Despite the rush to omni-channel, retailers still cannot see all obstacles in their way when it comes to inventory visibility (to paraphrase the Johnny Nash song).
I recall conversations with retailers as early as 2011, when I was helping them with ERP updates, along these lines. They understood the theory “if you cannot measure it you cannot manage it,” which was right. But they are still struggling with this today. I continually hear stories about retailers trying to get an understanding of their inventories – even five years into a new ERP or merchandising system replacement project.
Retail consultants RSR told us in February last year: “One of the simplest ways retailers can be more omni-channel is to expose store inventory availability online.”
To do this they need a real-time (or near-real-time) understanding of inventory. Gartner research says that 54% of retailers say fulfilling online orders from store increases store inventory by 10%. We have seen some retailers’ inventories increase as they have attempted to address the needs of the omni-channel shopper; H&M is just one example.
Brian Kilcourse, managing partner of RSR, recently did a webinar with us on the subject of real-time retail. He was very clear that the omni-channel challenge meant that fast access to accurate and up-to-date information has become a critical success factor for retailers. This means information about customers, inventory and product.
He was however sympathetic with the small amount of progress that has been made and talked about how IT departments have become “plumbers rather than business partners,” with less than one quarter of IT spending going into new development.
But the subject of “real time” kept coming up – driven by research figures:
- 65% of retailers said that IoT will help them get an accurate view of inventory.
- 66% of retailers said that a real-time view of what is happening in the business is something that creates a lot of value.
He also provided some clear advice on how to become more real time – this included:
- Create an agile technology footprint.
- Use off-commercial applications for non-differentiating operational processes.
- Move to a “services” orientation.
- Avoid technology lock-in.
This is great advice and resonated strongly with customers I have discussed it with. Retailers have to focus their efforts to ensure they are getting the right information and turning it into a real-time view of their business – operations, customers but inventory is a great start. Maybe then the dark clouds will be gone, and they will see a bright, bright sunshiny day ahead.
You can watch the full webinar by clicking below.