Challenges of using store inventory for online order fulfillment

female asian shopkeeper looking at inventory challenge on POS tablet

Omnichannel retailers aim to satisfy customers no matter how they choose to engage: Online, in-store or a combination of the two.

It’s never an easy feat, as success depends upon a tightly integrated front and back end in order to provide customers a seamless, successful shopping experience.

But since reopening after COVID-19 lockdowns, many retailers have had to carefully assess how they were navigating the use of store inventory for their omnichannel order fulfillment strategies.

Inventory visibility across channels

black woman standing at a desktop displaying an inventory spreadsheet and chart

Management of inventory is a particularly thorny issue for any retailer with an omnichannel philosophy.

The retailer must first accommodate multiple sales channels simultaneously: An online shopper must be able to “see” what products are in stock just as easily as one who is physically in the store.

Then, the retailer turns that multi-channel strategy into an omnichannel one when, for example, it allows a customer to: shop for items on a mobile device; log onto a retailer’s site hours later on a computer and access the same shopping cart; check availability online and place an order for curbside pickup.

Discrepancies in physical inventory counts

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Many retailers were able to launch – and maintain – a buy online, pickup in store (BOPIS) strategy.

However, since stores reopened, inventory counts are becoming muddled as retailers had been using store inventory to fulfill online orders.

Being able to reconcile what has just been purchased online with in-store inventory – and meeting the expectations of both types of customers — is a gargantuan task.

Customers should never see an item in stock online and discover it is sold out once they reach the store.

Some of the reasons for such discrepancies include:

Shrinkage: Shoplifting and employee theft account for substantial loss of inventory. Fraud and administrative errors are also to blame.

Data inconsistency: Online ecommerce, in-store POS systems aren’t tightly integrated or are being manually updated, so floor count may be inaccurate.

Resource strain: Sales associates are performing fulfillment tasks, so they have less time to help shoppers on the sales floor locate items.

Retail Pro platform for omnichannel retail management, inventory management, POS

Payment timing for BOPIS orders

different combos of inventory separated into bags for BOPIS

In addition, payment timing can cause inventory challenges. Items that are part of orders that are paid for online but picked up at a store are likely removed from inventory earlier than those that are paid at the time of pick up.

Paying before pickup not only expedites that process for ecommerce shoppers, but for those in-store as well. In-store shoppers experience longer wait times when online customers must join the line to pay and pick up their orders.

Poor fulfillment has a significant negative impact on customer retention. It is difficult to have the entire picture of what inventory is where throughout all channels.

Having accurate inventory visibility – which provides stock, order monitoring and tracking information — is crucial for a successful retail operation.

That requires a combination of technologies such as POS software tied to barcode scanners, RFID, warehouse execution software, etc.

The result is a retailer that meets, and sometimes exceeds, customers’ needs.


RFID and Your Omnichannel Inventory Management Strategy

shopkeeper checks inventory on mobile device while thumbing through a stack of shirts

A successful omnichannel strategy depends upon having accurate inventory and timely order fulfillment.

Because retailers are fielding orders from different sources – including online purchases with home delivery, online purchase with an in-store pickup (“click and collect”) and in-store purchases —  keeping track of those sales and inventory is mission critical.

Omnichannel inventory management helps the customer make purchases confidently

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Robust inventory management provides the means to get the correct products to customers quickly and efficiently.

Omnichannel inventory management is integrated across all sales channels, offering clear data visibility to retailers, as well as stock information to customers. It’s often coupled with smart warehousing, which automates back-end decisions and tasks, improving employee efficiency.

Omnichannel inventory management ensures that customers who want to use different devices and buy through various platforms are able to do so successfully. Omnichannel is a unified process in which each platform communicates with another, creating a seamless whole.

While multichannel retailers sell using many platforms, most of them are unintegrated. Store and online inventory management must be integrated with your other systems, including order and CRM software.

By integrating the inventory management systems, retailers have improved data visibility. All data on sales, suppliers, returns are in one centralized location.

When orders are placed – in any channel – stock is updated in real-time. Therefore, all employees, from the inventory picker to the store manager to the customer checking online supply, can be confident in the data they access, even if the orders were placed in a different country or channel.

RFID innovates, making taking inventory fast

Despite the heavy-hitting technology omnichannel retailers rely on today to conduct their daily business, physical inventory counts continue to be invaluable.

Such counts verify inventory and ensure there are no variances caused by overages or shrinkage, for instance.

However, this activity doesn’t have to be manual. RFID technology can help speed up inventory counts while providing workflow automation.

An RFID tag is placed on stock and read with a handheld device. RFID can scan or “read” many items at once and doesn’t require line of sight.

Products or pallets can be quickly read without positioning the tag directly in front of the reader, a big advantage in warehouses or other dense environments.

How RFID further empowers omnichannel operations

shopkeeper lady looks at tablet while in an aisle of hangers in store

Keeping inventory counts accurate requires the integration of in-store POS that reflects the actual count on the floor, which is reflected in online data.

Although back-end technology is important to maintain accuracy, inventory is a customer-driven aspect of business.

Improving practices and systems assists retailers to meet more customers’ expectations, increase satisfaction and retain more customers.

Tailoring an omnichannel inventory management system to focus on customers helps retailers reap the benefits of having a loyal, satisfied customer base.