For sale or not for sale: how item statuses truly enable omnichannel strategies

By Steffie Broere

June 17 2021

Following the adoption of RFID technology, retailers can always trust their inventory levels. RFID allowed retailers to step up their inventory accuracy game, resulting in almost a hundred percent confidence levels. Achieving this level of visibility across multiple channels is a prerequisite to accurate omnichannel processes. According to both Forbes and McKinsey & Company, RFID technology has become key for retailers in reimagining store operations.

But for omnichannel effectiveness, such as in-store fulfillment of e-commerce orders, you should know more than which items are physically in a store.

Inventory accuracy is only the first step towards omnichannel

Just because an item is physically located in the store doesn’t necessarily mean it’s available to sell. For example, an item counted during a cycle count might be displayed on a mannequin. However, it could also be faulty or damaged. Or it could be behind the counter, waiting for customers to pick up.

Surely, around 90% of the items in one’s store don’t have anything ‘special’ going on and are ready to be sold. But for a seamless omnichannel shopping experience, you need to consider the other 10% of the items that require more attention. 

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Rigid thresholds

Up until now, retailers had two ways of dealing with this issue of using the store’s inventory for omnichannel purposes:

Although retailers have a much higher inventory accuracy with RFID than without, safety thresholds are still commonly used for e-commerce orders. 

These safety stocks work like a buffer: retailers want to ensure that any item shown through online channels is available. To accomplish this, retailers use thresholds of four, five, or even six items: if the stock level is lower than the threshold, the product won’t be fulfilled from that store.

This threshold issue results from dependence on other systems, like ERP. Therefore, safety thresholds are applied if these systems don’t have accurate stock levels available for the e-commerce platform. For example, imagine only collecting overnight stock levels. In that case, the result of a calculation from last night will not represent the actual stock situation the next day - when a customer wants to buy.

The second approach is to do a manual check. In this case, a store associate checks the sales floor and stockroom to see if the product is available. When available, it gets picked, and the order is accepted. But if it is not, the order gets rerouted to the order management system (OMS), and the store associate wastes time that could have been spent helping customers.

Both approaches could be better.

One more layer is needed for an accurate omnichannel approach, where retailers can access a real-time, unified stock pool. This layer is called item statuses.

Giving context to each item

With the help of item statuses, retailers have a granular level of detail on their stock. In addition to knowing which items are present on the store’s sales floor or in the stock room, an item status gives more context to each item.

For example, a typical status might be ‘On Display’. These items are counted in an RFID inventory count but aren’t suitable for selling online. Possibly, because they are presented on mannequins or in shop windows, making it not worthwhile to use them to fulfill orders.

Another status can be ‘Reserved’, where a store associate reserves an item for a customer. Although the product is still physically there, this particular item shouldn’t be available to sell through the e-commerce channel.

Item statuses help retailers to exclude certain parts of their inventory that have these ‘special statuses’. Having insights into which parts of your inventory are ready or not ready to sell through e-commerce channels increases the reliability of store stock.

Applying rigid thresholds to ensure orders can be fulfilled from the store results in overstocking and lost online sales. So instead, item statuses work the other way around: open up all your inventory except those with a special status.

Item statuses in iD Cloud Store

Assigning a status to an item is a powerful feature in iD Cloud Store. Statuses enrich real-time inventory data with more context, allowing retailers to unlock the full omnichannel potential. iD Cloud Store offers predefined statuses, giving you all the context you need to open up your whole inventory to e-commerce. 

Status management helps retailers decide what is currently for sale so that (digital) product availability can be optimized and sales maximized. Get in touch with us to find out how to apply statuses to your items!

Check out the video below to see how status management works in the iD Cloud Store app:

Steffie Broere - Customer Success Manager
Customer Success Manager
Steffie Broere