Recognition of the need for understanding inventory levels in a grocer’s supply chain, and especially on-line when an order is being placed, has rapidly become the hot topic-of-the-day. And for good reason…it’s vitally important to retailers’ success in a world where they are relative newcomers – compared to what they know about the physical shelf. For them, it presents completely new dynamics and challenges.
It’s a bit reminiscent of the Y2K phenomenon where experts said the technology world as it was known would end because computer programs, systems and functions would cease to run. While the trends in ecommerce are of opportunity and not eminent demise, they are potentially as important to retailers’ future.
What’s become certain: grocery retailers need real time Perpetual Inventory visibility more than ever before…throughout the store and the supply chain. Many think this is unrealistic, but Itasca retailers know different. With real time Perpetual Inventory, the foundation is set for stellar ecommerce performance.
Frank Urbaniak, Consulting Principal of C-Core Consulting Group who specialize in diagnostics for retailer’s operations, retail roadmaps and selecting and implementing retail technology, notes simply that real time Perpetual Inventory may be a differentiator in gaining a long-term commitment from a shopper. He expresses that, “If the customer does not have confidence in the inventory posted to the website, they will eventually find alternative providers who have better in stock positions and accurate inventories.”
The online marketplace creates potential danger to food retailers as they compete with more seasoned on-line merchants because, as Jamie Tenser argues in our paper, Click. Confirm. Collect., a service standard experienced anywhere is expected everywhere. If a retailer can’t tell a customer whether the items needed to complete tonight’s dinner menu are or aren’t available, the experience becomes ripe for dissatisfaction, as upwards of 25% of items on any one order have the need for substitution – mainly due to out-of-stocks. Itasca retailers have proven that this doesn’t have to be a hard problem to solve.
In an excellent article, Randy Hofbauer, Progressive Grocer Digital/Technology Editor asserts, “One of the most daunting parts of starting and executing an omnichannel strategy, however, is maintaining proper supply, no matter what the channel.” Then there’s this in the same article: “ ‘Real-time inventory visibility at the store level is mandatory for van delivery and click-and-collect’, offers Danny Silverman, SVP of customer success at Boston-based Clavis Insight.”
And finally, to bring the message to retailers as directly as possible Brian Kilcourse and Steve Rowen, Managing Partners at RSR, in their Benchmark Report Supply Chain Execution: New Challenges Demand New Solution, effectively call it the “Elephant in the Room.” Of the 99 retailers they surveyed, 58 (59%) said they needed better inventory visibility and accuracy. Kilcourse and Rowen show that retailers have made progress in this area, but matter-of-factly put it this way, “If you don’t accurately know what your inventory is, where it is, or how you can get it, you are operating on borrowed time.”
Amazon and Whole Foods will take time, but not that much time, to get their act together. Food retailers need to act now. Itasca can help.