Poor inventory visibility is creating struggles for retailers.
Amid ongoing labor shortages and the rise of programs like Buy Online Pick-up In Store (BOPIS), having precise inventory visibility is vital. Inaccurate or limited inventory views result in lost sales and staff wasting time searching for products.
For retailers struggling with poor inventory visibility, this creates a huge drain on profits. According to a study by SML:
- Two fifths of retailers identify inventory as their biggest CX challenge. The same number say that real-time inventory visibility would improve CX
- 33% of retailers say inaccurate inventory is their biggest challenge fulfilling online orders
- Staff members spend an average of 14.6 hours per week on inventory-related tasks, and an average of 10.9 hours per week searching for product
- 21% of retailers say it takes too long to locate missing inventory items
According to Trish Sale, Lead of Product at iQmetrix, the challenges of poor inventory visibility and management are often compounded for wireless retailers. “When you layer in the challenge of low device availability and high cost of inventory in the telecom industry, these challenges are compounded. Retailers can’t afford to overstock on devices that might not sell in a given market, but if you don’t have the device a customer wants, you know they will go down the street to your competitor.”
An added complication: cumbersome processes cause human error.
In the wider retail industry, only 12% of retailers take physical inventory counts on a daily basis. However, the conversations we’ve had with telecom industry experts suggest that daily inventory counting is much more common in the telecom space. What’s makes this practice remarkable is not just the frequency, but the fact that many telecom retailers are still using cumbersome processes that cause human error. These errors in inventory counts then create a host of problems that create extra work and cut into profits, such as:
- Excess inventory on hand, which increases the numbers of write-offs and write-downs retailers have to make, cutting into margins
- Data entry errors, which lead to inaccurate views of product availability
- Picking errors such as choosing the wrong SKU quantities, or simply mistaking one SKU for another
- Unnecessary labor costs created by the need for additional staff to complete time-consuming processes such as manual cycle counts, error correction, and searching for inventory
- Lack of clarity – lack of accurate inventory data makes it nearly impossible to identify trends and hampers businesses’ ability to make data-driven decisions.
Trish Sale, Lead of Product at iQmetrix, provides a valuable perspective on these challenges. “While some level of human error may be a reality that inventory managers have to deal with, our retailers tell us that when they don’t have good, user friendly tools in place these errors can become crippling to their business. They can’t afford to add more stock to stores to compensate for inaccuracies, and the result is that their customers lose faith in their local store to have what they are looking for.”
Fortunately, technology can help alleviate these challenges.
Cumbersome processes create more work and hinder data-driven decisions. However, many of these challenges can be addressed with integrated software solutions.
Stay tuned for Part 2, where we delve into innovative solutions that can address these challenges, streamline operations, and fortify your position in the competitive retail landscape!