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

female asian shopkeeper looking up & out, wearing face mask and carrying two shoe boxes
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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

Girl sitting on couch with laptop on her lap holding up her credit card as she looks at the screen happily
Photo by Andrea Piacquadio from Pexels

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.


Why in-store fulfillment is a must for retail & how to pull it off with less resource strain

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Today’s customers are looking for a seamless purchasing experience, whether that’s in-store, online, or a combination of both. But the so-called “last mile” — the time it takes for a shipment to reach a customer —can be a thorn in the side of a retailer. Enter in-store fulfillment. 

Benefits of in-store fulfillment

curbside fulfillment - girl  wearing mask holding shopping bags sitting against her open trunk

Mounting shipping costs are costly for retailers who are reluctant to pass them along to customers who are looking for the best price for every item, as well as free shipping. 

By offering in-store fulfillment, the delivery process can be seamless as customers choose from curbside delivery, click and collect, and buy online/return in-store options. 

Employees can address customer requests in real-time, monitor inventory, and deliver attentive service.

In-store fulfillment means retailers no longer have to route products exclusively to a warehouse.

Nordstrom and Kohl’s are excellent examples of putting the strategy into practice. 

They can fulfill orders from the store closest to the customer’s location, leveraging their stores as fulfillment centers and shipping orders directly to customers, reducing costs and speeding up deliveries.

Requirements for in-store fulfillment

sales associate executes sale fullfullment using Retail Pro Prism POS

While the benefits are clear, implementing in-store fulfillment requires an omnichannel strategy in which inventory data is tightly integrated across ecommerce and the in-store POS

Ship-from-store, ship-to-store, and in-store pickup can then be handled with one solution that optimizes in-store inventory usage and reduces the time and cost for fulfilling online orders.

Perhaps the most daunting part of the process is getting a 360° view of inventory by connecting data from e-commerce sales with in-store transactions. 

Determining the correct timing for syncing online data and orders with in-store POS is vital; solutions can be configured to sync data at any interval, including real-time, hourly, nightly, or at other intervals that make sense for a retailer’s operations and network capacity.

If syncing lags, inventory can fall behind, and there’s a risk of selling out of products that have already been committed to online orders. 

With seamlessly connected channels, shoppers can buy products online and pick them up in the store that same day. 

Store associates can receive pick lists to select and package the products ordered online. 

Selecting off-the-shelf products increases inventory turn and decreases the duplication that comes with holding a separate online order inventory.

In-store fulfillment completes the frictionless purchasing experience. 

Customers get quick, free delivery — often receiving their items even faster than ordering online. 

Retailers, in turn, move inventory more rapidly, helping to maintain price stability. 

Both shoppers and retailers benefit from a more efficient customer experience.


In-store shoppers, in-store fulfillment: Planning for inventory challenges

safe retail shopping during COVID

Handling a supply chain is always part art, part skill — but during 2020, it sometimes seemed like it was also part magic act.

Getting products on shelves was a testament to the relationships retailers had built over the years with their suppliers, and only the strongest survived.

COVID inventory crisis

man staring at wall with papers pinned to it

A little more than one year ago, COVID-19 lockdowns began — ushered in by a period of consumer buying never before experienced.

Within days, paper goods and disinfectants were out of stock, available only on the black market for outrageous prices.

A year later, quarantines are gradually being lifted, in some areas more quickly than in others, and most — if not all — of the items once in short supply are reliably back on retailers’ shelves.

A year ago, however, many retailers were forced to close very quickly, with little notice and stockrooms full of inventory.

Those retailers not considered “essential” were left with a surplus of stock that during the ensuing weeks and months became outdated and unwanted; many people weren’t leaving their homes, so foot traffic hit all-time lows.

Adapting stock strategies

Online retailers and brick-and-mortar shops alike depend on good inventory management to run an efficient business.

Now that stores are open on a more regular schedule, their managers are recognizing that inventory strategies must change.

By offering a more curated selection than pre-COVID, retailers can more adeptly handle the ongoing uncertainty in customer traffic and buying behavior.

A number of retailers, including Gap and Nordstrom’s, reportedly reopened with a limited stock strategy, to hedge against a less-than-robust shopping season.

BOPIS challenge

In some respects, offering customers the option of buying online, picking up in-store (BOPIS) saved the day.

Many retailers further simplified the process for customers by offering curbside pickup; customers never had to leave their cars to retrieve their purchases.

