How item statuses can truly enable your omnichannel strategy
By Steffie Broere
By Steffie Broere
Following adoption of RFID technology, retailers are able to always trust their inventory levels. RFID allowed retailers to step up their inventory accuracy game, resulting in confidence levels of almost a hundred per cent. Achieving this level of visibility across multiple channels is a prerequisite to true 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, knowing which items are physically present in a store at all times is not enough.
Just because an item is physically located in the store, doesn’t necessarily mean it’s available to be sold, either online or offline. For example, an item that was counted during a cycle count might be on display on a mannequin. 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 take into account the other 10% of the items that require more attention.
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 threshold work like a buffer: retailers want to make absolutely sure 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 is the result of dependence on other systems (like ERP). If these systems don’t have accurate stock levels available for the e-commerce platform, safety threshold are then applied. For example, if a retailer is only collecting overnight stock levels, the result of a calculation from last night will not represent the actual stock situation the next day - at the moment a customer wants to buy.
The second approach is to do a manual check. This means that a store associate checks the store’s salesfloor and stockroom to see if the product is actually 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 wasted time that could have spent on helping customers.
Obviously, both approaches are far from ideal.
For a true omnichannel approach, where retailers have access to a real-time, unified stock pool, there is one more layer needed. This layer is called item statuses.
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. These items 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 item is still physically there, this particular item obviously shouldn’t be available to be sold through the e-commerce channel.
Item statuses help retailers to exclude certain parts of their inventory that have these ‘special statuses’. This means that they can completely rely on their store’s stock, as they would have insights on which parts of your inventory are sellable through the e-commerce channel and which items aren’t.
Applying rigid thresholds to make sure an order can be fulfilled from store, results in overstocking and lost online sales. Instead, item statuses work the other way around: open up all your inventory, except the ones that have a special status.
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 directly for sale (or not) so that (digital) product availability can be optimized and sales maximized. Get in touch with us to find out how you can apply statuses to your items!
Check out the video below to see how status management works in the iD Cloud Store app: