Omnichannel retail has revolutionized the way retailers interact with customers, allowing them to engage and sell to customers through multiple channels. With the rise of omnichannel retail, the complexity of inventory planning has increased, as businesses now need to ensure that they have sufficient stock levels to meet demand across multiple sales channels.
Effective inventory planning is crucial for omnichannel retailers, as it helps them manage inventory across various channels, optimize stock levels, and minimize stock-outs. Investing in the appropriate inventory planning softwarehas become crucial for businesses. In order to provide customers with a seamless shopping experience, efficient inventory planning software is a must-have.
Understanding the Omnichannel Landscape
An omnichannel retail business operates through multiple channels, including brick-and-mortar stores, e-commerce websites, mobile apps, and social media platforms. These channels may have different demand patterns, order cycles, and lead times, making inventory planning a complex process.
To effectively plan inventory for an omnichannel retail business, businesses need to have a clear understanding of the demand patterns across different channels. They should also analyze data from all sales channels, including online and offline sales, to identify trends and forecast demand accurately.
Inventory planning softwaresin modern times enable businesses to effectively manage complex supply chains and place orders from multiple vendors. These systems provide real-time visibility of inventory, which is crucial in determining when to reorder specific items. Moreover, inventory tracking facilitates businesses to keep track of products in storage and during transit while providing up-to-date information on their order status.
By using an inventory planning system, businesses can lower costs by accessing real-time stock levels and gaining valuable business insights. Furthermore, retailers can adjust their stock levels and fulfilment arrangements as needed.
Optimizing Inventory Planning for Omnichannel Businesses
The following are ways to enhance your omnichannel inventory planning, enabling you to fulfill customer orders accurately on every occasion, acquire appropriate stock quantities, and satisfy rising demands.
Using Technology for Inventory Planning
To ensure the success of your omnichannel strategy, it is essential to have a centralized inventory planning system that provides complete visibility of your stock, whether it is located in your warehouse, on physical store shelves, or in transit. Inadequate visibility can quickly lead to the collapse of your omnichannel strategy.
To achieve in-depth visibility, you must consolidate and organize your inventory data in a single, easily-accessible location, and synchronize it with real-time data from each of your marketplaces or stores. By utilizing inventory planning software, businesses can analyze data from multiple sources, such as point-of-sale systems and supply chain data, to more accurately forecast demand.
Through the use of inventory planning software, businesses can optimize their stock levels by scrutinizing sales patterns and pinpointing slow-moving products. By adopting technology for inventory planning, businesses can simplify their inventory planning procedures and guarantee they have an adequate stock level to satisfy customer demand through all sales channels.
Supply Chain Integration
Connectivity is a critical component of an omnichannel strategy, and the key to achieving this is by integrating all aspects of your supply chain. This includes suppliers who transport goods to your fulfillment center, employees who handle returned items, and all other intermediaries.
Research shows that organizations with robust supply chain capabilities experience revenue growth significantly above average, with a success rate of 79 percent. However, as the number of sales channels increases, the supply chain becomes more complicated, particularly with options like buy online, pick up in-store (BOPIS), curbside pickup, and ship-from-store delivery.
Omnichannel inventory planning software simplifies the process of streamlining the supply chain, making it easier to manage. The software should ideally integrate with your accounting and CRM systems, as well as shipping and logistics partners.
Forecasting demand accurately is crucial for inventory planning as it helps businesses determine how much inventory they need to hold to meet customer demand. In an omnichannel retail business, demand can vary across channels, making it challenging to forecast accurately.
To forecast demand accurately, businesses need to analyze data from various sources, including point-of-sale systems, web analytics, and customer feedback. By analyzing this data, businesses can identify trends and patterns in customer behavior, enabling them to forecast demand more accurately.
Analyzing Lead Times
Lead times are the time taken by suppliers to deliver products to the retailer. The lead time can vary depending on the supplier, the product, and the mode of transport. For an omnichannel retail business, analyzing lead times is crucial as it helps them ensure that they have sufficient stock levels to meet customer demand.
Analyzing lead times can help businesses determine how much safety stock they need to hold to minimize the risk of stock-outs. Safety stock is the inventory that a business holds in excess of the required inventory to meet demand. By holding safety stock, businesses can ensure that they have sufficient inventory to meet demand even if there are delays in supplier deliveries.
Stock Inventory Across Locations
When expanding your sales channels, you may need to deal with more suppliers, warehouses, and distribution centers. Additionally, you may decide to open new physical stores. Naturally, this increase in complexity is more challenging than having a single supplier delivering to a single warehouse.
Expanding your business also requires scaling your logistics capabilities. Supply chains that expand beyond a single distribution hub rely on demand forecasting. However, this can only be achieved by utilizing a centralized inventory planning solution that integrates all distribution centers into a single system.
Integrated Supply Chain
To create a truly comprehensive platform that works for the entire organization, the inventory planning software should not be limited to supply chain management only. It should also integrate accounting, channel management, shipping, and other relevant solutions.
This approach leads to a streamlined and effective process that eliminates silos, allowing inventory data to serve the whole enterprise.
About the Company
Kronoscope, a demand and inventory planning software powered by AI from Fountain9, enables retailers to optimize their inventory levels across various channels by accurately forecasting demand for each SKU and determining the required quantities to meet demand effectively. The software ensures a high level of product availability, predicts future inventory needs, and optimizes inventory levels to meet customer demand at the right time, thereby reducing losses due to overstocking and out-of-stock scenarios. With Kronoscope, businesses can align with customer expectations and increase their revenue while minimizing the risk of overstocking and understocking.