Recently, I focused on omnichannel operations, and provided tips for handling seasonal and holiday volumes. Now, I want to turn the focus to inventory management, specifically for omnichannel. I stated in my previous post that according to Forrester, 71% of consumers expect to be able to view in-store availability online while 50% expect to buy online and pick up in-store. Companies have to align themselves with a third party logistics provider (3PL) that understands this growth pattern in order to have an efficient and seamless omnichannel distribution strategy.
Top 5 Key Inventory Management Strategies:
Customers want to be able to purchase product online, buy online and pick up in store, and then also buy online with the ability to return to a store. The number of options can make it difficult for retailers, especially if all of these channels are not on the same inventory management system. With a 3PL involved, it can cause another hurdle as inventory will have to be reconciled in multiple locations. We will further discuss systems in a moment.
Co-locate inventory for B2B and B2C
With all replenishment and picks being handled in the same area, you are able to control fulfillment costs for labor and inventory levels. This will cut down on transit time through the pick process, pulling from the same inventory pool. It is important to maintain your inventory on one warehouse management system for online orders or to be picked up in store.
One of the largest challenges is when inventory and order management is not integrated across all channels. The key to a successful operation is maintaining all channels on the same system. This will make the process easier for the 3PL and customer.
Scalability & Flexibility
Consumers expect retailers to keep pace with the constantly changing environment and offering more flexible delivery and return options is a must. Just like retailers, fulfillment companies have to understand these needs as well. Processes and procedures will change with the evolving channels so you need to stay flexible. Communication and quick responses will keep the operation running efficiently and ultimately keeping consumers happy to drive more business.
If you are looking for a fulfillment partner to handle this operation, make sure the 3PL has experience working with retailers and omnichannel operations. They are complex and require an expertise. You want to make sure they will not be shocked when operations change and holidays spikes occur, as most ecommerce retailers process 40% or more of their volume during the 4th quarter.
Convenience and flexibility are what the consumers want. Inventory management and optimization is an ever-evolving process in today's dynamic retail environment. As a retailer and 3PL, we have to adopt these same traits to cut costs and handle efficient omnichannel operations.
For more information on how IDS can provide solutions for your omnichannel needs, contact us today!