The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

How Good Is ‘Close Enough’ When It Comes To In-Store Inventory?

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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. Naturally, I tried it right away. My family was planning a road trip from Colorado to Texas, with a 4-year-old and 1-year-old in the back seat – something I was not looking forward to. It seemed like a perfect opportunity to test out the program by looking into a portable DVD player (remember, I said 2005).

What ensued was a comedy of errors, and this part won’t sound so way-back – it will sound exactly like many customer complaints about retailers today. I found the DVD player I wanted, and just to make things totally complicated, I decided I would use American Express points to make the purchase. The player was only available at a store that was inconveniently across town, but hey, I was last-minute shopping on a whim and a trip across town is usually the price you pay for that kind of impulse.

I arrive at the store, show the employee my printed-out email confirmation, time-stamped, and that it is actually more than 30 minutes past the allotted time. I will never forget the look on the kid’s face. He knew right away I was getting a gift card. What happened, I asked him. Well, the company only offers inventory as “available ” when there are 4 or more in stock. But he knew the DVD player I wanted right away – 2 were missing, 1 was damaged, and the fourth was the display item, which was locked down and he didn’t have the key.

I asked if there was any other store I could go to in order to get the DVD. He lit up right away – oh, sure, I can look that up for you. Turned out, I had literally driven past the store that had the player in stock – 9 in total available! I was informed – in order to get to the store where the four in stock turned out to be a lie. I said, thinking about the 30 minutes I had just spent driving all that way, can you call the store to check, and have them hold it for me? Sure thing – except that he had to “return ” my purchase in his store before I could pay for it and pick it up in the other store. And because I had used AMEX points, that return transaction turned out to be lengthy and painful.

Finally, I made it to the store I should’ve gone to in the first place, bought the item how I wanted to buy it originally, and I made $24 in gift cards in the process, all while burning about 2 hours and 50 miles in my car.

Circuit City had decided that 4 in stock was “close enough ” to promise available inventory to a customer – and this was in a store where inventory was tightly controlled. And even so, inventory was not accurate enough to fulfill on a customer promise.

Fast forward to today, and we operate in much the same environment. 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. But in RSR’s most recent look into retailers’ supply chain execution strategies, we found a lot to be wanting. Store visibility is as weak as ever. Omni-channel 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 shipped from stores today is sent to the right place to begin with in the future.

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 figure out quickly how to do that in a way that is actually sustainable long term.

Learn about retailers’ business challenges, opportunities, organizational inhibitors, and technology enablers related to supply chain execution in RSR’s benchmark report, Retail Supply Chain Execution 2016: Dancing In The Dark .


Newsletter Articles January 31, 2017
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