By allowing customers the flexibility of purchasing online and retrieving products safely without leaving their cars, retailers eliminated a point of customer friction: Customers had the convenience of ordering online plus, in many cases, same-day pickup.

However, retailers faced the challenge of maintaining the right amount of inventory in stores to keep brick-and-mortar shoppers happy while still profiting from opportunities to move inventory through digital channels.

Stores that came up with the perfect balance will likely continue to offer the service post-COVID because of its popularity with customers.

Visibility into inventory movement

Retailers can only be successful at both in-store selling and e-commerce with accurate insight from trading partners into what is coming in and when.

With integrated inventory visibility from suppliers, retailers won’t be risking the safety stock they’ve built for in-store consumers.

For example, sending shipment information within two hours of shipment departure, and including scannable barcode labels on all packages can help retailers manage appropriate safety stock thresholds for in-store and BOPIS experiences.

Inventory management tools like Retail Pro also make the process more efficient for retailers.

When ordering merchandise on a multi-store Purchase Order in Retail Pro, a retailer can generate an advance ship notice for each store so each store knows what merchandise to expect.

When the merchandise arrives at the store, managers can generate a voucher from the advance ship notice to receive the items ordered on the PO into inventory.

Recovery ahead

Inventory management pre-COVID required effort and attention to detail.

During COVID, the supply chain was thrust into chaos, as manufacturers slowed production due to workers’ illness at their facilities, and orders fluctuated from exceeding capacity to trickling in.

Post-COVID, in the weeks and months ahead, the economy will begin to recover, and inventory management will face challenges as demand increases and stock levels race to meet it. When vendors are transparent and help retailers plan based on accurate delivery forecasts, retailers will be able to pursue sales opportunities in digital channels, resulting in improved top-line revenue and contributing to a global economic recovery.


Why the ‘Last Mile’ should be retailers’ first thought

person signing for delivery on ipad over a box that a delivery person wearing a denim shirt is holding

The anticipation of receiving that perfect order can be easily derailed by a poor product delivery experience.

The “ultimate” shopping experience depends on excellence from beginning—the order—to end, the delivery.

How quickly goods get from a warehouse to a customer depends on what’s called the “last mile” of the supply chain.

The efficiency of that final leg ultimately determines the customer’s satisfaction with the buying journey.

The Last-Mile challenge

person in fuzzy brown sweater holding two smaller boxes

Retailers face the challenge of managing their supply chains to keep delivery times short while keeping costs low.

Customers overwhelmingly opt for fast, free delivery when placing orders, which has led to a growing need for a broad distribution network, including warehouses.

Logically, such distribution centers should be in close proximity to the customers they serve.

CBRE Research analyzed the 15 largest U.S. metro areas and found that distances range from six miles in the San Francisco Bay Area to nine miles in the “Inland Empire,” a region east of Los Angeles County.

Not surprisingly, highly urbanized and dense population centers tend to be closer to last-mile facilities, while more suburban locations were farther away.

Proximity is important because customers expect fast delivery.

As Amazon continues to push the limits of logistics by offering same-day delivery, other retailers are expected to provide two-day delivery — at the latest. That final step in the delivery process is the most expensive and complex.

Gather and analyze logistics data

person in front of brick wall in denim shirt holding medium cardboard box

Companies collect so much data that it’s easy to suffer from information overload.

Gathering data is only the first step in understanding what is happening.

The real valuable information only comes to light after the analysis.

Put all of the “last leg” data in one centralized visual analytics tool, crunch the numbers to better understand the ins and outs of the last mile delivery process, and make regular adjustments as needed.

Offer Real-Time Delivery Tracking

Static tracking numbers are so last decade.

Invest in building or sourcing an app for your customers that tracks driver locations live and provides accurate ETAs, like the Uber of last-mile deliveries.

In addition, text messaging customers with updates on the delivery process creates a transparent process that supports a frictionless buying experience.

Many challenges associated with last mile delivery are outside of the retailer’s control, for example:

  • The number of orders picked and packed daily
  • The frequency that orders are picked up by the carrier
  • The proximity of the warehouse to the customers
  • The number of deliveries made daily

Many retail businesses partner with external fleets and use multiple carriers.

But there are ways to improve the “last mile,” and retailers can take more control of their business’s last mile logistics to identify inefficiencies quickly and improve their customers’ experience in a delivery-first world.


Retailers benefit from unified commerce insights

For retailers, a unified commerce strategy is built on the foundation of integrated retail technology for an efficient, frictionless customer experience across channels.

