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Inventory Intelligence Delivers On The Omnichannel Promise

Omnichannel retailing gives stores omnipresence, an advantage once claimed exclusively by online merchants, and affords stores the opportunity to offer their merchandise to shoppers at the moment of interest, and sell at the moment of decision, without sacrificing their environmental and interpersonal distinctions and the instant gratification of in-store pickup.  But omnichannel raises shoppers’ expectations with a promise of availability. 

Integrated inventory intelligence is essential to deliver on that promise. But even more, it future-prepares retail by eliminating information islands, adapting quickly to new processes and technologies, and keeping cost and waste low. Retailers who succeed at integrating their inventory intelligence for shoppers, associates and managers can cut costs, accelerate turns, and build revenue by driving high-fidelity information back into the supply chain, aligning it with shopper demand.  Retailers who fail, will subject omnichannel shoppers to a fragmented retail landscape, marked by jarring, disconnected changes and unreliable information.

Retailers, suppliers and software providers have been working on cross-channel technologies, but IT integration alone can’t provide the integrated intelligence that omnichannel retail requires. Quality information depends on trustworthy, up-to-date inputs and outputs, organized into actionable information, to create what we call integrated intelligence: spanning physical locations, technologies and time. 

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Integration across physical locations
Retail supply chains are vast, efficient, and — considering their complexity — very accurate. But even the fastest, most accurate supply chain is at the mercy of poor-quality information from retail endpoints.

And that’s where information risk sneaks in, from inputs and outputs outside the “walled garden” of integrated supply chains, and especially inside the store:

  • At the back door, inputs must document a complex array of sizes, styles, colors, and options, and outputs must reflect the same information on returned items.
  • On the items themselves, inputs and outputs are coded in tags that must be compact, detailed, and tamper-resistant yet easy for store associates to remove.
  • At the point of sale, systems must capture transaction, loyalty-program, gift card, and coupon data, and help detect, remove, and recirculate tags.
  • At the front door, inputs and outputs should show real-time store traffic and intercept shoplifters without intruding on the legitimate shopper’s experience.


Integration across technologies

Effective omnichannel retail needs to overcome suppliers’ attempts to keep their solutions exclusive and integrate:

  • Execution, task management, and workflow, so a task like “enter line item” means the same thing on a POS terminal as on a smartphone.
  • User interfaces and reports, so systems give users, the same information in the same way, even when it comes from different sources.
  • Sensors with high-fidelity data, so inputs span sensor technologies, and offer enough detail for shoppers to make meaningful choices.


Direct and indirect business benefits

What can retailers expect to gain from investments in inventory intelligence?  First and foremost, they will have the framework to implement omnichannel retailing with confidence — opening shopping to omnipresent online and mobile environments, while retaining focus on the store.  They can also expect direct and indirect business benefits in the areas of cost reduction, inventory management, and revenue growth.

Workforce managementInventory intelligence helps improve labor utilization, productivity and morale in stores and distribution centers through automation, accuracy and upscaling job responsibilities.  It cuts the time spent on manual entry and inventory counts, and the time wasted following — and then correcting — information that is either wrong or insufficiently detailed for its intended use.  Accurate inventory, allocation, and replenishment information reduces pre-emptive buying and the inevitable markdowns and write-offs that follow from carrying too much stock. And an automated system that offers top-to-bottom visibility cuts losses from internal shrink fast.

Inventory managementFast processes and lean inventories improve inventory turns; and reliable tracking of items and store locations helps stores reorganize their stock to maximize floor-space utilization and sales per square foot.  More accurate forecasting, ordering, allocation and replenishment intelligence helps stores tune their product portfolios, and make better use of fixtures, displays and other capital assets. Data-based collaboration with supply-chain partners raises compliance with order cycles and delivery requirements, and opens opportunities for closed-loop end-to-end collaboration, for example in tag reclamation programs.

Revenue growth. The real benefit from omnichannel retailing is revenue growth, from:

  • Fewer abandoned orders due to out-of-stock events.
  • Higher loyalty, from more rewarding shopper-associate interactions and in-store experiences.
  • Greater merchandising potential, using clienteling and customer relationship management (CRM) information from in-store, online, and mobile channels.

High-quality inventory intelligence collected from stores in real time feeds back through the entire supply chain, harnessing its efficiencies in the service of shoppers’ demand.

Conclusion
Inventory intelligence is a fundamental component of modern retailing — not only to support omnichannel initiatives, but to assure availability on store shelves or to ship, building shopper satisfaction and financial performance. Inventory intelligence aligns the supply chain to demand, and helps retailers keep the promises they make to online, mobile, and in-store shoppers. It coordinates information up and down their organizations and back along complex supply chains. Flexible solutions, properly deployed, can help retailers seize new opportunities, avoid predictable risks, and prepare themselves for a future that combines shop-from-anywhere convenience with an enhanced shopper experience centered at the retail store.


With 15 years of experience in retail technology solutions, Bomber has held a number of product management & marketing positions at Tyco Retail Solutions and Sensormatic Retail Solutions. As Director, Softgoods Solution Marketing for Tyco Retail Solutions, Bomber spearheads key inventory intelligence and loss prevention product initiatives designed to help retailers address key challenges. An active member of trade organizations globally including VICS, AAFA (American Apparel and Footwear Association) and EMA (Entertainment Merchants Association), Bomber has also received multiple design patents in EAS and RFID technologies. Bomber holds a BS degree in Packaging Science from Clemson University.

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