Real-time inventory management as the basis for the omnichannel future

The daily practice for many retailers consists of a combination between physical stores, a Web shop and various marketplaces. Retailers go to great lengths to merge these channels. Think of order kiosks in physical stores and the separate tabs in the webshop with store information such as opening hours of specific branches. In the recent corona period, this omnichannel strategy was expanded in many cases to include click-and-collect capabilities, and so there are more examples of cross-pollination between the webshop and physical stores. There's just one problem: It often doesn't work optimally.

Peeking into the store shelf

In fact, the current situation is only a first step, because real customer service is actually still lacking. For example, how many chains give consumers real-time online insight into the exact physical store inventory of a product, i.e., per branch? And if this is already the case, how often do you then get the option to also reserve these products directly for pickup? The answer, unfortunately, is "not often." All the while, consumers increasingly prefer to peek at the store shelf from home before actually shopping. In short, there is still a world to be won when it comes to inventory management, being able to provide real-time insights and meeting delivery promises at retailers with such an omnichannel strategy.

Unsurprisingly, many retailers are not yet ready for these types of customer-facing services across their various channels. For example, the systems in the background are often not yet coordinated in such a way that retailers can really offer their potential customers more information in the purchase process through a powerful combination of online and offline. After all, the web shop is often only connected to an e-commerce platform and the ERP system, but this does not include the ability to exchange stock information at product and branch level with the stocks in the physical stores. And that is not surprising, because that is not at all what it is intended for. After all, it's about insight into the stocks of not only the web shop or marketplaces, but at the same time also (or especially) those of the store branches.

Offering more to the consumer

However, there is a targeted need for such insight, both from the internal organization and from the consumer. Especially since the advent of click-and-collect, the need for detailed stock information at product and branch level has actually only grown. After all, anyone who wants consumers to order items online and then have them picked up in a store of their choice needs to know in detail exactly where the items are located (and, moreover, be able to share this information with their customers on the product pages of the web shop as well).

Indeed, consumers also ask questions about a product's specific inventory information during the product purchase process. For example, potential customers who want to get their hands on the item quickly - and who doesn't? - like to know how much a product is in stock at a particular store. That way, they can possibly pick it up right away, in the quantities they want. But why not let these customers reserve that item directly online, so they can be sure they can then actually pick up the product themselves in the store? A tour of the fields tells us that currently it is still more often not possible to do this as a customer.

Therefore, the solution to better order and inventory management can be found in the integration of a solid order management system that provides real-time insight into the numbers and location of product inventories. By getting instant answers to questions such as "how big is my inventory?" and "where exactly are my products?" a retailer can benefit greatly for its own business process, but also benefits the consumer!

Order management system

In our view, the solution therefore lies in a good order management system that, in addition to many other functions, also allows you to keep this kind of inventory management and delivery promises more transparent and in order. Such a system must first work well with existing ERP and e-commerce platforms, such as Magento Open Source, Adobe Commerce or Shopware. These types of e-commerce platforms still leave out the order management component. That's fine, too, because if they did, you still wouldn't have a solution for your physical stores and any marketplaces. Separate tools are available for the latter sales channel, but they still do not provide a solution for physical store inventory management and related consumer services.

In addition, it is often smart to choose a system that is modular in design so that you can deploy and integrate modules separately, so even if you only want to build one of the features into the landscape. You can then choose a solution for specific problems in inventory management or the delivery promise, and so you don't have to switch completely to the whole platform at once. As far as we are concerned, an OMS should be at the heart of every omnichannel organization, but a system that can be deployed in parts also has advantages. Particularly with a cloud-based system, implementation times are extremely short partly because of this.

When it comes to its place in the stack, the OMS sits between the ERP and the e-commerce platform. For retailers, the ERP system is often the system for recording and capturing data. At the other end of the spectrum is the e-commerce platform. You can do a lot with this, but in our view it is not useful to use it to control your logistics and financial processes. So an order management system is in between. This gives you as a retailer the advantage that there can never be ambiguity about where what stock is. In addition, you can use 'smart rules' to determine which stock or products to show or not show, tailored to each channel. So after integration, the OMS is the central point where all sales channels come together, possibly with connected dropship parties, which are controlled by the OMS. We ourselves developed TableTop as an OMS, but of course other options exist. Search, compare and think carefully about which of the features and options described above are important to you.

Tomorrow's winners

In short, retailers are still too often opting for half a solution now, because that's "the way it grew. The downside is that they become less flexible, both internally and externally. By integrating an order management system, you as a business owner secure a stronger connection with the consumer, for the longer term. Because with an increasingly critical shopping consumer, the retailers who lay the foundation of good order management today will ultimately be the winners of tomorrow.

This article by our colleague Alexander Robijn was recently published on the Emerce website.