Unified commerce gives retailers a smooth, efficient means of transacting business, because inventory, sales, e-commerce, and fulfillment system data is integrated to regularly and automatically keep inventory availability and customer details synced and up to date.

From Point of Sale to e-commerce, from CRM to inventory management, all these technologies need to be connected so retailers have a clear picture of who their customers are and how to provide what they want.

Interaction with customers

Woman examines various items of dishes. Beautiful woman shopping tableware in supermarket. Manager helps a costumer.

Each time a customer enters the retail store, they leave behind a wealth of data for any retailer who can measure their interactions within the store:

  • What was bought?
  • What was picked up but not purchased in the end?
  • What was the dwell time near products that were not purchased?
  • How long was the customer in-store?
  • Was this an online pickup?
  • Did they purchase other items along with their online pickup?

Those answers, when documented with technology, inform a retailer’s back-end systems, so inventory can keep pace with demand, and so marketing teams can keep pace with customer needs.

To collate and analyze that information, retail processes and tools must be intelligently integrated in a retail management platform like Retail Pro to enable sharing of relevant data across both customer-facing systems and those that integrate with backend vendor systems.

Applications from the point-of-sale report on purchases, inventory, and customer data. Sharing this data with an integrated warehouse management system allows warehouse staff to have insight into stock levels currently on the shelves, and to place orders with suppliers as supplies diminish.

Sharing the data with a loyalty and personalized marketing platform like AppCard for Retail Pro allows marketing teams to create targeted campaigns around a customer’s purchase history.

Consistent data across channels

That principle also applies to in-store sales staff—they should have the same product information available as retailers’ online channels.

Integrating your ecommerce software with your POS can give store staff the visibility they need to serve customers who call in to verify stock availability before coming in.

Customers who started their retail journey at home but then switch “channels” to come into the brick-and-mortar store must be certain that inventory is in sync: Surprises such as realizing that products aren’t in stock when the web site said they were there are unacceptable.

If your website indicates there is a pair of shoes in certain size on the shelf, your in-store staff should be able to verify that through an inventory management application.

Retailers that use disparate, unintegrated systems risk delays in communication because data is manually updated at the end of the day, causing inventory counts to become out of sync and unreliable.



Customer-facing systems for engagement

There are a number of technologies that retailers can put in place to provide a seamless customer-facing experience.

Shelf labels and cameras can map consumers’ movements within the store. That helps in product layout for future products, and in product forecasting. They can also indicate where is the heaviest foot traffic within the store.

Beacons can communicate with an app on the customer’s phone to notify them of product sales when customers are in the store’s vicinity, enticing them to stop in.

When integrated with the POS as well, interactions in the app which originated from a beacon trigger and resulted in the ultimate purchase can be properly attributed to track the efficacy of the tools and campaigns put in place.

The connected data then provides insight also on unvoiced customer needs which are nevertheless discernable through their interactions with a retailer’s various channels.

Integrating data in retail technologies provides the foundation for retailers to more effectively determine and act on customer needs for a better customer experience.


How connected data personalizes shoppers’ experience

Image: Gustavo Fring

Providing a personalized experience that’s “just right” — not overly intrusive but offering information relevant to each shopper — is the Holy Grail of retail.

Deep visibility into data unified across channels and technologies through the Retail Pro Prism platform can give retailers the level of information needed to offer the right products to the right customers at the right time, through a preferred channel or combination of channels.

A single view of inventory, orders and customer data provided by a unified system of technologies offers retailers insights about their entire business in real time.

But unified commerce has a customer benefit also, allowing customers to take advantage of up-to-date product inventories and the flexibility to browse, buy, and fulfill orders any way they choose.

Read now: What does it take to unify commerce?

Creating interaction points to learn what your customer wants

Image: Andrea Piacquadio

Customers want efficient trips and will seek retailers that streamline the purchasing process, and which may include an online-to-offline experience.

Enhancing purchasing channels so they complement and build on each other helps retailers optimize their investments, focus efforts, and support their customers’ journeys.

Omnichannel offers customers multiple touch points, each a part of a seamless experience, and unified data helps retailers deliver instant, informed personalization.

One way to do that is to review past purchase data, converged between transactions in-store with Retail Pro, on ecommerce, mobile, social sales, and any other channels a retailer may use.

But for new visitors, providing interactive content not only engages the shopper but also benefits the retailer by sharing customer likes—and dislikes—with the retailer.

That data helps build a unique profile for future interactions whether online or in-store.

Every personalized shopping experience is created based on customer interactions.

