Although inventory levels can cause many unpredictable challenges for retailers, it is also the one thing that connects them to their customers. Each time a customer makes a purchase, whether at a brick-and-mortar store or online, retailers have a chance to make an impression and create customer loyalty. Therefore, retailers have to be agile and prepared for all possible circumstances that could occur before, during, and after a purchase. Replenishment plans, shipping disruptions, and consumer demands are all examples of what could affect inventory and keep retailers on their toes. However, preparing for these possibilities and anticipating change can lead to success.
Purchasing Behavior – A Trend of Ambiguity
Numerous factors like fashion trends, weather, and ease of purchase can sway purchasing behavior. When new merchandise hits the shelves it can be difficult to predict what will be a popular item or how inventory will move. This past January, retailers experienced an influx of winter inventory following the warmest December in history1. This leaves retailers between a rock and a hard place of either scrambling for additional space in their distribution centers or choosing to heavily discount the merchandise. Ten percent of online sales in North America were generated by special promotions and discounts2, during which inventory can be shuffled around to avoid carrying costs. Having distribution centers in optimal areas can help the flow of goods to stores and customers. Retailers may choose to even invest in shared warehouse space for seasons when they know they’ll have extra inventory.
Keeping Up & Replenishing Inventory
The planning and execution of shipping inventory to stores and directly to buyers are the basis for customer loyalty. This past Cyber Monday, out of stock rates reached a record high3. When items aren’t readily available or in stock for purchase, retailers risk losing the sale and potentially the customer’s future purchases. To avoid stock outages, it’s important for companies to secure transportation capacity. Transportation providers that offer both dedicated fleets and non-asset logistics services can deliver options that keep stores stocked – even during surges.
Shipping & Handling For All Circumstances
Shipping time is more impactful than ever in the buying cycle as e-commerce sales continue to grow. Twenty-two percent of customers state that flexible delivery options would boost their customer loyalty4, making cost and shipping speed competitive advantages for shippers. As more retailers offer free shipping, ship to store, next day delivery or, same-day delivery, more and more customers are demanding these options as the new normal. Establishing distribution centers closer to major markets can help you reach consumers during these tight delivery windows.
In 2015, a fair share of shipping disruptions took place. This time last year, the Northeast experienced record-breaking snowfall that made shipping difficult. In the summer, the West Coast saw disruptions as port workers went on strike. Just this past month, workers at the ports in New York and New Jersey have begun to strike as well5. With these unforeseen events, execution is critical to continue moving inventory. In some instances, retailers diverted ocean carriers to different ports or shipped via air instead. Having the right relationships in place can make your supply chain more nimble, flexible, and ready to adjust to the unpredictable.
Now that customers have access to numerous brands and outlets in the palms of their hands, it has become much more difficult to gain customer loyalty. In a multichannel environment, it’s important for retailers to be agile and prepare for all possible challenges. With the right relationships and supply chain partners, retailers can leverage more resources whether things go as planned or not.