For brands looking to create seamless integration across online and offline environments, fulfillment locations and demand channels, investments that enable real-time data visibility will be critical.