As the retailer determines customer intent, an online strategy must be in place to quickly feature certain products in a relevant manner, with pertinent information and offers readily available and presented to the customer with immediacy.

Matching products to the right customer with personalized recommendations

While customers appreciate personalized shopping, unified commerce also provides retailers the data for targeted inventory.

By converging a customer’s interactions with your brand at various touchpoints into one cohesive customer profile and analyzing that holistic data, retailers can learn what products are popular for which types of customers.

The information can inform text and email messaging through AppCard for Retail Pro, providing personalized content which entices shoppers to visit (or return to) brick and mortars.

Stores can reduce or optimize in-store inventory by matching certain high-inventory products to potentially interested customers.

Based on analyzing shoppers’ data, a store can determine what products will appeal to which customers and present those options proactively.

Communications that are in the know with the customer

Image: Torsten Dettlaff

Customer segments may require different handling; some use email, others text messaging.

Retailers who can reach the customer during the decision-making process will remain top-of-mind as a trusted provider of quality goods and services.

Engagement might be driven through personalized email reminders that highlight where they can pick up their purchased product in-store, as well as recommending complimentary products to the items they just purchased.

Mobile push notifications or text messages can highlight related items to opted-in shoppers via the retailer’s app or loyalty program.

Most important is the unified experience from the customer’s point of view: When he or she returns to the retailer’s site, they should also see updated recommendations and search results based on in-store — or previous online —purchases.

Unified commerce provides the foundation for customers to easily shop whenever and wherever they want, including starting on one channel and finishing through another.

And that is an important step toward frictionless retail.


The practicality of endless aisle when supply chain delays cause in-store stockouts

In retail’s busiest months when supply chains are most strained, stores face stockouts that translate to lost sales and potentially lost customers.

Endless aisle improves a brand’s ability to satisfy customers by offering a more robust product selection.

Online, selections are virtually limitless; endless aisle solutions allow traditional brick-and-mortar retailers to effectively compete and save sales.

Extending in-store inventory

True omnichannel offerings match, complement, and sync customers’ online and mobile experiences with that of an in-store visit.

Endless Aisle can be achieved simply at your store by offering inventory visibility to both customers and associates through mobile touchpoints.

For example: While that Michael Kors bag may not be on the shelf in hot pink, it is an available color offered by the brand.

Using an in-store mobile device, a customer can peruse all the brand’s selections, and an associate can place the order for any desired color—as well as any matching accessories—and have it delivered to the customer’s home.

Though the delivery will still have to pass through the same supply chains, the customer is satisfied in knowing the item has been purchased and is on its way, rather than feeling the frustration of not getting the item upon which they had set their hopes.

Checking stock availability for BOPIS

In addition to extending the in-store experience, Endless Aisle can manage a number of tasks for at-home shoppers as well.

That includes stock visibility for those who want to check whether a product is available before heading in-store to purchase, as well as those who simply want to pick up their online orders at a retail location.

Buying online and picking up in store (“BOPIS”) has significantly increased due to COVID-19: Research firm McKinsey reported in the early stages the global pandemic that BOPIS usage grew 28 percent year over year in February compared with 18 percent in January.

For those shoppers wanting to avoid the ecommerce delivery wait with impacted supply chains, getting visibility into in-store stock availability helps them leave the house with a plan and a high probability of its success.

Saving sales for out-of-stocks

It’s estimated that 10% of online and in-store sales are lost due to items being out of stock.

It’s even possible that, if potential customers are turned away, they may never return, compounding the loss of revenue.

Providing associates with quick and easy one-touch access to inventory of a network of stores or warehouses reduces the likelihood of losing sales, especially when the product is in stock at another store location.

Creating a personal shopper experience

Endless Aisle solutions offer retailers flexibility with inventory: Stores don’t have to stock every single item.

They can showcase best-selling items in their (often very) expensive retail space.

Pricey or very large items can be represented on the retail floor, and a full complement can be viewed in-store within the Endless Aisle on a mobile device, with an associate close at hand to answer any questions.

In that way, salespeople become trusted advisors, instantly accessing detailed product information and stock availability, searching for products in other store locations and within warehouses.

AI-generated style recommendations can help round out a sale with perfect add-on accessories.

Orders are placed directly and can be sent right to the customer’s home or business.

By avoiding lost sales and delighting customers with virtually limitless options, Endless Aisle technology can boost revenue and sales.

An effective Endless Aisle solution blends the best part of online and in-store shopping, helping you outpace the competition.