How good is ‘close enough’ when it comes to in-store inventory?
Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research’s weekly analysis on emerging issues facing retailers, presented here for discussion.
Way back in 2005, Circuit City announced a radical-for-the-time program that guaranteed an order placed online for in-store pickup would be ready in 24 minutes or the customer would receive a $24 gift card.
Needing a portable DVD player with a long road trip coming up, I tried it right away.
What ensued was a comedy of errors. I arrived at the store, waited and eventually showed my time-stamped e-mail confirmation. I will never forget the look on the kid’s face. He knew right away I was getting a gift card. What happened? Circuit City only offered inventory as “available” when four or more were in stock. In this case, two of my DVD players were missing, one was damaged and the fourth was on display. (It was locked down and the associate didn’t have the key.)
I asked if another store had the DVD. It turned out I had literally driven past the store that had nine available! After having to “return” the item in one store, — a painful, lengthy process — I had to purchase it again at the new store.
Fast forward to today. In RSR’s most recent look into retailers’ supply chain execution strategies, we found a lot to be wanting. Retailers are, for the most part, only guessing how much inventory they have in stores at any given point in time. They want to promise as much as possible to consumers, especially if it is online demand for products that stores might need to mark down soon. Store visibility is as weak as ever. Omnichannel promises to customers seem to be wreaking havoc on retailers’ supply chains, sending inventory from stores all over the place with not enough regard for costs or for ensuring that inventory is sent to the right place for future demand.
The good news is that retailers’ strategies are aimed in the right direction — a focus on customers and meeting their expectations in any way possible. Hopefully, they will figure out quickly how to do that in a way that is sustainable long term.
- How Good Is ‘Close Enough’ When It Comes To In-Store Inventory? – RSR Research
- Retail Supply Chain Execution 2016: Dancing In The Dark – RSR Research
DISCUSSION QUESTIONS: Are retailers making too many promises given their abilities to account for and manage inventories? Will they catch up soon?