Can Retailers Maintain Inventory Levels This Holiday Season?
It’s not news that the holiday season 2020 will look different from the holidays of years past. We’re already seeing that e-commerce is booming, though we’re still dealing with manufacturing and inventory slowdowns from the lockdown. In turn, global supply chains are struggling to catch up and maintain inventory levels during a period where the retail sector continues to be challenged by various factors including heightened consumer demand and shipping expectations.
With more holiday shoppers buying online, retailers are struggling to figure out how to handle demand spikes in association with lower inventory and slower supply chains. What can retailers do this holiday season to maintain inventory levels and increase customer satisfaction and service?
Maintain inventory levels by utilizing a well-rounded inventory management system
Inventory management systems address these sorts of challenges. To succeed in the 2020 holiday season, retailers need to be certain that goods are in the right place at the right time, especially if you’ve been utilizing a distributed inventory model. If retailers misread demand, it can be even more detrimental than not having inventory coming through the chain at all; basically, you end up with wanted inventory sitting (and costing money) in the wrong location. This will result in a loss of resources shipping the product to that wrong location and then doubling the cost to then ship it to a different location where demand truly lies. That’s why accurate inventory prediction, flexibility, and an ongoing effort to maintain inventory levels is vital to handling holiday stock levels.
The best way to predict, manage, and adapt to changes in inventory in real-time is with an advanced inventory management system (that may even incorporate artificial intelligence). These IMS systems have reporting and analytics capabilities that tell you where demand is strongest, how to move supply accordingly, how to minimize risk of running out of stock, how to lower carrying costs, and even how to effectively manage an omnichannel experience. The goal of your IMS is to have the most accurate predictions possible with the most flexible contingency plans if and when those inventory predictions aren’t spot-on.
Don’t have an inventory management system in place already? Now might not be the right time to start upending your supply chain right before the hectic holiday season. Redwood Logistics offers TMS implementation for your entire supply chain, with an experienced team and customized plan that delivers. If you’re looking for superior inventory management without implementing major new systems this season, partner with Redwood Logistics to keep moving forward.
Create an omnichannel business
Too many retailers have separate business models and supply chains for their ecommerce and in-store factions. But it’s time to realize that they’re not different operations, and combining the two will radically improve customer service, fulfillment, and inventory levels. If you operate the same supply chain for in-store and online, you can have improved inventory predictions, a single inventory source to pull from, and you can utilize both avenues to ensure consumers are able to receive their goods quickly.
For example, you can employ mobile POS devices in-store to have fast, accurate inventory tracking that tells in-store employees and online shoppers exactly how many pieces are in a given location for store pickup. The more streamlined your business, the easier inventory management will be.
Counteract shipping delays with BOPIS and curbside pickup
Shipping delays are inevitable this holiday season, especially for e-commerce shoppers, so the goal is to minimize these delays as much as possible. A lot of retailers prefer to ship inventory to a store location since it’s cheaper and simpler than distribution centers.
If you have a well-run omnichannel system, you can even use your store as a fulfillment center to save costs and streamline inventory. So, if you want to keep inventory in your store, encourage local shoppers to buy online + pick up in-store or pick up at curbside to maintain social distancing. You can even encourage a BOPIS with a small discount. You’ll save tons of money on shipping to the customer’s house (especially with complicated last mile logistics in 2020), so offering a small discount is a great way to push inventory out without too many logistical headaches.
Plus, once you have a customer in-store or at curbside, you can delight them with customer service and/or upsell on other items.
You should also allow returns at local stores. It’s not only less hassle for the customer, but you’ll also have your stock available right away rather than losing stock to the reverse last mile or waiting in distribution centers without a home. Plus, then you can issue a store credit or refund quickly, so the consumer can buy a different item from you before the season is over (which is good for the consumer and the retailer).
Encourage shoppers to buy early
This 2020, holiday shoppers have already started purchasing their holiday goods (primarily online). October has become the start of this holiday season, both because consumers are bored and looking to shop and also because they want to avoid holiday crowds following Thanksgiving. You can use this early shopping trend to your advantage to ensure any delays in shipping times don’t result in gifts coming after Christmas.
You can encourage shoppers to buy early by offering early bird Black Friday discounts and highlighting shipping cut-off dates. This will give ample time to understand demand and ship inventory where it needs to go, further reducing fulfillment strains during the busiest weeks of the holiday season (aka the last two weeks before Christmas when last-minute purchases are aplenty).
Be transparent with consumers
Inventory shortages are significant this holiday season, and there’s only so much you can do to get around it with slower supply chains. Transparency is going to be vital to ensure customers stay happy and satisfied with your business while inventory shortages and shipping delays are happening.
Customers understand that COVID-19 is impacting supply chains, and they’re willing to give you a little leeway in terms of shipping delays—as long as you keep them posted on where their products are and when they’re expected to arrive. Tracking numbers and email/text updates are little additions that will make consumers radically more satisfied with your brand this holiday season.
Note: Customers are not going to be happy if you say something is in stock when it’s not, so make sure you always have updated inventory and try to maintain inventory levels as much as possible.
Focus on manufacturing and fulfillment
Inventory doesn’t just start once products hit the shelves. To maintain inventory levels, you first need strong manufacturing and fulfillment processes. The two greatest ways to do this are to diversify your vendors to ensure incoming inventory and to strengthen warehousing systems.
- Diversify distributors: If there is a disruption or slowdown with one vendor, you don’t want the rest of your supply chain to fall apart. Diversify your manufacturers and shippers in terms of location, size, and relationship to ensure you’ll always have inventory coming into your distribution centers. Can your supply chain handle upstream disruptions?
- Optimize warehousing: Remember that your warehouse is the “home” for your inventory, so you want that home to be as functional as possible. Get more in-house employees to meet the rising demand due to the holiday season and pandemic. Employ smart warehouse and inventory management technologies. Streamline how employees pick and pack goods. Consider a warehouse management system. Utilize RFID in warehouses and stores to ensure you know how much inventory you have and where it is and to streamline the picking process.
Focus on service
At Redwood Logistics, we believe success ultimately comes down to technology and service. Leverage all of the technology available to you—from transportation management systems to predictive inventory analytics—to deliver the highest possible service and transparency to consumers. Customers are going to be more understanding this year, but the retailer still has the important job of delighting and wowing the consumer, even amidst the changing landscape. Optimize inventory by streamlining connection, visibility, and seamless integration across your supply chain.